Nonprofit Market Segments
Photo by Tyler Lagalo
How do you understand and/or see your market segments?
Your market segments represents the different people groups, neighborhoods, communities, and organizations which make up the particular audience with which you hope to serve, partner, and co-create. Every community reflects a unique context where people groups gather for social, economic, professional, and personal reasons.
Each market segment is nuanced by our human interaction, while our assumptions are drawn from the many biases and lenses through which we view the world. Though there may be general reasons people are found together in certain areas (e.g., political preference, ethnicity), there also may be varying degrees that are not clearly perceived.
In order to better understand common ground, behaviors, priorities, and other attributes, we must first understand the many cultures and subcultures that make up our communities. Reviewing basic demographics will shape perception, requiring you to unpack assumptions. When we put people in compartments, we can make the mistake of sweeping assumptions (e.g., millennials are self-absorbed and entitled, Gen-Xers are the slacker generation, or Baby Boomers are the real problem). Surface assumptions and implicit bias can sabotage your strategies. This is why we have to uncover our assumptions and engage our target audience through deep listening. Relationships are key.
When you begin to identify the market you might serve there are a number of ways to categorize these segments. This is particularly important when you begin to work through your business model and how market segments intersect and support the mission of your organization. Steve Zimmerman offers a more holistic view of the nonprofit market and how different segments relate to the organization. Zimmerman uses the image of a “market wheel” to describe the intersection points nonprofits must consider. He describes the five components* of the “market wheel” segments as follows:
Direct Beneficiaries (those who use the organization’s products or services)
Other Beneficiaries/Funders (wider groups who benefit from the organization’s efforts, values, ideals, etc.)
Other Organizations (both for-profit and nonprofit partners who might share the target audiences)
Input/Labor Market (representing the human capital of staff, volunteers, board members, etc.)
Political/Social Environment (the environment that influences the organization’s ability to achieve its mission)
The components Zimmerman highlights will certainly shape your business model. He reminds us that the single most important driving component influencing strategies the most is that of your direct beneficiaries. The people who benefit from the products/services your organization can provide the best information you will collect. This allows you and your leaders to shape strategy and measure impact more effectively. Again, deep listening is key. It’s why community organizing strategies can be valuable to understanding your market segments.
Gathering people together, empowering their gifts, and mobilizing them at the grassroots level to act together are the basic tenants of community organizing. The initial interaction and learning within our market segments actually begins by developing relationships that matter. Our interaction with identified target audiences is the bedrock for building a business model that actually makes a difference and changes circumstances in our communities. What we learn, the relationships we establish, and the actions that develop, point toward what can be — a vision.
* Steve Zimmerman, “Community Influences: Understanding Nonprofit Markets,” Nonprofit Quarterly, https://nonprofitquarterly.org/community-influences-understanding-nonprofit-markets/ (accessed December 29, 2020).