School fundraising is a $40 million a year business for Yankee Candle, and they have a tried and true formula for why it works out so well. Hint: It ultimately has to do with packaging, brand recognition and customer service.
“Service, pricing and product is incredibly important,” says John O’Neil, director of Yankee Candle Fundraising, which is an affiliate company of Yankee Candle. “We offer the world’s finest products within the pages of our catalogue and we do it at a price fair to the parents and supporters of the group. And, we do it at a pace of service unparalleled in the industry.”
It sounds like common sense when you hear it, and it’s backed by research. A study conducted globally by Ipsos found that consumers really do care about brand recognition. And when you pair brand awareness with fundraising, it illustrates some of the reasons why consumers are more likely to want to purchase from companies that come recommended from family and friends. Some 70% of Americans believe brand trust is becoming “more important.” And, in fact, 57% of Americans will “only trust” recommendations from people they know. This type of personal recommendation – plus the lure of a cute little niece or nephew selling something for their preschool or band – is why Yankee Candle is a leader in that space right.
“Our behavioral research shows shopping decisions are a mix of rational and emotional, what we now talk about as System 1 and System 2,” explains Alison Chaltas, the Global President of Path to Purchase at Ipsos. “School fundraisers figured this out decades before behavioral science become hot. Rationally we want to support our schools, but then you add in great gifts from a wonderful brand, and you have the ease of picking them out at home or work. Implicitly the kids are so cute and perhaps we feel a bit guilty if we don’t help them succeed.”
The big business of fundraising
School and organization fundraising is big business. From PTAs and PTOs to materials for pre-kindergarten programs to band camp and dance outfits, lots of groups are trying to find ways to supplement their funding. And then there are the groups raising money for cancer awareness or various other disease research.
Parent groups are always on the lookout for more ways to fundraise. The National PTO website says that groups that look toward catalog sales such as those offered by Yankee Candle tend to prefer expertise provided by a professional fundraising company that can “fill in the gap for groups with low volunteerism.” Also, the group reports that such “product sales work well when a group needs a lot of money in a short span of time.”
But not everyone agrees with that. Liz Livingston Howard is the director of the Nonprofit Executive Education at the Kellogg School of Management. According to Howard, direct sponsorship has the lowest overhead. However, she says, “Product sales provide the nonprofit an opportunity to engage larger numbers of solicitors than they might if the solicitor had to ask for money directly. Often volunteers find it easier to sell a product than to ask for a monetary gift.”
Also, rather than promoting a door-to-door approach, giving kids the options (or giving parents the option) to send email links or an invite to a private app also ups the ante. Recent ecommerce updates also make things move much faster for collections and distribution of both profits and product.
“Rather than have a once a month bake sale they’ll run a two-week candle fundraiser and earn as much as they might’ve made the whole year,” says O’Neil, who swears he knows of groups that have done just that.
Kellogg professor Howard adds a level to that analysis. “Organizations will pick products that fit the effectiveness and capacity of their sellers,” she says. “So, in elementary schools, the ‘sales people’ often end up being parents who may be looking for something more ‘general’ than ‘direct.’ A book fair is a more general fundraiser in that parents work the fair but don’t actually sell directly. Meanwhile, World’s Finest Chocolate requires more direct selling which is something that high school students can take a more active part in.”
For Ipsos marketing vice president and fundraising parent Ashley Ericksen, the process and product work well–especially scratch and sniff elements of the catalogue plus the app and store links that are easily shared on Facebook and Twitter.
“Many people are familiar with the brand from the Yankee stores or their presence in other brick and mortar retailers,” says Ericksen. “Plus, Yankee is known for its product quality and large variety of scents. On the one hand the brand familiarity makes this a lower risk purchase for those participating in the fundraiser–it’s a known entity. And, speaking as a parent and not just a market researcher, the app component really helps to modernize and simplify the fundraising component. The ability for anyone to access the app means potential purchasers can browse and shop on their own time and perhaps make more thoughtful purchases.”
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