Marketing Market Segmentation

Ottawa-based charity AceWorks needs to segment its volunteer population and its donor population in order to create a stronger marketing plan. The objectives of this plan are to increase both volunteers and the number of donors. The plan should also encompass winning larger donations from existing donors.

With respect to donors, therefore, there are two target markets in the current donors and the future donors. Current donors are characterized by their existing interest in AceWorks and their belief in what we do. As AceWorks grows, however, we need some of our existing donors to match that growth with their commitment, in order that we continue our good work.

The second segment is future donors. These include corporations, charitable foundations the government and individual donors. Corporate donors donate both cash and goods or services in-kind. These donors have two primary motivations for donating. The first is because charitable donations are part of the organization's mission or philosophy. The second is because there are positive tax consequences to donation. In general, corporate donors like to gain some exposure for their donations. This implies that in order to attract more corporate donors, AceWorks will need to do two things. The first is to solicit more donations, and reach out more to the corporate donor community. The second is to provide greater opportunity for exposure to the corporate community. The more opportunities that corporations have to make their brands visible and associate those brands with AceWorks, the better the return on investment corporations will receive, and the more corporate donors we will have.

The second group consists of charitable foundations. Foundations exist in order to perform charitable good works. Many may have specific missions or focuses for the donations. Foundations often donate in cash, and many have little need for exposure. At times, these foundations will want some publicity, but not to the extent that corporations do, and it depends on the particular foundation. Individual donors are a similar market, in that they donate largely because they want to contribute to charity. They receive tax deductions on their donations, but this is not a major deciding factor in the decision to donate. Individual donations are often relatively small in size to donations from other donors and as such it normally requires a significant infrastructure in place in order to gain donations from a critical mass of individual donors.

The government is the fourth donor group. In Ontario, donations are typically derived from the lottery system, Ontario Lottery and Gaming. Every year, the OLG contributes around $120 million to the Ontario Trillium Foundation, which portions out the donations to a large number of Ontario-based charitable organizations. AceWorks does not currently receive grants from Ontario Trillium, but may be eligible in the future for grants to help finance specific projects. The organization should always be familiar with the grant application process and deadlines, and some of the things that the Foundation is looking for, in order to secure grants in the future if so desired.

Volunteers come to AceWorks from all walks of life, but are generally less segmented than donors are. In general, volunteers can be segmented by psychographic. Students often find that they are either required to volunteer in the community or that volunteer work helps their university or job applications. Many individuals volunteer to help because they know somebody who has been helped by AceWorks in the past, and this gives them a strong connection to their volunteer work. Such volunteers are less transient by their nature. Finally, other volunteers want to volunteer at a charitable organization, and have many from which to choose. They choose AceWorks either because the work appeals to them, or because AceWorks cultivates a great atmosphere, and a strong sense of community and camaraderie. This organizational culture attracts volunteers, and encourages them to continue volunteering with AceWorks.

Thus, we can learn a few things that will help us to improve our volunteerism. The first is that the volunteer experience matters. People volunteer for different reasons, but what keeps them coming back is that they enjoy it. The more things that AceWorks can do to foster such enjoyment, the more volunteers it will have, and the more hours they will dedicate to volunteering. The other lesson is that volunteers will often choose charities that interest them personally. People who love animals will seek out volunteer opportunities involving animals and people...

This is an important distinction -- AceWorks needs to ensure that it has a high degree of visibility among not only the people who wish to volunteer but those who specifically are oriented towards helping others. AceWorks must build a volunteer brand among this segment of the volunteer market, in part because there is often a shortage of volunteers relative to available opportunities, and AceWorks is competing against some very large charities with high visibility.
The focus therefore should be on volunteers who love to work with people. This includes two main groups -- older people who want to volunteer in part because it provides opportunities for human connection, and those who have experience with AceWorks either directly or through a friend or relative. Among donor groups, AceWorks should focus on charitable foundations and corporations, as the relatively large donations of these groups provides a better return on marketing investment than focusing on individual donors, and AceWorks does not have any experience winning Trillium grants from the OLG.

B. It was determined that these markets should be targeted after considering some key issues. With regards to donors, the first key issue is money. Donors with money are better than those without. The second key is the desire to work with AceWorks, and a third key is to find donors who have been undersolicited. Major corporations and foundations are solicited by just about every charity, and as a result may allocate their annual endowments quickly. The key to success for AceWorks is to find the companies and charities -- perhaps smaller or medium-sized of each -- that are not marketed to as much as the highly visible ones. These might have more discretionary funds available for charities that they are not currently working with. Lastly, all potential donors must be screened for potential ethical red flags that might damage the reputation of AceWorks.

For volunteers, there are a few selection criteria that play a role in the decision that was made. The psychographic profile was the first one. We want to target volunteers that are going to get a lot out of their experience with AceWorks. The reason for this is simple. The process of finding new volunteers can be time-consuming, and we want to make sure that when people arrive they will do two things. The first thing we want them to do is to stick around. We cannot offer much in the way of extrinsic motivation, so we must deliver a high level of intrinsic motivation in order to retain volunteers. As such, the volunteers we want to find are the ones who will find the work very satisfying on a personal level. The second thing we want our volunteers to do is to contribute to a positive organizational culture that delivers very high levels of satisfaction to the other volunteers, the organization's staff and to the clients as well. Since one of our biggest target groups is from those with past experience dealing with AceWorks, we want to ensure that our volunteers are so positive to work with, the people will want to contribute to the organization even after their association as client or family of a client ends.

In targeting retirees, we are reflecting two realities. The first is strictly demographic. Baby boomers are entering their retirement years. As they leave their careers behind, they will have ample time and energy to become involved in the community. Many will wish to replace the social connections that they had from their work, something that volunteer work offers. They may also seek to give back to the community and make contributions that they perhaps were unable to make during their working years. Additionally, the newly-retired volunteers bring something that younger volunteers do not -- real work job skills and experience. With a large group of potential volunteers emerging that is not only going to want to find outlets for their energy, but has skills that we need, those are all criteria that went into the choosing the newly retired as a target market for volunteering at AceWorks.

C. AceWorks faces intense competition for both money and volunteers, often from very large and well-established charities. These major charities swallow up the bulk of charitable donations and volunteers. They have well-established brands and strong marketing infrastructure that helps them to attract these assets, to the detriment of smaller charities. Therefore, it is important the AceWorks gets its message out to the target markets above the noise of our competitors. Thus, we need to tailor our appeal along two different dimensions. The first is that we…