Over lunch at our recent All Staff Away Day a few of us were discussing whether being recognised as a social enterprise would enhance our marketing or would damage in any way. Whilst we are very proud to be a social enterprise - an ethical-trading, environmentally-conscious, socially impactful business - we are also keen to be successful on merit, which means that clients choose us because we are good at what we do, offer outstanding service and deliver more than expected. That conversation got quite animated, but prompted me to write this post.
Using the not-for-profit label in marketing for a social enterprise can have both advantages and disadvantages, depending on various factors such as the target audience, the nature of the business, and the specific goals of the marketing strategy. Here are some considerations to help you evaluate whether it's a good idea or not:
Advantages
Trust and Credibility: Associating with a not-for-profit label can enhance trust and credibility among consumers who prioritize social impact. Many people perceive not-for-profits as having altruistic motives and a commitment to social good, which can positively influence their perception of the social enterprise.
Appeal to Ethical Consumers: There's a growing segment of consumers who prefer to support businesses that align with their values. Highlighting the not-for-profit status can attract these ethical consumers who prioritize supporting organizations that contribute positively to society.
Access to Grants and Donations: Being recognized as a not-for-profit entity may make the social enterprise eligible for grants, donations, and other forms of financial support from philanthropic organizations, government agencies, and individual donors. Highlighting this status in marketing efforts can attract potential donors and supporters.
Disadvantages
Perceived as Less Professional: Some consumers may associate not-for-profit organizations with amateurism or lack of professionalism, particularly if they're used to dealing with for-profit businesses. This perception could potentially undermine the credibility of the social enterprise in certain markets or among certain demographics.
Limitations on Revenue Generation: Charities can be subject to restrictions on revenue generation and distribution. Highlighting the not-for-profit label in marketing materials could inadvertently communicate limitations on profitability or financial sustainability, which might deter investors or customers looking for financially robust businesses.
Misalignment with Business Goals: If the primary goal of the social enterprise is to generate profits while also making a positive social impact, emphasizing the not-for-profit label may create confusion or misalignment with the organization's core objectives. In such cases, it might be more effective to focus on the social mission and impact rather than the legal structure.
Ultimately, whether using the not-for-profit label in marketing is a good idea depends on the specific circumstances and objectives of each social enterprise. It's essential to carefully consider the potential benefits and drawbacks and tailor the marketing approach to effectively communicate the organization's values, mission, and impact to the target audience.
For us at CAP, we are supremely proud to be a social enterprise, but we are more proud of exceeding client expectations, delivering value for money and generating huge amounts of goodwill each day. Truth be told we don't mind if people choose us because we are a social enterprise......but we do care that they choose us because we are good at what we do.