July/Aug 2005

From Online Shopping to Online Relationships: Using Ecommerce to Raise Money and Build Stronger Constituent Relationships

by Vinay Bhagat, Founder and Chief Strategy Officer, Convio

Several nonprofit groups already run online stores using stand-alone ecommerce tools and services. Many health organizations, for example, sell educational materials. Public broadcasting stations often sell premiums, such as videos and T-shirts, outside of pledge drives. Religious organizations frequently sell books and tapes.

Many nonprofit professionals, however, still have not evaluated ecommerce as an option for fundraising, believing that it is exclusive to for-profit retailers. They should. Ecommerce offers exciting new possibilities for raising funds and building strong online relationships with constituents.

Why Should Nonprofits Sell Goods and Services?

People frequently are more willing to buy a product or service before they make a donation. So, an online store can be a great way to initiate or develop a relationship with a prospect. Offering merchandise online also can be a way to garner more revenue from current donors and prospects.

A tip: Product and service merchandising should be consistent with an organization's mission. In other words, the items an organization sells should reflect what the organization does. Groups that use premiums for fundraising also can use ecommerce to garner more revenue by selling leftover premiums.

Beyond Merchandising: Ecommerce-based Fundraising

A successful new trend in ephilanthropy is "ecommerce-based fundraising." Groups like Defenders of Wildlife and the Jewish National Fund (JNF) have achieved tremendous success by selling virtual fundraising "products."

Defenders of Wildlife offers constituents the ability to "adopt" wild animals such as wolves. JNF gives people the opportunity to buy trees to be planted in Israel in return for a certificate. Historically, the organization sent donors or the recipients of gift donations physical certificates. Now, JNF offers virtual certificate fulfillment in the form of a PDF — a great facility for last-minute gift givers/purchasers. JNF has even taken the ecommerce-led fundraising approach a step further by allowing people to pre-purchase multiple tree certificates for a discount and to bank them for future distribution as gifts.

Ecommerce Best Practice: Cross-promotion

Last year, I opted to buy Valentine's Day roses for my wife online. I intended to buy a simple bouquet of a dozen roses. During the purchase process, the site promoted the option to "upgrade" and buy two dozen roses for just a little more. I selected that option. As I proceeded, I was presented the option to add an attractive vase and chocolates for a little more. Again, I selected the option. The site up-sold and cross-promoted to me very effectively.

The same marketing principles can be applied in a nonprofit context. If someone is purchasing an item from an organization's online store, the store can offer him or her the option to purchase related items. Furthermore, it can offer the option to make an additional gift contribution to the organization.

Consider this example: A museum could configure its online store to ask a constituent who is buying a $15 individual membership if he or she would like to upgrade to a "family" membership for just $10 more. Or, the store could ask constituents to donate or purchase more to receive an additional benefit. For example, "Your current total is $75. If you spend just $25 more, you will receive a free ticket to our upcoming exhibit."

Ecommerce Best Practice: Building Constituent Profiles

Ecommerce can be a great way to start a relationship with a new constituent. It is a low-involvement way for site visitors to interact with an organization. Once a site visitor has made a purchase, an organization can grow the relationship by converting shoppers to volunteers, advocates and/or donors through cross-promotion tactics and other programs.

Organizations can use online stores to identify new constituents, and
then create deeper relationships with them over time.

To maximize constituent development, organizations should ensure that their ecommerce solutions are integrated into their overall online constituent relationship management technology and strategy. For example, store purchase information should be added to a constituent's profile in an online marketing database. Upon checkout, new constituents should be encouraged to opt in to ongoing email communication. Additional information from new constituents about their interests and preferences also should be collected as they check out.

As organizations collect constituent information through their online stores, they will be poised to drive more involvement. For example, a wildlife preservation organization could use constituent profile information to send an email to constituents that have an interest in wolves — which may include people who have purchased "save the wolves" T-shirts — encouraging them to donate to a "save the wolves" fund. The organization also could display special wolf-related messages to those constituents when they are logged in to the organization's Web site.

Conclusion

Through ecommerce, nonprofit organizations can raise new funds as well as reach new constituents, encourage them to get more involved, collect information about them, use that information to communicate messages relevant to them, and build relationships with them to encourage loyalty and ongoing support.

For more tips and insights on ecommerce for nonprofits, download the free guide, From Online Stores to Online Relationships.

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