Home Leadership The Importance of Market Research to Non-Profit

Article Categories

The Importance of Market Research to Non-Profit PDF Print E-mail
Written by Husen   
Monday, 18 February 2008 12:16

Are you involved with a non-profit organization?

Do you enjoy creating new projects?

Are you passionate about new and innovative ideas?

Congratulations, people like you are what keep society advancing and civilization evolving. But chances are you have either witnessed or gotten involved in a project that fell apart within a few weeks or months from starting it. Today I am calling upon you to take a few minutes and figure out why those projects failed and how to avoid losing too much time and resources on other projects in the future.


Why is market research so important? 

You probably already know this, but almost all corporations conduct market research before launching a new project or product line. The question often posed is “why waste so much time and money on such an unproductive activity?”


Market research is mainly just one way of minimizing risk, so it is similar to buying insurance, which also takes a lot of money. It lowers substantially the chances of investing too much in a project only to realize near the end of it that it is doomed to fail. The second function of market research is to help tailor the product to a target consumer or beneficiary by defining the groups needs and wants and thus improving the level of success for a certain product.


These two functions of market research - lowering risk and identifying needs - are just as important for non-profits as it is for corporations. In fact, it is more important to non-profits for two reasons: a) non-profits are normally operating at lower budgets and fewer resources than corporations; therefore cannot afford the failure, and b) non-profits are normally looking to address a true need among a community or group rather than just producing a product and relying on marketing propaganda to make people buy it. So, in short non-profits cannot afford to channel their efforts in the wrong direction, and the best way to avoid a fatal error is to conduct some sort of market research before investing substantial amounts of resources in a new project or idea. You will be surprised at how some basic market research can increase the chances of success for an idea many folds.


You will also be surprised at how many organizations fail because they ignore market research. The argument given by some of these leaders who jump into projects without sufficient research is that they cannot afford the research or it is not worth the time and money that it consumes. In real life, and anyone experienced in the business world can tell you this, these two arguments have absolutely no foundations and all research conducted in the field only corroborates the importance and the high dividends of market research.

What is market research? 

Market research does not necessarily mean to hire a company for $40,000 to conduct telephone surveys, or buy specialized market research and consultancy services. There are much simpler forms that are being ignored and these simpler forms are the most crucial ones. If you ignore market research as a leader of an organization or as a project manager it is your detriment, because usually the costs associated with some basic market research are not comparable to the cost of setting up a whole new project before realizing it would not work.


The costs of market research can be as minimal as a few work-hours and 5 to 20 dollars. That is because the first step you take in market research, whether you are Chrysler or P&G or whether you are the new environmental awareness group in your neighborhood, is secondary research.


Secondary research means retrieving information that is already produced and compiled by others e.g. magazine and newspaper articles, publications of other organizations, statistics conducted by the government, asking subject matter experts and other forms. An alternative name for secondary research is Market Intelligence. So the first stage once you have an idea is gathering intelligence to better understand the context in which the organization is operating and discover what opportunities your organization has.

Practical application 

For example: lets assume that an idea came up during our last meeting for our charitable community club in Charitown. This idea consisted of raising funds through sports. So we can organize a basketball league and all participants would have to pay a certain participation fee, in addition the viewers would also have to pay to attend the games and at the end of the league we will send all the funds to help HIV children in Africa.


The first step would be gathering intelligence, so we would look through the press or on the Internet for information about youth activities in Charitown. Perhaps during this first phase we will figure out that there is already an organization that is organizing something similar and most of the basketball players in the town are playing in their league, or maybe I will discover that in the statistics that the community center published a year ago 90% of the residents of Charitown preferred Soccer to Basketball. Through these different discoveries one can formulate a good idea of whether the idea is executable or not. I can also find information that helps me in other ways. For instance, I might find that my goals overlap with the goals of another charitable organization in my town and decide to form an alliance with them to increase my resources’ pool, or benefit from their know how. These are just some of the dividends of secondary research there is a lot we can learn to improve the chances of success for our organization by just gathering this market intelligence from any source available.


After secondary research, if you still think that the project is feasible, the options for primary research are numerous, and you can choose the research method that best suits your needs. You can now start interviewing people and ask for their input and opinions, or you can distribute a hundred questionnaires which probably will not cost more than five dollars and can give you priceless information about your target market. This research can help me further identify my service and narrow down my options. So going back to the example of the basketball league, by distributing a survey I can get information about how much people are willing to pay to come to a game (knowing it is for charity) and so I can better price my tickets, or I can figure out whether the majority of the residents of the town would be willing to pay for a different type of league and so on.


This whole process of market research for a small organization can take a week or even less, and it could be the secret to turning your small organization into a large one or it could be the competitive advantage that you have to make your project a successful one over other similar ones. If you are involved in non-profits, especially if you are the leader of one, it is crucial to know some basic market research techniques. This way you can ensure better long-term success for your organization and less wasted capacity and resources. One book that I recommend to learn more about market research techniques and how and when to apply them is The Market Research Toolbox by Edward F. McQuarrie. It is worth the time to learn about this topic.

Last Updated ( Thursday, 21 February 2008 15:12 )

Who is the Platform for?