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The Top Seven Macro Trends Impacting Cultural Organizations

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The Three Most Overlooked Marketing Realities For Cultural Organizations

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Are Mobile Apps Worth It For Cultural Organizations? (DATA)

The short answer: No. Mobile applications have been a hot topic for a long while within the visitor-serving industry. Read more

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Community Engagement

Six Urgent Reasons To Add Millennials To Your Nonprofit Board of Directors

Millennial board members

If your organization doesn’t have at least one millennial on its Board of Directors, then you may be setting your organization up for a difficult future. 

I cannot help but notice that the Boards of Directors of many large nonprofits are missing representatives from a critical current constituency – millennials. Strangely, this seems to especially be the case within large nonprofits (annual operating budgets >$30 million, or attendance >1 million for visitor-serving organizations)… And that’s particularly terrifying, as many smaller organizations often look to larger ones for cues to the future.

Missing millennial representatives on the board doesn’t necessarily mean that there aren’t loads of important conversations taking place about how to better engage millennials. It seems that many organizations are stuck in the mud of dialogue instead of finding traction in actually doing something constructive to meet this opportunity where it counts most. I’ve found that it’s not uncommon at many board meetings for there to be numerous Baby Boomers – and a few members of Generation X – waxing poetic about the urgent need to “engage millennials”…without any input from actual millennials.

The fact remains: The millennials aren’t coming.  They’re here now.  The time has come for organizations to sink or swim based on how effectively they engage millennials…which may be particularly hard to do when nobody tasked to govern leading organizations is actually a member of this generation. 

To be fair, there are some organizations that are moving forward and integrating millennials into their boards and strategic decision-making processes. I’m a millennial serving on the Board of Directors at the National Aquarium during an incredibly important time for the organization’s future. I’m grateful for this opportunity…but I also know that I’m one of relatively few millennials on the board of a larger nonprofit or a museum.

Don’t have at least one millennial on your Board of Directors yet? Here are six, critical reasons to call up the nominating committee and work on getting some impressive millennials aboard your nonprofit Board right now.

 

1) Millennials represent the largest generation in human history

…So not having at least one of them on your board may be a bit out of touch. Until Generation Y came along, baby boomers represented the largest generational cohort in the United States. However, at nearly 90 million strong, millennials have baby boomers outnumbered by an estimated 20 million people. As boomers age, the divide will continue to grow. This statistic alone should be more than enough to make executive leaders pause to consider the future of their organizations. Moreover, millennials will begin to tip the scales in buying power in the United States next year, and our economy will be feeling the impact by 2017.

 

2) Millennials will have primary influence on culture and society for an unprecedented duration

…So not having one on your board is delaying an inevitable future and holding back progress. I’ve written about this fact more directly before, but here’s a reminder: Millennials who have children are not having as many of them as their baby boomer parents. Moreover, Gen X (which is only roughly half the size of Gen Y) is simply too small in number to give birth to a future, large generation. Simply put, America’s birth-over-death rate is not increasing at the historic rates established by Baby Boomers. This means that millennials will remain the largest generational demographic in the United States for a much longer period of time than did the Baby Boomers – or any prior generation to date.

 

3) Millennials will significantly influence the outcomes of the next six presidential elections

…And if your organization does not get millennials involved in understanding policy-related challenges and opportunities from a leadership buy-in standpoint, you may be “voting” against your own best interests. Indeed, this depends upon millennials actually voting, but building any aspect of your organization’s survival strategy upon 90 million people not turning up for elections is a stupid strategy. Moreover, millennials will eventually dominate a very, very vast majority of all government leadership positions…mandatory government retirement policies dictate this math. Inviting millennials onto your board helps ensure that your organization’s best interests are best protected.

 

4) Engaging millennials requires immediate, strategic shifts in leadership mentalities

…Far beyond simply “using social media.” Engaging millennials isn’t merely a communication medium opportunity (especially because data suggests that millennials are not even close to the only audiences using social media). Engaging millennials requires new ways of thinking about marketing, development, human resources and operations, and even new strategic practices regarding things like membership. Millennial board members may provide valuable perspective regarding their own peer group and generational mindset.

 

5) What your organization actually DOES is more important than ever before

…And aiming to be seen as an organization welcoming millennials without actually welcoming millennials where it counts may actually be detrimental to your bottom lines. We live in a world now where everybody (not just millennials) increasingly look to real-time platforms to make decisions. People want to assess an organization’s promise, reliability, trustworthiness, and impact on their own – guided largely by perceived transparency. If your organization is actively trying to engage millennials, then it’s doing something smart (for the reasons mentioned above), but if it’s doing it without also empowering millennials where it counts (in the Board Room and the future of your social mission), then the story is incongruent. Thanks in large part to the web, we live in a “show vs. tell” world – and if what you say doesn’t match what you do, people are likely to notice.

 

6) Millennial board members can help connect your organization directly to millennial donors

…Because millennial board members can be every bit as valuable as other board members. Despite a strange want to promulgate the concept that millennials never do and never will actively contribute to nonprofit organizations, data suggests that most millennials actually do contribute. Yes, millennials donors exist and your organization is probably messing a lot of things up trying to engage with them even if you think you’re doing it right. (Here are six sad truths that I have learned as a millennial donor.) But the good things about adding other, more diverse members to your board are still true for millennials: insight, connectivity to the right people, an “in” with a valuable group of up-and-comers, and fresh perspectives.

 

With all of these reasons why it is absolutely critical to add quality millennials to your nonprofit’s board of directors, it makes me wonder why I don’t have many friends on the boards of larger nonprofits at all? It begs the question, “What are current board members of nonprofits so afraid of?” Change? Shifting tides? Loss of power? Diminished relevance?

Generational change and progress are inevitable – and they are horrible reasons to cripple the evolution of mission-driven organizations. The new first imperative of power should be not to retain it but, instead, to share it. That is the stuff of a true and worthy organizational legacy.

 

Interested in getting blog posts, tips, and some silly social media geekery periodically delivered in your Facebook newsfeed? Like my Facebook page (or ) Or for more regular sharing of nonprofit marketing information, follow me on Twitter

Posted on by Colleen Dilenschneider in Community Engagement, Financial Solvency, Millennials, Sector Evolution, Trends 2 Comments

The New Trickle Down Effect: Why Nonprofits Are Innovators for Industry

teaching innovation

The company for which I work annually invests millions of dollars to help nonprofit organizations better understand and engage with their donors and visitors… and nonprofit leaders should know why.

It’s been a while since I wrote about myself, so I hope that you won’t mind my taking a moment to point out a trend: Inevitably, after talking shop with readers of “Know Your Own Bone” (but who may not know much about IMPACTS), there’s an awkward moment of silence before I’m asked, “So, why do you do what you do, and how does it…work?”

It sounds like a strange question, but I’ve come to understand exactly what they are asking.

Here’s a bit more about my “day job,” but, on “Know Your Own Bone,” my mission is to make accessible “big data” and data-informed analysis to nonprofit organizations for free (i.e. no advertisements, promoted opinions, sales pitches, etc.) Of course, this response often begs a few follow-up questions: How can I do this and feed myself? And how is this not detrimental to IMPACTS?

It’s no secret that there isn’t generally a massive pile of cash associated with helping nonprofits, and yet I work with a for-profit company that invests millions of dollars to help organizations better understand their market opportunities. It almost risks sounding like an example of “Do as I say, not as I do” – except, it’s decidedly not.

Nonprofit organizations are infinitely complex, and helping to understand how the market engages with that sector has proven incredibly valuable to the other sectors that IMPACTS serves. Indeed, when it comes to innovation, some of the best R&D happening in our space is being pioneered by nonprofits. For once, the “Next Practices” are trickling down from the nonprofit sector to the corporate world.

Here’s why:

1) Motivating visitation and/or giving decisions relies on understanding a series of complex behaviors

While it’s true that nonprofit organizations are not always the quickest to evolve, they rarely get the pat on the back that they deserve for working in an industry that can be exponentially more complex than that of most private enterprise.

Consider this visitor-serving organization example: Getting someone to visit a museum (or theater, symphony, science center, botanic garden, aquarium, historic site, etc.) requires an understanding of many multi-faceted, high-barrier motivations and behaviors. To get to a museum, for instance, a family would need to decide the visit would be worthy of their time, prioritize that experience over every other leisure time pursuit (including staying home and relaxing!), find an open day in everyone’s schedules, get the family dressed and into the car, drive to the museum, park, pay for that parking, play real-life Frogger hustling across a busy street, pay for admission, explore the facilities with the kids until they get tired, stop for snacks (if the kiddos get cranky), avoid (or embrace) the gift shop, then return to the car and fight traffic on the way home…

(Pant, pant…) There is a lot about consumer behavior to understand there…and we haven’t even yet begun to consider the philanthropic motivations that play an important role in helping nonprofits thrive. Perhaps now one can start to understand how – when compared to motivating engagement with nonprofit organizations – getting someone to buy a car, go to a movie, or even vote for a political candidate seems downright simple!

 

2) Understanding those behaviors and motivations informs other industries

Contrast the task of motivating the behavior of visiting an organization with the task of, say, motivating that same small family to enjoy a specific television show in pajamas in the comfort of their own home. If you are a member of the entertainment industry trying to get folks to watch a show – or even sign up for an “on demand” entertainment delivery platform, there is much less to understand and far fewer barriers to engagement.

Understanding why folks behave (or, for that matter, do not behave) in the interests of nonprofit organizations provides IMPACTS with incredible data and insight attendant to extremely complex behaviors, the transitive applications of which frequently inure to the benefit of comparatively less-complex behaviors such as, say, watching television.

Yes. What you work hard to understand and do in your day-to-day jobs at your organization actually informs how other industries do business…because the behaviors that nonprofit organizations motivate are complex and understanding them sheds light on the “hard to measure” aspects of human behavior and motivation. Unlocking the key to complex human behaviors and motivations is the secret sauce in many a corporation’s recipe for success…and the pioneers in this research are often nonprofits.

 

3) People. Planet. Profit. (You actually have THREE bottom lines)

Nonprofit, visitor-serving organizations must not only sustain themselves (some more than others), but they must also serve their communities (people) and social missions (planet). That’s a whole lot to think about compared to private entities – which, generally, are primarily obligated to the single bottom line of profit.

At the risk of some simplification, “profit” is relatively simple to figure out. People and planet – ostensibly selfless business motivations – are a little more inscrutable. And, yet, in our modern era where corporate social responsibility is increasingly good business, there is a growing need to better understand the more intricate aspects of human behaviors.

Again, this doesn’t even touch upon the topic of philanthropy – the motivations of which defy traditional utility curves.

Most simply put, nonprofit organizations are metaphorically juggling three balls at once…while many corporate entities are consumed by the one ball that they have up in the air. Add to this circus the fact that, well, two of your juggling balls are rather strangely shaped. (I love bad metaphors.) Understanding the expertise that goes into juggling three balls at once helps make the work of those with only one or two balls a whole lot easier.

 

4) Nonprofiteers are better than they think (but the imperative to evolve remains urgent)

Visitor-serving organizations, like many nonprofits, can get a bad rap. They are sometimes called slow-moving or culturally antiquated. Negative substitution of audiences is making increasing attendance difficult and long-siloed structures impede abilities to be agile and adaptive. CEOs of nonprofits are generally paid less than their for-profit peers, and retaining talent in a highly-competitive market can be a struggle.

However, consider again that visitor-serving organizations work every day to motivate a series of complex behaviors intended to inspire folks to act in the best interest of not only themselves, but of their larger communities. While some organizations have become accustomed to patting themselves on the back for achieving mediocracy, it’s important to keep in mind that, in many ways, the continued relevance of nonprofits and visitor-serving entities in the face of many challenges is quite a remarkable feat!

I think people who work in nonprofits are the best kinds of fighters. That’s why I’m lucky to get to work with them and that’s why I feel passionate about hounding my company to continue to help them.

 

5) Much of the data conceptually belongs to you

Providing data and insight in a transparent, open-fashion feels like a good practice. Doing the right thing is a reward unto itself. And, in terms of the means of effectuating knowledge transfer, “giving away” information for free is the very nature of blogging.

I don’t think it’s fair to gather information about human behavior regarding visitor-serving organizations and simply sit on it for monetary purposes. Luckily, the company for which I work doesn’t think that either. So I get to share some of it here. I am grateful for that.

The more information I share, the more I hope that I can garner your trust and provide aid as a valuable resource. If I can do that, the data will be more helpful…and the changes we are seeking will have greater impacts in our communities.

Leaders of nonprofit organizations: pat yourselves on the back. What you’re doing is hard, important, and paving the way. 

Data proves it.

 

Interested in getting blog posts, tips, and some silly social media geekery periodically delivered in your Facebook newsfeed? Like my Facebook page (or ) Or for more regular sharing of nonprofit marketing information, follow me on Twitter

Posted on by Colleen Dilenschneider in Community Engagement, Financial Solvency, Myth Busting, Nonprofit Marketing, Sector Evolution, Trends 4 Comments

The New Realities of Advertising Costs (Hint: You Are Getting Less Than You Think)

Budget expenses

Many nonprofit organizations misunderstand the increasing costs of advertising – and it’s costing them dearly.

It’s that season when organizations are preparing their budgets for the upcoming year. For many of us in the communications space, tis the season of spreading tough-love  in the hope that nonprofit organizations don’t hamstring themselves with a flawed “save one’s way to prosperity” approach to budgeting for marketing expenses – especially social media and advertising. Increasingly, advertising is not an optional expenditure – it is a basic cost of doing business for any organization that relies on the time, engagement, or concern of audiences (…which happens to be most organizations).

When it comes to budgeting for a necessary advertising investment, a tremendous challenge confronting many nonprofit organizations is a reliance on precedent behaviors to inform our future planning efforts. The advent of digital technologies amplified by an increasingly platform agnosticism market have rendered many of the traditional “rules” of advertising obsolete. The communications world – and, in turn, the advertising world – is in a period of significant revolution and reinvention. A dogmatic beholdenness to the past is likely to leave an organization forever behind.

Here are two important points that your organization should keep in mind when it comes to the basic cost of advertising:

 

1) The cost of advertising has increased dramatically in recent years and many organizations are not keeping pace with inflation

Though you may be spending more, you are probably getting less return on your advertising investment than you were a few short years ago. The few percentage points that organizations add to their advertising budgets each year is simply insufficient when contemplated in the context of the escalating costs of advertising.

For instance, in my experience, even forward-thinking organizations keep their annual ad budgets relatively stable (“Hey, this is how we’ve always done it!”) and will sometimes add 5-10% if there’s a special program or campaign taking place that they’re trying to promote. The thing is, while organizations think that they are spending more (because they are actually spending more), they are increasingly getting less.

Take a look at the chart below. The chart indicates examples of observed advertising costs during the last five years.  For relativity purposes, the escalating cost factors have been standardized and charted as index values.

 IMPACTS cost of advertising

“Blended CPM” indicates the growth in costs “blended” across all media types (i.e. broadcast, radio, print, digital, outdoor, etc.) as observed by the actual media plans of twelve IMPACTS clients.  CPM is an acronym representing the Cost per One Thousand impressions.  Thus, the average observed costs to advertise have increased by 41% in the five-year duration ranging from years 2010-2014.

As additional examples of advertising costs, within the same five-year duration, the chart indicates that the costs of a 0:30 second advertisement during the Super Bowl and Grammy Awards broadcasts have respectively increased by 60% and 105%.

We are living in an increasingly personalized world that emphasizes speed and convenience. We can simply TiVo, Apple TV or On-Demand our way out of most ads on our favorite television shows because we watch these shows at our convenience. Because of this, programs that folks watch live (e.g. sports, news, award shows, etc.) command premiums when compared to the costs of similar programming a relatively few short years ago.

In the simplest terms: Yes, on average, your organization will need to have increased its advertising budget by at least 40% in order to match your advertising efforts of five years ago. If you’ve added less than 40% to your budget, then your organization may actually be achieving less advertising impact than you were in 2010.

In the end, it’s a lesson in business and economics: You cannot just throw a bit more money at something year over year and get mad when you don’t get correspondingly “more” in return. If you’re not increasing the budget at the rate of what things cost, then you’re actually getting less. This lesson seems particularly challenging for nonprofit boards to understand when they are confronted with a proposed increase in the advertising budget. “So, if we spend more money on advertising, how much more support will we get?” is a perfectly reasonable question posed by many a board member. However, the question from board members probably ought to be, “If we don’t sustain significant investments in our audience acquisition strategies, how many visitors will we lose…and what will be the costs of trying to re-acquire them in the future?”

 

2) The first thing that organizations often cut is marketing (despite the increasing importance of funding in this area)

Compounding matters is the fact that – despite an abundance of the well-publicized reasons why it is a terrible idea – many organizations trying to balance budgets still seem to cut the marketing budget first.

This may be particularly relevant for visitor-serving organizations (museums, theaters, symphonies, gardens, aquariums, zoos, etc.) as these types of organizations are having a rough time meeting attendance goals. The anxiety associated with this causes organizations to deny data and do a lot of dumb things (and maybe some more dumb things) that will hurt them even more in the long run, and cutting marketing budgets in the Information Age is another one of them.

It’s a tough pill to swallow for traditionalists and specialists within organizations, but marketing is increasingly important for the survival of your organization. For many of the most successful organizations, marketing is at the center of strategic conversations. It’s a big change for many entities! And, organizations aren’t solely deciding that this should be the case…the market is deciding for them. As I say in nearly every post: Organizations can sometimes determine importance, but the market determines relevance.

Mix one part “not keeping up with the cost of advertising” with one part “cutting your marketing budget” and watch your audience awareness dwindle to record lows. For those persons in the nonprofit sector who may continue to balk at the idea that they need to spend more to acquire, engage, and communicate with their audience than they did five years ago, I ask you: What makes advertising exempt from the most basic laws of inflation? Again, these cost increases are the most basic costs of doing business.

 

For marketers, it is a tough road ahead: The “This is how we’ve always done things” and “Last year plus five percent” approach to budgeting and media planning that permeates many organizations is an increasingly doomed strategy. In a way, this post isn’t exclusively about marketing or advertising. It’s about a new way to think about the constantly evolving world that we live in. The world waits for no one. We need to keep pace or risk being left behind.

 

Interested in getting blog posts, tips, and some silly social media geekery periodically delivered in your Facebook newsfeed? Like my Facebook page (or ) Or for more regular sharing of nonprofit marketing information, follow me on Twitter

Posted on by Colleen Dilenschneider in Digital Connectivity, Financial Solvency, Myth Busting, Nonprofit Marketing, Sector Evolution, Trends Comments Off on The New Realities of Advertising Costs (Hint: You Are Getting Less Than You Think)

Facebook is Firing Nonprofits (And Why We Are Dumb to Let it Happen)

Facebook Firing

If your organization refuses to spend money on Facebook, then you aren’t firing Facebook. Facebook is firing you. And that’s way worse for you than it is for Facebook.

It’s not news anymore: Facebook has changed its algorithm to make its platform increasingly “pay to play” for organizations. A lot of organizations are upset about this change – after all, nonprofits tend to be cash-strapped entities and paying to boost posts on Facebook represents an unplanned expense into uncharted territory. (How much should we be spending? How do we develop an annual budget for something that keeps changing?! Where will this money come from?)

The result seems to be that many organizations are simply accepting their new lack of organic reach and not boosting posts or otherwise exploring paid ways to get on the “winning” side of Facebook’s algorithm. In a nutshell, many folks (unfortunately) seem to be saying, “We just can’t afford it, so Facebook is less important to us.”

Wait – Hold up! Is social media any less important to your potential constituents and donors? Nope. In fact, data suggest that social media is the strongest and most valuable communication channel in existence today.

What’s interesting about the reaction that some organizations are having is the astounding lack of business savvy or even baseline market awareness associated with the perspective. It is truly shocking to watch. If you’re not experimenting with boosting posts than you’re not firing Facebook, Facebook is firing you…and that hurts you way more than it hurts Facebook. In fact, if your organic reach is still decreasing, then Facebook wants you gone because it thinks you are noise cluttering up newsfeeds with stories that simply aren’t engaging.

I have no affiliation with Facebook. I specialize in overall engagement strategy (that specifically results in increased likelihood of long-term solvency) and do not receive any of my salary for knowing Facebook “tips and tricks” (which become outdated very quickly anyway). I have absolutely no reason for arguing that nonprofits should be experimenting with Facebook boosting aside from my experiences with my clients these last several months – both those that are boosting and those that are not.

Here is some perspective:

 

1) Organizations became acclimated to an economic inefficiency (which is dangerous because such inefficiencies do not last long).

The hardest part about the increasing “pay to play” concept on Facebook seems to be the idea that Facebook was “free” and now it isn’t. First of all, social media is not and never was “cheap” or free – but the issue here is that organizations didn’t need to pay the platforms directly.

Facebook plays an important role in shaping organizations’ reputations, allowing for personal interactions and “touch-points” with constituents, giving organizations a real-time voice, and aiding in perceived levels of transparency and mission impact. Facebook has played a starring role in changing not only the way that businesses and nonprofits work, but it has shaped market expectations about our brands. Facebook has, in many ways, changed the world.

Think about it: In order for the market to have changed so deeply, social media platforms needed to be “free” to enlist and engage the participation of massive numbers of organizations and consumers alike.  (Otherwise, the initial cost to participate may have been an insurmountable barrier to trial.) Because we could all “play,” we all had a role in making the market what it is today – an audience more interested in trust, transparency, and personalization than ever before. But now we live in that changed world and businesses are getting a LOT of free communication and top-of-mind opportunities from Facebook.

Organizations are no longer all that important to Facebook for its solvency. Now Facebook is more important for the solvency of our organizations. Of course, market inefficiencies eventually come correct. We don’t expect to engage with traditional one-way communication platforms for free (TV ads, radio spots) – so it was only a matter of time before two-way communication channels (which are proven to be more effective in driving desired actions on behalf of organizations) demanded payment as well.

In short, organizations got used to an unsustainable market inefficiency. And the rules of economics underscore that those inefficiencies don’t last long.

 

2) Organizations increasingly understand the need to move from quantity of fans to quality of fans on Facebook. So does Facebook.

By now you’ve probably heard a lot about vanity metrics and why your number of fans is less important than having fans that care about your organization and are willing to act in its interest. This type of thinking is especially important for development and membership departments within nonprofit organizations. (Oh, and here are eleven ways you can start focusing on quality over quantity right now).  We are getting it. We are increasingly paying as much attention to “going deep” with our messaging as we are to “going broad” because we know it’s better for the actual, long-term health of our organizations.

Facebook gets that, too. It’s less about having tons of organizations on Facebook making noise (quantity) and more about the right organizations on Facebook that help achieve Facebook’s long-term strategic plans. 

Simply, there are two kinds of “quality” organizations for Facebook: organizations that provide consistently compelling content (because it keeps people logging onto Facebook and checking their newsfeeds), and organizations that pay them. An organization that pays them and provides compelling content is a double win because they pay Facebook to show stories in people’s newsfeeds that people actually want to see. Those seem to be the organizations and businesses increasing in reach right now. Also, it seems that when you boost a post, Facebook sees the increased engagement and gives you a bit of a bump in organic reach when you next post. These are smart business moves for Facebook – they are rewarding their best customers. This strategy makes perfect sense for any enterprise. We want quality over quantity now, too – even within our own Facebook fans!

But let’s look at this in a less-rosy way: If you’re not boosting, you are generally less likely to secure higher levels of engagement (thanks to Facebook’s algorithm), and then you will slowly slip from the newsfeeds of even your quality fans over time. Of course, you can alternatively only post the most engaging of content and go viral with your messaging all the time and you’ll have no problem (which is far easier said than done). Harsh truth: You’re being fired from your most effective communication channel for being bad at it. And you’re letting it happen.

If you have the money to send endless amounts of direct mail which data suggest are increasingly less effective, then perhaps you can spare some of the budget to talk with your audiences instead of talking at them.

 

3) There may not be a business incentive for Facebook to make exceptions for nonprofits

Consider: Audiences are increasingly sector agnostic and your voice is being drowned out by for-profit companies that, in some cases, have incentive to do what you do better than you do it because – thanks in part to the culture of transparency and customer empowerment we’ve created with social media – corporate social responsibility pays off.

Perhaps Facebook will come up with a program for nonprofits that aids in increasing reach for cash-strapped organizations that promote social good. But even then, it is in Facebook’s best interest to make sure that stories that folks don’t care about don’t end up in users’ newsfeeds. If your organization has “dropped out” or stepped back from creating compelling content, you may not be able to gain the traction back to demonstrate that your content is indeed compelling.

 

4) There remains a market inefficiency and this may be the best time to experiment with boosting posts

There is still an economic inefficiency and it’s in our best interest to keep capitalizing on it. Specifically, the buy-in to boost and keep organic reach a bit higher is in flux. Right now may be the best time to play with boosting posts because now is a period of experimentation in terms of quantifying the costs of accessing audiences on Facebook. Until Facebook gets a firm handle on what is the sustainable and appropriate cost of reach, then there is an opportunity for organizations to also engage in relatively low-cost experiments to help inform their future engagement strategies.

So, experiment! See what happens when you boost to your geographic area, or boost to your current fans, or boost based upon interest. Experiment and take note. Arguably, the cost to reach audiences may be lower than it will be in time.  More to the point, the cost to reach audiences may amount to less using Facebook than it is on other communication channels. The point is: You won’t know the opportunity and the outcome until you complete the experiment.  And, it is better to start experimenting now – when the cost of the experiment remains relatively modest – then at a later date when the costs may inflate.

 

We are in a time of change, and it is in the best interest of nonprofit organizations to begin to cultivate an internal structure that is agile and allows for opportunities to quickly capitalize on economic inefficiencies. But it is also critical that we think through our actions – especially the most important ones that affect our relationships with our constituents (and, thus, our bottom lines).  Instead of retreating or focusing on their own, independent next moves, organizations may benefit from considering WHY platforms are making changes. What they uncover may be equally critical for their own survival. 

 

Interested in getting blog posts, tips, and some silly social media geekery periodically delivered in your Facebook newsfeed? Like my Facebook page (or ) Or for more regular sharing of nonprofit marketing information, follow me on Twitter

Posted on by Colleen Dilenschneider in Community Engagement, Digital Connectivity, Financial Solvency, Nonprofit Marketing, Trends 4 Comments

6 Strategic Reasons For Membership Teams to be Involved with Social Media

Geoff Cartoon - Keeping old customers

An organization’s social media initiatives are every bit as important for the membership department as they are for the marketing team when it comes to the long-term solvency of your organization.

It’s not news that social media is an every-department job, but changes in Facebook algorithms seem to have increased the desire to develop social media postings that go “wide” with reach instead of “deep” with constituents. This distraction of focusing on the quantity of those engaged instead of the quality of engagement is hurting organizations – and may be particularly challenging for membership and development teams trying to integrate their functions.

I was recently asked by Blackbaud to conduct a webinar that addressed the role of social media in engaging key constituencies.  I developed “Get Strategic: How to Engage With Members in a Digital Age” to help Blackbaud share my thinking on this popular topic.  (Click on the link to hear a recording of the webinar – It’s free!) Here’s a link to the slides.

I also thought that it might prove helpful to summarize a few takeaways from the webinar that may be particularly urgent for membership and development departments to consider as they plan their organizational futures. The importance of various departments beyond marketing and communications strategically contemplating how they best engage their current and emerging audiences can be a difficult topic for many organizations to tackle for two, unfortunate reasons:

  •  Many professionals (especially in the nonprofit sector) still ignorantly invoke “not my job” on many matters concerning digital communications to the detriment of both their professional functionality and the efficacy of the entire organization.
  • The “siloed” and increasingly outdated structure of more traditional organizations (including many visitor-serving organizations) is challenged by the need to work collaboratively among departments to create the kind of cohesive strategy that is prerequisite for successful digital communications.

 

In my estimation, development teams generally aren’t any more guilty of these organization-hurting offenses than any other department. However, a lack of collaboration between development/fundraising and marketing/communications comes at perhaps one of the most extreme expenses for a nonprofit organization.

Here’s why:

 

1) A member online is a member offline (and vice versa)

Too often, organizations create membership or donor cultivation strategies (or even marketing strategies) and then develop completely independent digital membership and donor cultivation strategies (if they have them at all). A member online is a member offline. You wouldn’t get to know somebody at a party and then completely ignore them and all of the things that you learned when you see them again at a different party. That would be rude and particularly confusing for your new acquaintance (or old friend) – and yet organizations act like this all the time when it comes to melding online and offline experiences. This miss seems to stem from one, basic misunderstanding: that digital strategies are somehow about technology or skillsets and not about a means of engaging people.

Hint: Communication on digital platforms operates a lot like communication in real-life. Membership retention is about PEOPLE – not technology. In real life, we expect people to be transparent, express human sentiment, listen, and be responsive. Those same communication expectations exist on social media.

 

2) Social media is not only valuable at the start of an engagement funnel. It is arguably even more important in the middle where members reside

When folks talk about social media and digital platforms – perhaps especially the marketing department – it’s often discussed as a starting point in an engagement funnel that hopefully leads to visitation (and, then, perhaps membership or donor cultivation). And, social media does aid in reaching new people and support relationship-building at the beginning of that funnel.  But it’s also critical that an organization utilizes social media to deepen connections with your mission because people on social media operate at all levels of an engagement hierarchy – not just at the beginning. If your organization is only putting out content that goes “wide” (or helps to increase reach), and not “deep” (or, content that deepens affinity with your cause), then it’s going to be difficult to turn folks from visitors into more consistent supporters.

Members are in the middle of the funnel – which is a particularly interesting place for a group to reside. They are supporters beyond a basic visitor, but who also hold the promise and potential of becoming donors. In a lot of ways, this is a make-or-break group to engage! They could go either way – and often (in fact, more often than we admit) their decision to renew or not to renew is based upon our own strategies for membership retention and how successfully we engage with this key audience.

 

3) Not all social media followers are equal

In fact, social media inequality is a best practice among successful organizations.  Simply put, your organization’s fans and followers are not all of equal value to your nonprofit’s relevance and long-term solvency – and treating every “like” or opportunity for social care the same way means purposefully sabotaging your ability to achieve organizational goals through social media.

Social care (or social CRM, which is responding to inquiries and taking steps toward active community management) is one of the most important and overlooked aspects of social media communications and brand engagement – and it is increasingly expected by your audiences. It’s a good idea to prioritize social care across the board, but active engagement may be particularly important when it comes to keeping stakeholders like members and donors satisfied online.

 

4) Those likely to be members (of cultural organizations) profile as being particularly connected to the web

High-propensity visitors (HPVs, as we perhaps unfortunately refer to them at IMPACTS) are folks who display the demographic, psychographic, and behavioral attributes that indicate an increased likelihood to visit a visitor-serving organization (museum, aquarium, zoo, historic site, symphony, theater, botanic garden, science center, etc.) These are the people who profile as likely to visit your organization – and also to become members. We have some fun facts about HPVs, but perhaps one of the most critical of all is this: High propensity visitors (and thus likely members) are 2.5x more likely than the composite market to profile as “super-connected.” This means that they have access to the web at home, at work, and on a mobile device.

No matter how you cut it, your members are a connected bunch (Even more so than the composite market, which also places a great deal of value in digital communications.) Ignore this unassailable fact at your own peril.

 

5) The desired membership product is changing

I saved the most important thought for last. Data suggest that (aside from the free admission perk) the desired membership product may be changing from the more “attraction-oriented” benefits of the past (access to member-only events, other discounts), to more “mission-oriented” benefits (a feeling of belonging, supporting the organization). This is especially pronounced among Millennials – or members of Generation Y. (You can find more information on this in my slides from the webinar)

If your membership is struggling among younger audiences, it may be because you (a) don’t offer the desired membership product; or (b) you offer it, but continue to be communicating it in an incongruent “sales-y” way. In sum, know what matters to your potential constituents – and make sure you are not only offering a membership product based upon the correct motivating benefits, but that you are communicating them in befitting manner.

To the folks thinking, “Nope. Nope. Nope. Millennials don’t want to become members.” I say, “Data suggests that you’re wrong. And your defensive way of thinking indicates that you may be ineffectively communicating the motivating benefits of membership.” It’s time organizations get on this. There are young members to be cultivated!

 IMPACTS data - Millennials and Membership

 

6) Make sure social media posts often aim for depth of engagement instead of breadth (because Facebook changes are distracting organizations from doing this)

In the midst of the frenzy associated with Facebook decreasing its organic reach for organization pages, folks seem to be very preoccupied with their ability to utilize content to go “wide” (get a lot of engagement) instead of going “deep” (get the right kind of engagement from the right kind of people).  A healthy social strategy includes both content created to get new folks in the engagement funnel AND strengthen the “passion-connection” that ties an individual to your organization online. (In marketing jargon terms, we call this “strengthening affinity.”) While there are many things that may be done to cultivate members online, making sure that you’re posting the right kind of content is perhaps the most critical.

Next Wednesday (August 27th) I’ll post about immediate opportunities to more deeply engage members that will include ideas from the webinar and some other near-term opportunities to better connect with your digital audiences. If you want to make sure that you don’t miss it, you can subscribe to Know Your Own Bone and receive emails when there are new posts. (Already get these emails? Keep your eyes peeled next Wednesday…and thanks for being a consistent reader! I deeply hope that KYOB provides helpful thought-fuel for you and your organization!)

The web has changed our organizations more than simply “adding a social media arm.” It affects every department within an organization – and because digital engagement strategies are about PEOPLE, it arguably most affects those departments that work directly with audiences. It’s time for organizations to work together to ensure that their digital endeavors are doing more than getting people in the door.  We must also be aware of how digital engagement impacts the experiences that members and higher-level constituents have with our organizations. There’s work to be done!

 

Interested in getting blog posts, tips, and some silly social media geekery periodically delivered in your Facebook newsfeed? Like my Facebook page (or ) Or for more regular sharing of nonprofit marketing information, follow me on Twitter  

Posted on by Colleen Dilenschneider in Community Engagement, Digital Connectivity, Financial Solvency, Fundraising, Nonprofit Marketing, Sector Evolution, Trends Comments Off on 6 Strategic Reasons For Membership Teams to be Involved with Social Media

Data Update: Efficacy of Various Marketing Channels (Social Media Still Top Spot)

DIlbert Social networks, games, and phones

Data indicate that social media continues to be the fastest growing and most influential marketing channel. Social media is an enormously important component of your overall marketing and communication strategy. In fact, data support it as one of the most efficient and effective channels to engage your users and constituents.

IMPACTS tracks data regarding the reach (i.e. the relative efficacy of each channel in terms of its ability to deliver a message within any defined duration), trust (i.e. the perceived credibility of various sources), and amplification (i.e. the re-distribution potential) of various information channels. I originally posted baseline tracking data in 2012, along with an analysis of the reach, trust, and amplification measurements – all of which collectively contribute to the “overall value” metric.

 IMPACTS Overall Value of Information Sources

Having trouble seeing the data? You can open it here:  IMPACTS Updated Overall Value for Sources of Information – 2014

This data derives from a Media Consumption & Usage Study with a sample size of 13,584 adults from North America and Western Europe, and was most recently updated courtesy of a project with Stanford University.  The grace of time has solidified trends suggesting the ascendancy of certain information channels that are increasingly vital to an effective communications strategy. Below are a few notes on the updated findings. Mostly, the findings echo and reaffirm suggestions indicated from previous years.

1) Social media delivers the greatest overall value as a marketing channel and information source

Thanks in large part to the reach (i.e. the ability to reach audiences during a defined duration) and amplification capabilities (i.e. the re-distribution potential) of this platform, social media continues to grow in terms of its overall value as a marketing and communications channel. Digital “touch points” continue to play bigger and bigger roles in cutting through online noise – especially because of the real-time nature of this platform and the ability to have and view more personalized interactions.

 

2) Data do not currently support a finding that word of mouth is suffering because of technology

While word of mouth (person-to-person interactions) experienced a steep decline in 2012, its value has remained relatively stable since. This indicates that, indeed, people are still communicating beyond of the web (e.g. SMS and phone calls fall within this category of communication). While this may be shocking to… well, no one…it is interesting to monitor this channel – especially as it relates to the weight of peer review sites such as Yelp or TripAdvisor.

 

3) Mobile web and peer review sites remain on the rise

Mobile web continues to represent a growing channel. IMPACTS data contemplate “mobile web” separately from “web” so that we may both follow this trend and also assess if the platform (e.g. smartphone) plays a role in the perception of the channel. (In other words, does the market attribute different levels of trust to the web when accessed via smartphone or another method?) Peer review sites such as Yelp and TripAdvisor remain influential. This finding underscores the importance of third-party endorsements when contemplating potential behaviors. In fact, channels that represent paid endorsements (e.g. direct mail, television, radio) exert relatively little influence on the market when compared to their testimonial-based counterparts.  [According to the model of diffusion, the coefficient of imitation (i.e. what people say about you) is 12.85 times more important to building reputation than the coefficient of innovation (i.e. what you say about yourself).]

 

4) Web is affected by the real-time nature of social media channels

While this is an interesting metric to continue to watch, the decrease in web may be affected by the preference for more real-time, ongoing, “living” communication such as the type of communication provided by social media. The role of your website has changed – and this data underscores that it continues to change. Increasingly, the role of your website may be to facilitate and support communication on social platforms, which data suggest may play a more important role in motivating a desired offline behavior.

 

5) Print media and more traditional channels remain in general decline

This may also relate to the model of diffusion (see #3) and an emerging market preference for “personalized” communications (i.e. the perceptual opposite of “mass” media). Moreover, these traditional channels are more difficult to access in today’s world. A strong caution: These numbers do not intend to suggest marketing fund allocation or an advertising plan. Television or print may play an important role in a campaign and should be contemplated as a component of an integrated strategy.

 

6) Email is losing ground

While email retains its place as a reliable communications tool, its overall value is decreasing (which has been predicted and reported even a few years ago). When it comes to email, it may be a good idea to “ride that wave until it dies”…but be ready to catch a new wave as soon as it does! In other words, it’s a good idea to be thinking about and cultivating other methods for retaining constituents if email is currently your primary method.

 

This data serves as yet another reminder of the recent, rapid evolution in the ways that people communicate, spread information, and find value in marketing messages. This is more than just anecdotal word on the street; it is compelling evidence of the way that our society behaves. It remains true that CEOs and managers slow to “believe” in the power of online platforms and social media may need to lower the printed brochure in their hands, put away the flyers, and move their communications into the present.

 

Interested in getting blog posts, tips, and some silly social media geekery periodically delivered in your Facebook newsfeed? Like my Facebook page (or ) Or for more regular sharing of nonprofit marketing information, follow me on Twitter  

Posted on by Colleen Dilenschneider in Community Engagement, Digital Connectivity, Financial Solvency, Nonprofit Marketing, Sector Evolution, Trends Comments Off on Data Update: Efficacy of Various Marketing Channels (Social Media Still Top Spot)

Is your Nonprofit Living in the Past? Nine Outdated Ways of Thinking That Are Hurting Your Organization

Where complacent brands go

If any of these outdated beliefs still linger within your organization, then your nonprofit may be suffering both in terms of finances and mission delivery. It’s time to retire these obsolete practices once and for all:

 

1) You separate marketing and digital marketing because you think they are different

This is generally indicative of an organization that thinks “digital marketing” is more about mastering tools and platforms (e.g. Facebook) than mastering a long-term engagement strategy to strengthen your organization’s brand and mission.

Symptoms may include:

  • Digital initiatives that may appear cutting edge but don’t actually contribute to your organization’s mission or financial bottom line
  • An inability to activate online communities to behave in your organization’s interests despite having numerous fans on multiple platforms

 

Treatment: Certainly, organizations benefit from having a team that excels in online community management and maintains a thorough understanding of social media tools and digital engagement opportunities. That said, it is critical that these team members maintain constant involvement with the broader marketing and public relations leadership so that they may be empowered to integrate a strategy for ongoing engagement that yields returns rather than simply utilizing social media tools for social media’s sake.

 

2) You identify online donors and you treat them differently than offline donors

A donor is a donor. The means of conveying funds to an organization is irrelevant…it’s like treating a donor differently because they used a check for a gift instead of a credit card.  Basic courtesy and “real life” donor cultivation techniques should prevail regardless of how a person chooses to give. A donor who gives online shouldn’t be any less deserving of a personal thank you than a person who gives face-to-face, yet, somehow, the reliance on automated gift acknowledgments remains a practice for many organizations. Similarly, because a donor gives onsite may not mean that the individual does not expect the organization to recognize them when they interact on social media.

Symptoms may include:

  • A general lack of donor retention
  • An even greater lack of donor retention for those identified by the organization as “online donors”
  • Difficulty transitioning donors to the next level of giving

 

Treatment: Gather information and cultivate “online donors” just as your organization would cultivate “offline donors.” Similarly, if a “real life” donor engages with the organization online, acknowledge them and value their digital endorsement and communication. Treat donors online the same way that you would in person – just because something can be automated online doesn’t mean that it should be! Personalized touch points and cultivating the relationship are still critical practices.

 

3) You think marketing and fundraising serve independent functions

Marketing no longer serves as simply the megaphone for an organization. Today, marketing often provides critical touch points that serve to create meaning for audiences and connect them to the organization. This isn’t very different than fundraising.  A failure to recognize the importance of marketing and fundraising working in concert to achieve an organization’s goals may have negative consequences.

Symptoms may include:

  • Inability to identify new, potential donors
  • Few donors actively engaging with your organization online
  • Difficulty transitioning persons with interest in the organization into meaningful donors

 

Treatment: From an org chart perspective, marketing and fundraising departments certainly need not be one entity. However, it is critical that these departments (and the organization as a whole) recognize that the path to success in terms of donor identification, member retention, and donor cultivation lies in an intimate, real-time relationship between marketing and fundraising experts. The fundraising team (next-level meaning-makers) needs the input of the marketing team (and their real-time touch-points with audience members) to identify potential donors and aid their cultivation through an engagement funnel. In fact, social media is the new force empowering giving decisions.

 

4)   You think marketing performs a service function for the organization

If you still think that marketing plays a service role within your organization, then it’s time to catch up.  The role of this team has evolved from being the one-way voice of the organization (i.e. its mouth) to being its eyes and ears as well. More than ever before, it is the job of the marketing department to know, listen, and build relationships with your constituents. By necessity, successful marketing teams are increasingly expert about your audience.

Symptoms may include:

  • Low interest and engagement in initiatives and programs
  • Perceived irrelevance of your organization by the market
  • Difficulty getting attention from audiences
  • General lack of general success of new initiatives

 

Treatment: Consider the input of the marketing team before moving forward with initiatives instead of demanding that they “market this” (maybe not-so-great idea) after its actualization.

 

5)   Your social media managers operate in a silo 

Social media is an every-department job so access to the rest of the organization – especially experts – is critical for creating compelling content. A bad idea: Hiring an outside company to run your social media if you are an organization that builds reputation based upon being “expert” or builds affinity by telling powerful stories that are best communicated with the passion of an insider (which is basically all good stories).

Symptoms may include:

  • Several marketing-related messages on social platforms (which generally do not perform well)
  • Lack of audience engagement on digital platforms
  • Inconsistent social media posting
  • Lack of compelling stories that adequately communicate the passion of your nonprofit
  • Social media posts that demonstrate mission drift

 

Treatment: Make sure that folks working within your organization embrace the importance of sharing stories and are open to aiding social media managers in creating compelling content. Also, do your social media yourself or with a partner that has ongoing access to your entire organization. Your stories are your lifeblood.

 

6) You think the more followers, the better

This one is no surprise by now: The number of social media followers that you have is not necessarily indicative of the strength of your online community. It’s far better to have 1,000 followers with a genuine passion for engaging with your organization and sharing your message, than 100,000 fans that don’t help your organization reach its goals. In fact, having a lot of inactive followers dilutes your community and makes it appear as though you have bad content because not many people are interacting with you, despite your high fan number.

Symptoms may include:

  • An inability to activate fans to act in your organization’s interest despite high fan numbers
  • Distraction from achieving the organization’s true goals due to fixation on unimportant metrics
  • An inability to retain true fans due to superficial content that yields more “likes” than real affinity

 

Treatment: Quit focusing too heavily on fan count (and certainly do not dilute your community by buying fake fans). Pay attention to metrics that matter, and share content that inspires true evangelism. Instead of “the more followers, the better,” think “the more meaningful engagement related to our mission, the better.” If and when those ambitions cross, then that is great.

 

7)   Similarly, you think your number of website views adequately measures online success

It doesn’t. In fact, data suggest that online audiences are more likely to carry out desired behaviors (like making a donation, buying a ticket if you are a visitor-serving organization, etc.) if they are sent to social media platforms or peer review sites (TripAdvisor, etc.).

Symptoms may include:

  • Distraction from actual, meaningful metrics
  • Preoccupation with a metric that is not indicative of success
  • Directing audiences to platforms that are less likely to result in a desired behavior

 

Treatment: The role of your website has changed. Consider website views in the greater context of your overall digital engagement strategy. Understand that this number does not show the folks who are engaging with your brand or researching it on other sites.

 

8) You deny the necessity of brand transparency

This means purposefully leaving your key evangelists out of the loop in regard to big decisions and happenings – it’s always a bad idea. Thanks to the web, we live in a “show and not tell” world and potential constituents make decisions about your brand based upon what you “show.” In sum, transparency is a critical value for successful online communications

Symptoms may include:

  • Negative sentiment or reactions from audiences on social media channels
  • Audience misunderstanding of or disbelief in an organization’s goals or objectives for a given project
  • Lack of trust in organization
  • Constituents “opting-out” of involvement with the organization

 

Treatment: Question someone who tells you to purposefully hide critical information that may aid audiences in understanding your brand or internal thought-processes (whether it is an internal or external person). Times have changed. As is the case in real life, organizations are consistently finding that, indeed, honesty is the best policy.

 

9) You need an industry example before carrying out an initiative that may help you meet your goals

Web engagement best practices are constantly evolving – and so are the platforms upon which engagement often occurs. This means that – from time to time – your organization may come up with an idea for online engagement that may help your organization better reach its goals…but your idea hasn’t been tried before. Far too many organizations prefer not to invest time and resources in a new opportunity unless there is an extant case study available for analysis and consideration. Invariably, it is the laggard organizations – ever fearful of innovation – who are left behind while admiring others’ bold inventions.

Worse yet, some organizations would seemingly move forward with very bad or detrimental ideas simply because they’ve seen other organizations launch a similar initiative.  If your organization is more comfortable copying mediocrity than innovating success, then prepare to soon be irrelevant.

Symptoms may include:

  • Lack of original engagement ideas
  • Lack of superlative perceptions of your organization among audiences
  • Missed opportunities to build affinity and cultivate evangelists
  • Execution of initiatives that do not match the goals of an organization

 

Treatment: Just because an organization carried out an initiative doesn’t mean it was successful or that it is a surefire win for your organization.  View the initiatives of others with due scrutiny or admiration and act accordingly with regard to your own organization’s goals and values. Also, if your organization has an idea for a new initiative that hasn’t been done before, perform a SWOT analysis and if the strengths outweigh the weaknesses, consider giving it a shot. You just might end up being an industry leader.

 

If these old notions still permeate your organization, it’s time to change.

 

Interested in getting blog posts, tips, and some silly social media geekery periodically delivered in your Facebook newsfeed? Like my Facebook page (or ) Or for more regular sharing of nonprofit marketing information, follow me on Twitter

 

Posted on by Colleen Dilenschneider in Community Engagement, Digital Connectivity, Financial Solvency, Fundraising, Myth Busting, Nonprofit Marketing, Sector Evolution, Trends Comments Off on Is your Nonprofit Living in the Past? Nine Outdated Ways of Thinking That Are Hurting Your Organization

Why Social Media Is The New Force Empowering Giving Decisions

Donate button

Nonprofits recognize that being on social media is good for public relations, but it’s increasingly driving innovation in the fundraising space by informing giving motivations. 

By now, even the most laggard of organizations understands that digital fluency is a pillar of any strategy seeking to engage audiences, cultivate constituent relations, and secure donors.  More than a “next practice,” digital engagement is essential to the relevance and solvency of the contemporary nonprofit organization – simply keeping the doors open requires investments of time, talent, and treasure on digital platforms.

But social media is playing an important role in how people relate to and understand nonprofit organizations beyond simply their ability to converse on Twitter or post pretty pictures on Facebook.  In our progressively crowd-sourced, collectively intelligent, peer reviewed world that values trusted endorsements foremost among reputation-enhancing communication channels, social media is emerging as one of the most important tools in the fundraising toolbox.

The William and Flora Hewlett Foundation recently announced that it is ending its eight-year, $12 million funding relationship with sites like Charity Navigator, GiveWell, and GuideStar – sites that attempt to aid donors in making philanthropic decisions based on “data-informed” factors.  An assessment concluded that, “While the foundation’s effort succeeded at producing more information about charity performance, it did little to change donor’s decisions: They continued to give with their hearts, not their heads.”

In many ways, this acknowledgment of the limited efficacy of these sites in influencing donor decisions is a simple response to a decision that the market had already made years ago – these sites simply have not proven meaningfully influential in terms of motivating “data-informed” giving.  Worse yet, many sophisticated donors recognize the type of data aggregated by these sites as somewhat specious – do lower administrative costs resultant from hiring a lower salaried (and, perhaps, correspondingly less talented) CEO really indicate greater organizational effectiveness than an organization that invests more in its people? An objective final analysis may well conclude that these sites did more to harm philanthropy than advance it by promulgating less meaningful metrics as substitutes for actual performance, and, thus, did nothing more than confuse an already incredibly complex field.

If the Hewlett Foundation’s decision recognizes the dwindling influence of these sites, then what are the information resources that impact and inspire our giving motivations? Increasingly, social media is playing a critical role in distinguishing effective organizations from less effective nonprofits for the review and consideration of the giving public.  Much like the initial aim of sites like Charity Navigator, social media sites empower potential donors to evaluate nonprofit organizations – but they do it with their own hearts and minds, and develop their own criteria for what makes a worthy organization.

Here are three ways that social media engagement on real-time, digital platforms is changing the nonprofit sector and empowering potential donors to make more intelligent giving decisions:

 

1) Social media increases the expectation of transparency  (which increases nonprofit accountability)

On social platforms, organizations are “judged” in real-time. Gone are the days of hiding from crowds in order for the CEO to spend a day crafting a response to a crisis. An organization’s tone, transparency, timeliness, and “touchability” (the four T’s of online engagement) may be observed 24/7 on social media sites. Steep expectations of speedy responses to online inquiries demand that an organization has its ducks in a row all the time – not just when there is an urgent need. In short, how good (and timely!) your organization is at carrying out social care matters.

 

2) It is harder for nonprofits to hide a lack of impact (so organizations must show progress or risk losing donors)

Studies reveal that demonstrating impact is a key driver of giving decisions. Right now, it’s cool to be kind and many organizations are sinking or swimming based on their perceived abilities to actually carry out their missions. Because digital platforms are real-time and supremely enabled to demonstrate transparency, it is easier for a potential donor to determine if a nonprofit is actually taking steps to fulfill its stated mission. Or, rather, if your organization suffers from mission drift, a potential donor may be able to see this based on content posted on social platforms. This one takes some thought for nonprofits because – when it comes to social media – many focus on metrics that mean nothing instead of true key performance indicators. It’s easy enough to increase your fan count, but increasing it with the right people who are willing to act in the interest of your organization and its mission is key.  The best way to get the right people to follow your nonprofit? Focus on your mission and impact.

 

3) Failures are more visual  (so nonprofits must consider potential market reactions)

Have you ever been to an industry conference of for-profit organizations?  While the presentations may feature a smattering of self-serving, promotional case studies, they more often overflow with learning from failures and missteps.  In the for-profit world, failure is a sort of badge of honor viewed as a healthy part of the innovation process (provided, of course, that one learns from the failure and applies this knowledge to a consequent effort).

For nonprofit organizations, making a “mistake” or even sharing a true, hard lesson at a conference seems verboten. “What if admitting that we don’t do everything right all the time results in fewer donors?” “The CEO won’t fund our presence at this conference so that we can share something that we did wrong!” As a result, nonprofit conferences may be good for networking and very, very useless for actual learning as they are generally self-promoting, self-congratulatory hot air festivals by nature (…or perhaps simply by our own perceived necessity).

Social media demonstrates that the market’s reaction to strategic decisions demand that organizations consider their constituents. Remember when Susan G. Komen for the Cure cut funding for Planned Parenthood and social media exploded? Susan G Komen still hasn’t recovered financially – and a large part of this may be due to ongoing social media conversations.

The Komen situation may have revealed a fundamental incongruity with the personal agenda of the organization’s leadership and its stated mission.  A critical aspect of the failure stemmed less from an unpopular, controversial decision and more from the response (or immediate lack thereof) to the market’s reaction.  The lesson is that we need to be ever more “outside-in” in our consideration of a situation and not confuse our internal ability as supposed experts to declare “importance” with the market’s absolute right to determine “relevance.”

The public nature of social media demands that organizations consider market reactions. It makes leadership think twice about the people whom they serve and how they go about their business. It gives the market a voice, and threatens to punish organizations that do not consider the folks who actually matter to the relevance and vitality of your organization.

 

Yes, social media takes time, talent, and treasure – but it’s worth the investment. Those very things that make it hard for some organizations (transparency, demonstrating impact, having the market as the true boss to the boss) will actually help us move toward a stronger, more intelligent service sector that is more effective and efficient at achieving social good.

Getting smart about social media isn’t about adapting to technology. It’s about people. It’s about showing of the true identity of your organization. If you don’t value social media, then you don’t value your audiences.

Hewlett’s funding decision recognizes an inalienable truth: People don’t want a middleman telling them what to do with their money. They want to decide how they feel about your organization for themselves.  Social media is your seat at the table for this conversation with donors.  Speak now.

 

Interested in getting blog posts, tips, and some silly social media geekery periodically delivered in your Facebook newsfeed? Like my Facebook page (or ) Or for more regular sharing of nonprofit marketing information, follow me on Twitter

Posted on by Colleen Dilenschneider in Community Engagement, Digital Connectivity, Financial Solvency, Fundraising, Myth Busting, Nonprofit Marketing, Sector Evolution, Trends 5 Comments

There Is No Mission Without Money: Why Cultural Organizations Need To Get Smart About Pricing Practices

museum admission line

This article concludes a four-part series intended to help visitor-serving organizations understand and respond to emerging trends that will impact their financial and mission-related goals. Learn more about the series here. 

Austerity measures and the loss of heretofore “reliable” funding mechanisms pitched many European cultural organizations into a tenuous financial state and catalyzed a conversation concerning the sustained solvency of visitor-serving enterprise worldwide. In an increasingly competitive market where volume-based strategies (such as an ever-increasing attendance) are less likely remedies to the new economic reality that emphasizes earned revenues, 2014 will mark the year when organizations will need to “get smart” about leveraging data to develop intelligent, efficient price indices. In turn, analysis of an organization’s pricing structure will likely – and necessarily – foster additional discussion concerning the creation of more effective affordable access programming.

Nonprofits are increasingly competing with for-profit organizations as private companies capitalize on shifts in market behavior toward supporting social causes. The market – and especially millennials – are also increasingly sector-agnostic, meaning that simply being a nonprofit doesn’t necessarily indicate to audiences that your organization is providing more social value than a private company.   This is one of the reasons why visitor-serving organizations that highlight their mission outperform museums that market themselves primarily as attractions. 

It’s time to pause and think about your organization’s relevance – and relevance is determined by the market and the support that your organization is able to summon. In short order, museums that cannot survive a “natural selection” and appeal to audiences will sink due to lack of support (relevance), while those that remain solvent and vital (while also pursuing their mission), will enjoy sustained success.

 

1) Here’s why your organization needs to think about revenue and pricing right now (and more than ever before):

 

A) In general, fewer people may be attending your organization because of negative substitution of traditional visitors so increasing attendance may prove challenging in the near-term.

Visitor-serving organizations’ (VSOs) “historic” visitors are leaving the market at a faster rate than new high-propensity visitors are entering the market, creating a negative substitution phenomenon that does not paint a bright future (or present, for that matter) for VSOs. In fact, for every one historic HPV that leaves the market, they are being replaced by 0.989 “new” high-propensity visitors. That may sound like a small difference, but these people add up! Keep up your hard work reaching your traditional audiences and – for no fault of your own – negative substitution factors would suggest that an organization currently serving one million annual visitors will attract 946,000 visitors five years from now (that is 54,000 fewer people, and a likely corresponding decline in membership and program participation). This troubling “glide path” also considers that you’ll be doing everything that you can do to meet your current audience’s needs, and continue to market to them like exceptional rockstars! This data suggests that the key to long-term organizational solvency is to evolve our engagement strategies to include your emerging high-propensity visitors.

The good news: If museums begin to target and cultivate new audiences now, we should start to observe a broad attendance turnaround in year 2019 as emerging audiences (such as English as Second Language households) continue to acculturate into the “mainstream” market and if millennials (who will dominate the market in terms of number and purchasing power) have been engaged by VSOs. But the attendance trend still stands: In spite of overall population growth and even if your organization does its very best and starts evolving right now (as you should in order to get things back up when the market is ripe around 2019), there’s a good chance that your attendance numbers may flatten out these next few years.

 

B) Expensive special exhibits are often financial drains when compared to the potential alternative uses of these same funds.

Despite clear data that utilizing special exhibits to cultivate visitation is an ineffective long-term strategy and has particularly costly and detrimental consequences for organizations, many VSOs (and museums, in particular), get wrapped up in this bad, bad practice when times get tight.

In my world, we refer to organizations that prioritize special exhibits over building affinity for permanent collections as committing “blockbuster suicide.” And – though I won’t throw any organizations under the bus by mentioning their names – I’ll bet that you can think of an organization or two that has “committed suicide” in this way and is now in quite a financial pickle.  These museums train even their closest constituents to wait for expensive exhibits in order to motivate a return visit. Not only is this plan ineffective and ridiculously short-sighted, but it’s also very expensive.

In an economy that increasingly relies on maximizing earned revenues from a finite audience, the margin of financial success is very small. Many organizations cannot afford expensive vanity projects that do little to improve net revenues but add significant costs to their financial model.  Alternative uses of funds that focus on improving the visitor experience frequently realize better returns than the costs to actualize a “special” exhibit.  While many organizations have become very astute at calculating per capita revenues, it may also be wise to similarly calculate the per capita operating costs attendant to serving your visitors.  We reliably observe that exhibits increase per capita operating costs at a level that exceeds any short-term increase in per capita revenues.  In other words, there is little evidence to recommend the viability of special exhibits as a sustainable revenue maximization strategy.

 

C) Visitor-serving organizations that discount to increase word of mouth and drive attendance experience the backlash of negative reputational equities.

What about social media? Can’t we use that to drive attendance? Yes, data suggest that utilizing social media to increase reputation in order to drive attendance is effective and indeed you should! However, when times get tight financially, we see many organizations resort to offering discounts via social media…and offering discounts via social media is a big mistake. This practice cultivates a “market addiction” that has long-term, negative consequences on the health of your organization.

Moreover, the more steeply you discount, the less likely visitors are to return. (Here’s the data again). People also tend to value what they pay for. Those who visit your organization at a discount are also statistically less satisfied with their experience and report more negative reviews than those who come in at full price (Hey, you devalued your brand first!). So much for crossing your fingers for better word of mouth as the result of a discount…

 

 

2) Now look at how most organizations decide how to price for admission:

Many organizations price their admissions based on what we at IMPACTS have termed “unintentional collusion.” Take a look back in time to your most recent conversation about pricing. The origin of your pricing framework probably went something like this:

IMPACTS unintentional collusion pricing

This happens because organizations misunderstand a fundamental principle of pricing.

Museums actually have different reputational equities and thus differing values that the market is willing to pay for a unique experience. If you’re a zoo that is charging the same admission as a nearby children’s museum (or vice versa), then your organization may be ignorantly “leaving money on the table” by relying on the comparative price of a neighboring or “like” organization. Each museum actually has an optimal price index (often best derived as the result of data-based price analyses) wherein the optimal price to visit an organization maximizes revenues without demeaning attendance potential. Along these same lines (and for the reasons stated above), I’d like to offer up a concept that is increasingly critical for the long-term health and vitality of many VSOs:

The amount of revenue that your organization secures is more important than the amount of attendees that walk through your door.

Many executive leaders and board members have a shockingly hard time understanding this necessary – and completely pragmatic – evolution in visitor-serving “business” practices. Many have been hardwired over time to think of success as the number of people that walk through the door. (Why do we even think this way anyway?! It’s an outdated preoccupation with a relatively meaningless nonprofit output.)

The most direct and savvy way to reap the benefits of your labors cultivating evangelists and working to increase your reputation?  Utilizing it to increase your revenue. And when attendance plateaus at the time that your brand is at its most premium, the most efficient way to do this is to adjust your admission price accordingly.

 

3) Optimized pricing will necessitate conversations about affordable access programming that serves lower-income and other underserved constituencies (in other words, programming that actually works)

If your organization has been value-advantaged (“leaving money on the table”) when it comes to your admission price, then raising the price of tickets may, indeed, increase the barrier for low-income households to attend your organization. Because affordable access is often a key part of many organizations’ missions – or even required in order to be eligible for certain grants and government funding opportunities –  getting smarter about pricing will mean getting smarter about affordable access programs as well.

Experience at IMPACTS has shown time and time again that many affordable access programs are extremely inefficient. Specifically, many affordable access programs achieve startlingly little in terms of providing targeted benefit to low-income households and, instead, allow discounted access to those who would otherwise be able and willing to pay full price. These programs are neither capturing low-income households, nor are they increasing revenues so that museums may more effectively and efficiently fulfill their missions. They are glorified discount programs that organizations offer so that they may check off a symbolic box of “affordable access.”

As visitor-serving organizations realize the need to pay attention to pricing and maximize their investments, there will be incentive to re-evaluate affordable access programs so that they actually work. Namely, that they provide an opportunity for low-income households and other targeted underserved audiences to visit the organization without concurrently discounting admission for those who would be willing to pay full price for your unique experience.

All of this is a long way of saying that nonprofit organizations are finally going to have to think about money and stop defending outdated nonprofit dogmas that tend to demonize revenue as a “necessary evil.”  Museums, zoos, aquariums, performing arts and other cultural organizations are big business – accounting for $135 billion in annual economic activity and more than 4.1 million jobs.  Instead of considering volume of visitation as a key performance indicator, we ought to instead focus on meaningful outcomes and recognize that our collective ambitions to achieve social good require revenues.  In other words, there is no mission without money. 

 

*Photo credit: Telegraph, AP (The photo choice has nothing to do with the Metropolitan Museum of Art’s pricing!)

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Posted on by Colleen Dilenschneider in Community Engagement, Financial Solvency, Myth Busting, Sector Evolution, Trends 3 Comments