Odd Similarity: B2B and Nonprofit Marketing

I was reading a blog post about nonprofit marketing and was stricken by the similarity between the situation of nonprofit marketers to their counterparts in the commercial sector, particularly in business-to-business marketing.

The author's point was that the chief difference between consumer and nonprofit marketing is that in consumer marketing, the customer is purchasing something for his own benefit, whereas in nonprofit marketing, the donor is purchasing something for the benefit of someone else. In the case of nonprofit, the necessity of cost-versus-benefit and quality of service remain important to the donor who expects his contribution to accomplish something significant.

Granted, this is not evident on the level of the low-end of donors: the millions of people who will give in small amounts to charities really don't invest much time in considering how their donation of $20 or $200 is going to be spent, unless the charity itself is notorious for being wasteful or corrupt in its use of donated monies, which is why charities who depend on small donors and have few significant ones are (rightly) viewed with some suspicion. The situation is much the same for low-ticket purchases: where the amount of cash is small, the consumer doesn't do much research and isn't particularly disappointed when their experience of using the product is less than ideal, and the small-ticket vendor is not often very scrupulous (unless he counts on many repeat purchases over a long period of time, adding up to a significant per-customer income).

On the level of high-dollar patronage, where wealthy individuals or corporate sponsors contribute six figures or more to a charity, much more discernment is given to how the charity will use the money, with an eye toward ensuring it is used well, and that the beneficiaries of the charity actually receive some benefit from the use of their donations.

In terms of brand, a nonprofit organization that seeks to obtain large contributions must be able to demonstrate that it delivers value for dollar, and must maintain a spotless reputation for being fiscally responsible and effective in accomplishing their stated ends.

My sense is that the same is true of B2B marketing - even though it is pay-for-product, the person who makes the buying decision and approves the money to be spent is not the user of the product, but ideally decides to make the purchase based on how well the product will suit the needs of their users.

Considered in that way, the mind-set of the buyer in a business is similar to that of the donor to a charity - for better or for worse. The corporate buyer is inclined to seek the cheapest alternative that is "good enough" rather than purchasing a product that will actually deliver the full functionality others seeking to obtain - and ultimately, the need of the employee for an effective solution is done in order to deliver a benefit to the company or the customers they serve.

That said, the B2B customer does shoulder some of the blame when they are indifferent to the quality of product or service that is delivered by a vendor. It's the undiscerning customer that feeds firms that should rightly have no customers at all.

And in B2B marketing, as in charity, there are vendors who will happily serve both classes: some offer cheap solutions for the "good enough" buyer, and others offer effective solutions for the "must be good" buyer. And the lower the price of the good, the less they care about whether it actually accomplishes its desired goals.