I just came across this study conducted by the IBM Institute for Business Value of customer "Advocates" in the retail setting.

For this consumer study, "Advocates" were defined as meeting three criteria:

  • they recommend their retailer to their friends and family;
  • they would increase their purchase amount if their retailer offered products found at other stores; and,
  • they would stay with their retailer even if another retailer offered a competitive product.

Now, wouldn’t we all like donors who met those critieria?!

As you would expect, customers who are Advocates (as opposed to Apathetics or Antagonists) are far and away the most valuable in profitability terms.

In the retail setting, the factors that induce customers to become Advocates are, in order of importance:

  • Store experience — the critical tangibles and intangibles that make it pleasant, enjoyable and easy to shop, triggering a variety of positive emotions along the way (this factor is by far the most important, and is also the strongest determinant of customer Antagonists!)
  • Convenience
  • Assortment
  • Quality
  • Customer service (personally, I’m surprised this didn’t rank higher)
  • Multichannel
  • Product availability

Importantly, the study notes that simply "meeting expectations" (e.g., with respect to attractive pricing) does not guarantee Advocates; it is the price of entry. 78% of all customers say their primary retailer meets their expectations, but across all retailers studied, the average percentage of customer Advocates was by comparison only 21% … and the highest was Wegmans at 53%. Other leaders by segment were Nordstrom (large-format apparel, 28%), Costco pharmacies (pharmacies, 27%), Barnesandnoble.com (online retailers, 27%), and The Children’s Place (mall-based specialty, 22%).

Can we apply the "Store Experience" concept to nonprofits and their donors?

Certainly it should apply pretty readily to "bricks & mortar" nonprofits — museums, theaters, hospitals, schools and others with a physical embodiment that donors can experience (or, in many cases, such as service agencies, observe).

It gets a lot harder for nonprofits dealing in intangibles, like policy advocacy, or remote impacts, like international disaster relief or medical research. In those cases, progress and results can be reported … and maybe even visually depicted. But the donor has little "experience" of the organization itself other than in the sense of customer experience (do they thank me for my contribution, correct my address, take me off their telemarketing list?).

This is one of the reasons I’m such a fan of online video. This medium does at least permit the donor to virtually "experience" their nonprofit’s leaders and "see" programs in action. And certainly a nonprofit’s website creates a virtual world that can communicate a personality or ambiance, and be more welcoming and enjoyable to use (or not).

Any other ideas out there as to how a nonprofit can enhance its "Store Experience?"

Tom

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