Selling a product or service

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If your project involves provision of a product or service, sales are likely to provide your core source of funding in the long run. Ideally, you should plan for your project to be funded from sales alone once you are up and running, and the sooner you can create a sustainable funding model based on sales, the more secure your project will be and the easier it will be to plan future activities.

When planning to sell a product or service, it is useful to consider:

Market position. Positioning your product or service to determine an appropriate price, type of product, level of service and target market is crucial to ensure a sustainable funding model. Determining whether the product or service you are selling is high-end, budget, or somewhere in the middle will help to make sure you don’t set too high or low a price, and appropriately match the budgets and preferences of your customers. It will also be useful to consider the prices and products provided by key competitors, and to carry out some form of market research to better get to know your target market. See the Community-Led Transport Initiatives action pack for more tips on positioning.

Where and how to sell. The practicalities of where and how you sell will affect the accessibility of your product or service, and in turn who your customers are and how many you attract. You need to decide whether you are going to sell directly to your customers or through a partnership with an external funder, provider or retailer. There are also a wide range of payment methods to consider, ranging from cash, cheques, direct debit and standing order, to PayPal and in exchange for time spent volunteering.

In terms of where you sell, you will need to decide if you require your own retail outlet or distribution centre or whether you could arrange to share the premises of another organisation. Alternatively, you may want to sell online, in which case you will need to consider arrangements for delivery or collection. The more options you are able to provide and the more flexible you can be, the more people you will attract to buy your product or service. Having extra incentives, offers and discounts to encourage, for example, bulk purchases or the signing up of new customers, can also help to boost sales.

Advertising. Good use of advertising is key to maximising your sales – if no one knows about your product or service, no one will purchase it!

Case Studies
Country: UK

The Big Lemon started out by charging an annual membership fee for use of their community bus service, and sold a range of different ticket types to their members from a number of different types of outlet. They sold daily and weekly tickets directly on the bus, six-journey passes in university campus shops, and three month and twelve month passes online.  Paying daily on the bus was the most expensive option, and then the more passengers were willing to commit the cheaper the deal became.  The company also took advantage of cross-selling opportunities; for example selling coach tickets to music festivals to the student audience already using the bus services, and private coach hire services to the student clubs and societies. Now, with their new model, the bulk of The Big Lemon’s business is not sold directly to the passenger but instead the company provides bus services on behalf of both the University of Brighton and Brighton & Hove City Council.  This is more secure and enables better planning, as revenues are guaranteed as long as the service is provided as contracted.  The downside is that there is less freedom, but in reality they found it was still possible to run the service in their own style so it was a small price to pay and well worth it. In the case of The Big Lemon’s services for University of Brighton students and staff, funding from the University allows the company to operate the service free at the point of use.  This significantly increases take-up and allows The Big Lemon to better fulfil their aims in terms of reducing the number of car journeys and thereby reducing energy use, pollution and CO2 emissions.

Source: Community-Led Transport Initiatives action pack

Country: UK

Stroudco Food Hub originally set out to market low-cost local food to people on the estate around the local school where the Food Hub is based. They started by trying to gain members through holding stalls at school fairs, and encouraging people to sign up by offering a free bottle of beer and deals for free membership.  Lots of people joined, but no one started ordering anything! Eventually they accepted that the households they were targeting were not going to embrace the idea, and so broadened their marketing to the whole of Stroud. To market the Food Hub, they produced a video, published press releases in local newspapers, ran a leafleting campaign, used social media, and sent emails and texts to members each week. They also secured funding for a marketing development worker to provide support for one day per month, and signed up volunteers who run their own creative design agency. This had a big impact on increasing membership. As part of the broadening of their marketing they decided to reduce the emphasis on affordability and now target Waitrose shoppers with the message that Stroudco is the only Stroud retail outlet for many of the artisan products they offer. 

Country: UK

The Big Lemon initially positioned its community bus service at the budget end of the market, and was very successful at growing market share amongst price-conscious students. However, this was later noticed by the major competitor, who responded by cutting their fares on routes competing with The Big Lemon.  The Big Lemon had to change, and change quickly.  A price-war was out of the question, as the competitors had deeper pockets and would be able to run loss-making services for longer.  After a lot of experimenting and a very difficult year, The Big Lemon stabilised its services with a slightly different model, and revised its positioning.  Now the company runs services on contract to the University of Brighton and to Brighton & Hove City Council, and has positioned itself closer to the middle of the spectrum because that is where the demand is from the funding partners.

Source: Community-Led Transport Initiatives action pack