I have not yet dealt specifically with the not-for-profit organizations (NFPOs), an important institutional segment, whose objective is not the creation of economic wealth but the pursuit of activities that will positively affect society at-large. The immediate problem we face when attempting to develop a cohesive strategy for NFPOs is their enormous diversity.
The term not-for-profit seems to encompass a wide array of totally different institutions that only share the negative attribute that making money does not motivate them. Is it possible to conduct a coherent analysis of these institutions? I believe so. Moreover, I feel that the Delta Model can give us penetrating insights into how to manage them, based on conclusions that are quite different from the for-profit business sector.
Who Is the Customer?
Sometimes the word “customer” antagonizes those who are involved in not-for-profit environments. It sounds mercantile and somehow demeaning to the noble purposes of some organizations. This is simply an issue of semantics. It should be clear by now that by “customer” we mean one who occupies the center of attention of the organization, whom it is our duty to serve as effectively as possible.
The customer here is not necessarily the one who pays the bill, but the one who receives the output that the organization generates. Maybe a better word would be “stakeholder” or “constituent” to designate that person in a not-for-profit setting. Depending on the nature of the organization this stakeholder takes many different names: Teachers think of students, churches think of parishioners, sporting clubs think of fans, symphony orchestras think of audiences, armies think of soldiers, and so on.
The concepts of “customer” should also be amplified to include not just the recipients of the final offerings of the organization, but also those who contribute to their funding. NFPOs often depend on the generosity or support of external parties, who somehow seem aligned with the purpose of the organization and are willing to contribute either financial or personal resources for its advancement. These donors can either be private individuals, other institutions, or government agencies.
Once we define the nature of the relevant customers of an NFPO, we believe that, without much adaptation, we can apply the concepts and tools the Delta Model provides to us to segment the customer base and define creative customer value propositions.
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