Building Market Share in the Nonprofit Sector

At The Fedcap Group, we are driven by mission.  We are driven by expanding impact.  We are driven by creating solutions.   One way of evaluating our success is by analyzing our growth in market share.  We define market share as revenue, customers served and geography where we successfully compete within a specific area of service i.e. helping those on welfare go to work, helping veterans transition to civilian life, helping youth in foster care go to college and graduate.

There is evidence that demonstrates that investor/donor Return on Investment (ROI) increases steadily as market share rises.  This is due in part to economies of scale, rapid and efficient start-ups, and leveraging existing knowledge and technology.  The financial advantages of a strong market position make it understandable that a common strategic goal, even in the nonprofit sector, is to increase market share.

One of our most effective strategies to date for increasing market share, is to strategically and intentionally integrate our program designtechnology, pricing, and performance management structure.   When contemplating a response to a government or private sector Requests for Proposal (RFP), the program design is contemplated through the lens of technological efficiencies—thinking through how leveraging technology can impact efficiency and thus enhance our ability to bid competitively.  This requires that we stay on top of technological advancements that could be used to improve overall program performance.  For example, we have built an app called “Up the Ladder” that pushes out information about career fairs, job clubs, and community professional development courses to individuals whom we helped to employ.

This is equally true for performance management.   Because technology provides us with daily Key Performance Indicator (KPI) report cards and “red flag” reports that result in rapid performance correction—we are willing to venture into the growing milestones- based contracting environment.  Additionally, we are keenly aware of our competitors’ outcomes—assessing our own performance against those who provide similar services.  This keeps us sharp and focused on improving our approach to service design and delivery.  A recent article by the Banda Marketing Group cited that that among business units achieving substantial market share gains (5% or better annual increases), over two-thirds  reported improvements in product quality.

We also pursue product innovation.  Things change.  And to do what we have always done in the same way we have always done it, is a dangerous path—for any business— including social services.  Expecting product innovation challenges leadership and line level staff to think critically and to ask frequently what else is needed to improve performance.  This expectation also promotes aggressively pursuing monies to fund the testing of program innovations.  For example, one area we continue to explore is our effectiveness in responding to the changing demographics of our country.  We consistently examining if our product design is tailored to fully engage the racial and ethnic diversity of those we serve, and then we test new outreach and engagement strategies.  Demonstrating our own investment in developing and introducing new products into the marketplace is one of our most important approaches to building market share.

Finally, we understand that in order to increase market share, reputation matters.   While we don’t “sell” our products in the same way that a for profit business might—we do “sell” our reputation.  Across our agency, we talk a lot about reputational risk, which is a threat to our good name or standing.  Reputational risk can occur through a variety of ways: directly as the result of the actions of the company itself; indirectly due to the actions of an employee or employees; or tangentially through other parties such as our suppliers.  By actively attending to our reputation, and rapidly addressing issues as they arise, we are seeking to mitigate issues that could impact market share.

I welcome your thoughts—how do you approach the increase in market share?