Knowing Your Market

Market awareness is a critical component of sound nonprofit strategy, helping organizations answer questions like: What is our competitive advantage? or What is the need for our new organization, partnership, product, or service?

Strategic planning and business planning both rely on market data to inform decision making.

Strategic Planning and Competitive Advantage

In a strategic planning context, organizations must know enough about their market to identify their competitive advantage: the unique strength that sets them apart from others providing similar services or programs. Good strategy builds on an organization’s competitive advantage, so it is important to know what you do well, so that you can do more of it.

Gathering objective data about your top competitors in a systematic way can help you analyze the differences between those organizations and your own and hone in on your competitive advantage. One common way of performing this type of competitor analysis is to create a simple matrix:


Our Nonprofit

What makes your organization strong in this area?

Competitor A

What makes this competitior strong in this area?

Competitor B

What makes this competitior strong in this area?





Human Resources








Sources of Revenue












Mission Impact








Use the best available sources to fill in what you know, guarding against the tendency to rely on hearsay or opinion. Some good sources of information on competitors include:

  • Competitors’ web sites (look for service descriptions, annual reports, press releases, lists of funders, etc.)
  • Websites providing information on nonprofits, such as GuideStar or Charity Navigator (look for date founded, 990s, etc.)
  • Media mentions in general news and/or trade journal articles (look for interviews, program announcements, case studies, awards received, presentations and events, etc.)

After filling out the matrix, consider how your organization compares and look for where your organization excels. This should give you a good idea of where your competitive advantage lies.

(This exercise can also be useful when seeking to identify potential partners, as it can help you discover complementary strengths that might be leveraged through collaborative strategies.)

Business Planning and Defining Need

In business planning, determining the need for a new or expanded program, new venture, or growth strategy is an important and necessary step. After all, there is no sense in starting or expanding a program or service that serves a nonexistent or shrinking need!

In business planning, determining the need for a new or expanded program, new venture, or growth strategy is an important and necessary step. After all, there is no sense in starting or expanding a program or service that serves a nonexistent or shrinking need!

What need will your product/service meet?

How do you know the need exists?

Is that need growing, shrinking, or staying the same?

What trends in the environment might impact the need?

Is each trend likely to continue, accelerate, decelerate, or reverse? Over what time span and to what degree?

How would you define your target audience or client/customer/audience base for the service? Whose needs are you meeting?

How large is the potential audience or client/customer/audience base?

Is the size of the target audience or client/customer/audience base growing, shrinking, or staying the same?

Is that likely to continue, or change? Over what timeframe and to what degree?

Start with what you already know (you probably already have some data suggesting your effort would be worthwhile), but don’t stop there. Look to trade publications, existing research, reports, and other “secondary research” that may already be easily available to get a clearer picture of your target population and their needs. Then, take your research further by turning to primary sources. Consider interviewing experts in the field to learn about emerging trends and promising practices, or using targeted focus groups and/or surveys to assess client/customer needs and preferences. In each case, be clear about the questions you want answered and be respectful of informants’ time. Often, they will be happy to share their observations with you. In some cases, consultants can play a valuable role in conducting research as a neutral third party.

Business Planning and the Competitive Landscape

Like strategic planning, business planning asks you to analyze your competitive landscape. You will need resources to implement whatever it is you are planning, so you need to be able to make a case for why those resources should be directed to your organization, and not to one of the many others who may be working in the same (or a similar) space.

Below are some questions to help you assess the competitive landscape for your venture:

How else might your clients/customers/audiences get their needs met, if not by your organization?

Which would you consider to be your top 3–5 competitors?

Where is each of the identified competitors strong? How do they compare with yours?

What is your competitive advantage? Why is what you do compelling, even in a crowded competitive landscape?

How will you maintain this competitive advantage? Can it be duplicated by others? How would you respond?

How would you summarize your value proposition – the benefit that you will deliver and that the client/customer/audience will experience?

If your organization has an established track record, you may already have data demonstrating your relative strength and ability to deliver on your proposed program or venture, whereas if you are creating an entirely new organization, you can only project what will make you successful. In either case, it is equally important that you demonstrate your understanding of what others are doing in your service area and why your approach is better given client needs, preferences, and behaviors. Although any of the research sources mentioned above – from secondary research to interviews, focus groups, and surveys – could inform this type of assessment, you may find that secondary sources work best, as some informants may be uncomfortable talking with you directly about competitors. Here, a consultant or other third party researcher may be better able to elicit candid responses.

When Enough is Enough

Each organization, and each planning process, will have its own unique threshold for how much data is needed to inform decision making. Even so, knowing when you have enough information to make a decision and move from strategy to action is key. A planning committee member who asks for ever more detailed research may be masking their dissatisfaction with the process or lack of confidence in the proposed strategy or venture. It is important to try to distinguish when more data is necessary and when it is indicative of another issue that needs to be addressed. Finally, it is important to recognize that however important it is to make well-informed decisions, no amount of data can prepare your organization for every possible contingency in a rapidly-changing environment. However, applying your research experience to gathering and making sense of information on an ongoing basis can help you change and adapt to shifting conditions over time.