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case studies Martin Lee on 15 Jul 2007 12:02 am

NKF – Marketing Powerhouse Gone Wrong

Anyone who has studied Jay Abraham’s marketing strategies will know about his “Three ways to grow a business” and his “Going outside your industry” theory.

Today, I want to share a case study about an organisation that became very successful by implementing some of Jay’s strategies. Whether it was because the ex-CEO had read some of Jay’s stuff or whether it was because he was himself a marketing genius, I do not know.

The National Kidney Foundation (NKF) , a charitable organization in Singapore, built one of the world’s biggest non-commercial outreach dialysis chain and had the world’s largest per-capita sustained donation programme.

Before things went awfully wrong, the NKF was having an annual turnover of $116 million, all of which came from public donations. This was no small feat for a country with a population base of just about four million people.

Now, the NKF was no ordinary charitable organisation. It had an array of functional groups: copywriters, call centers, multimedia production hubs, mass emailing systems, event management teams and even direct-mailer printing house.

The CEO, TT Durai, mentioned that there were only three ways to get more donations for the organisation:

Get more donors, get them to donate more, or get them to donate regularly.

Sounds straight from Abraham 101 and I couldn’t help but give a slight chuckle. Now for their marketing brilliance.

The NKF were extremely aggressive in their marketing and every communication was tailored to demographics and your psychology. They would either convince, confuse, entice, terrify or haunt you into making a donation.

I remembered the NKF would have yearly charity shows on television highlighting the plights of the poor patients suffering from kidney failure. Celebrities would be roped in to appeal for donations.

If all that didn’t get you, they would further entice you with the chance of winning a house and other fabulous prizes in a lucky draw. The catch is that you will have to donate money to get a chance in the lucky draw. And the more you donate, the higher your chances.

The NKF (or TT Durai) clearly understood the power of headlines. The second-most-watched commercial in Singapore belonged to them. It had a punchline “Remember the last time you helped a child?

The NKF also knew how to move into other markets to capture more donations. Instead of raising funds only for kidney patients, they started campaigns for cancer patients as well to increase their market share of public donations.

Unfortunately, the story had a very sad ending.

Anyone familiar with NKF will know what happened to them. The donations were extravagantly spent and there was a massive lawsuit against the ex-management for the misuse of public funds.

While the NKF is now a mere shadow of it’s former self, it was interesting to see the way they reworked charity as a business model. They were very active marketers in a traditionally passive industry.

4 Responses to “NKF – Marketing Powerhouse Gone Wrong”

  1. on 16 Jul 2007 at 3:04 pm 1.Paul said …

    Martin this was a very interesting case study of using some of Jay’s techniques to a not-for-profit entity although it sounds as if they didn’t quite grasp the strategy of pre-eminence where you are meant to become the protector of your stakeholders.

  2. on 16 Jul 2007 at 4:22 pm 2.Martin Lee said …

    Yes Paul. Thanks for pointing that out.

    The ex-CEO, TT Durai, must have missed out Jay’s chapter on “The Strategy of Pre-Eminence”.

    Or maybe he didn’t read Jay’s materials after all and everything they did just happened to be coincidental to Jay’s teachings.

  3. on 13 Dec 2008 at 1:04 am 3.zig ziegfried said …

    “Get more donors, get them to donate more, or get them to donate regularly.” AND … inspire them to donate them long into the future.(Life time value principle)

    That is shameful. It happens when the law of Fidelity is ignored. “Anyone familiar with NKF will know what happened to them. The donations were extravagantly spent and there was a massive lawsuit against the ex-management for the misuse of public funds.”

    But … the redeeming legacy can be such other similar organizations can borrow from this battel tested, proven model, and migrate it into other comparable causes. Now that would be a classy way to pay tribute to the ‘good’ they actually did perform .. for the time they did it. WHo knows, maybe this time around they’ll get it right and avoid the same mistakes.

    Afterall .. it might be your child or loved one whose life will one day depend on it. Ziggy

  4. on 13 Dec 2008 at 5:05 pm 4.Martin Lee said …

    Indeed.

    But people that have been once bitten, could be twice shy.

    The same modus operandi might not work as well anymore.

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