Non-profits as Valuable brands

I was meeting Reena after many years. She had been a banker in the Western Hemisphere for a couple of decades. After dinner, she revealed that she too was now in the business of Transformation - Transforming the future of the girl child through education.

I was immediately excited about how the EQUiTOR Foundation could help. But the look of skepticism on her face was telling: "What can a professional Brand Valuation firm to do to help poor girls get a good education?”

This narrow definition of the brands as real assets is unfortunately the norm in India.

But the blame for this blinkered view must rest squarely on the shoulders of people like me. While we spend a lot of time talking about our commercially successful cases, the EQUiTOR Foundation has never exposed people to the transformational role that brands can play in the growth and stability of non-profits.

The twin problems that most non-profits face are common and endemic:

·         Predictable inflows

·         Stable skill base.

And it does not really matter what size they are.

From our experience we can state with complete confidence that no Non-Profit needs to ever be short of funds or skills.

So then why are these problems endemic? This is fundamentally because both resources are dependent on tactical, crisis based approaches e.g. “this initiative needs a large amount of funding” or “how quickly can we find people for that activity". So what donors and volunteers are really buying into is a transactional request for support.

One year into the birth of the EQUiTOR Foundation we discovered a metaphor that helped us clarify the brand perspective for non-profits.

We got all of them to move from a ‘Cover Story’ model to a ‘Subscription model’. So, as a donor (of money or talent), I subscribe to the non-profit's raison d’etre rather than to a single initiative or a crisis.

How did this help? Essentially it moved the funding motivation from short term to long term. Publications that enjoy subscription readership are dramatically de-risked at both ends. Similarly, a donor who fundamentally believes in the entity is a far more dependable patron than someone who funds an activity or a crisis.

Now Brand valuation (or any valuation for that matter) is about managing the risk of future earnings. If a brand (commercial or non-profit) does not have an articulate rationale for existence and therefore why customers are loyal to it, then it cannot know the risk of its forecast earnings.

What drives customer commitment in business is the same as what drives donations (and volunteering) for non-profits. We all buy into a brand before we actually buy the brand!

What do you think?

ROCE : Return On Customer Experience

Last month I was invited to speak at the customer service conference of a well-known MNC bank. What did a left brain valuation type like me have to do with Customer Service? I'm the closest thing to a bean counter that the marketing world can get.

So what in the world does brand valuation and customer service has in common?

Plenty actually. Here's the thing: most companies treat customer service as an expense (to be closely monitored), not an investment for a return. So the two key metrics for customer service management in many companies is the number of service calls that are completed and the cost per call. Fewer calls and shorter calls is better than more and longer calls.

From a cost management perspective both make perfect sense. But here’s the issue: managing it as a cost actually kills businesses but very slowly. Three months ago, India's leading telecom company told me ( a high value customer by Indian ARPU standards) that they could fix the connectivity problem on my phone only if there were enough subscribers on their network in our office!!! No marks for guessing what happens next.

So why should I treat it as an investment?

There are three essential pillars for demand generation: Consideration, repeat purchase and advocacy. There's isn't a fourth. There is enough evidence available now of a direct correlation between advocacy and business risk.( Read the book called Net Promoter Score). A very high percentage of the Apple business is made up of repeat purchase and references from the fervent faithful. And their evangelization.

Both of these metrics have a direct bearing on demand risk and customer acquisition cost (and very often even liquidity). One protects the bottom line and the other enhances it. Outside of "club" industries like energy, and mining, most intrinsically valuable businesses will enjoy very high repeat purchase and advocacy.

Now guess where repeat purchase and advocacy are generated. No marks for guessing. You got it...in the heart of a well-treated customer. Not necessarily always a satisfied one but one with an enduring memory of being treated well. Singapore Airlines has an articulate philosophy on this. "We don't strive for perfect service. We manage our imperfections better than most"

So most valuable businesses are not necessarily the best recognized businesses, but the most reputed ones.

What's the difference? One has very high visibility. The other enjoys very high regard. And regard cannot be bought. You need to earn it. From your customer. It may not be polite to make comparisons here, but I'm certain you don't need my help to think of some good examples of both.

Which one would you put your money into?