Admission Price is NOT a Primary Barrier for Cultural Center Visitation (DATA)

It’s time to get real about why many people aren't visiting cultural organizations. Generally, price is not the biggest Read more

Fads vs Trends: How Organizations Can Tell The Difference (And Why it Matters)

Mixing up fads and trends often leaves executives frustrated, confused, and - worst of all - fearing innovation. Here's Read more

Why Donors Stop Giving Money to Cultural Organizations (DATA)

Why do some people make a donation (or a few) to a cultural organization and then simply stop giving? Read more

The Phrase That Effective Leaders Never Say

Hint: It’s not “This is how we’ve always done it!” But it is another poor excuse for avoiding necessary Read more

Schedule Drives Visitation to Cultural Organizations And Nobody Is Talking About It (DATA)

 Organizations often overlook the single biggest factor influencing attendance. Here's the data that nobody's talking about.  The schedule of a Read more

The Simple Reminder that Significantly Increases the Likelihood of a Successful Nonprofit Initiative

Want to increase the chances that your organization’s initiative will inspire action on behalf of your mission? Don’t forget Read more

Community Engagement

Schedule Drives Visitation to Cultural Organizations And Nobody Is Talking About It (DATA)

Examining Schedule- the top influencer for visitation

 Organizations often overlook the single biggest factor influencing attendance. Here’s the data that nobody’s talking about. 

The schedule of a potential visitor plays a leading role in a visitor’s decision to attend a cultural organization, but many organizations don’t think twice about schedule (focusing instead on items such as cost of admission, special events, or the content of a program or exhibit). These items are not unimportant, but the data on the importance of considering audience schedule is unassailable. Want more people to visit? It’s time to understand the leading roles that schedule and hours of operation play in the decision-making process.  

Let’s use data to bust some popular myths about visitor motivations, and take a look at four misunderstood bits of information regarding the role of “schedule” in the visitation decision-making process:

 

1) Schedule is the single biggest factor contributing to visitation (not cost or specific content)

It makes perfect sense: If a visitor-serving organization is not operating when people can or want to visit, then those people aren’t going to visit. In Western Europe, folks are more willing to schedule their work and personal lives around visiting a cultural organization that has a good reputation. (Of course, a shorter work week and more generous vacation time allowances in Western Europe help create more schedule flexibility!) In the United States, that’s just not happening.

IMPACTS- Discretionary decision making utility model A high-propensity visitor is a person who demonstrates the demographic, psychographic, and behavioral attributes that indicate an increased likelihood of visiting a cultural organization. These are the people who are most likely to visit our organizations, and they are “where our bread is buttered” in terms of visitation. People in the United States – including high-propensity visitors – do not generally reorganize their lives in significant ways in order to visit cultural organizations if their operating hours are inconvenient or conflict with work (or school) commitments.

Notice also that schedule is a significantly more important factor in the decision-making process than is cost for high-propensity visitors. Keep in mind that many “minority majorities” and (especially) millennials qualify as high-propensity visitors – and that high-propensity visitors are not necessarily the same as historic visitors. (There seems to be this weird idea that millennials and “minority majorities” are the same as affordable access audiences and are unwilling or unable to support cultural organizations…but there’s abundant data demonstrating that this is not the case – though we do desperately need to get better at attracting these emerging audiences.) The key to meaningful engagement for people who are interested in your content may not be cutting admission by $5 (which data suggest doesn’t work), but, instead, may be establishing hours of operation that better conform to our audience’s preferences.

 

2) Take a close look at when you are open and when audiences are easily available to visit (because they often are not the same)

Take a look at this data from the National Attitudes, Awareness and Usage Study of 98,000 adults and counting. You’ll notice from the last four bars that folks generally do want to visit cultural organizations! You’ll also notice from the first two bars that although folks indicate an interest in visiting, fewer actually do visit. What gives?

IMPACTS - Visitor Attitudes

We dug in a little bit deeper as to why people who report interest in visiting cultural organizations may not actually visit: For people who would like to visit a cultural organization but haven’t visited, schedule conflicts (including ill-suited hours of operation) are the primary barrier. Take a look at how these schedule conflicts stack up:

 IMPACTS - Visitation Barriers

Work schedule conflicts make perfect sense as the leading barrier to visitation for folks who may be otherwise interested in attending an organization. Think about it: Most of the time, cultural organizations with operating hours are generally only operating when people are at work! And some potential visitors have professions that keep them busy working during the weekends as well.

Weekend activities are precious. For potential visitors who do not work on the weekends, there’s steep leisure activity competition – including simply staying home and binge watching Netflix. And when folks can take a holiday (as seen in the data above), there are often other commitments to tend to that take precedent – such as visiting family. Moreover, students tend to be in classes during traditional weekday hours of operation.

When we add all of these things up, it begs the question: How do cultural organizations determine their hours of operation? Do we have these hours because that’s how we’ve always done it? And, knowing what we know about today’s connected, real-time world, would we still choose to be the most inaccessible in the early mornings before folks head to work and in the evening when they have their most discretionary leisure time?

Of course, this issue may require an industry evolution (revolution?) to resolve. We’ve spent years training audiences to visit us during holidays and weekends (a tacit acknowledgment that 9a-6p schedules may suit no one but our staff). Retraining audiences is hard to do…but changing the public perceptions of cultural organizations and better serving our missions may necessitate a good, hard look at how we approach our hours of operation.

 

3) Organizations are unlikely to move visitation to a shoulder season without risking overall attendance

Perhaps the biggest industry misconception about schedule as a motivator for visitation may be that many organizations think that they can change it. This is a difficult – if not impossible task – and more often than not, results in a very poor reallocation of resources.

Take a look at this 10-year analysis of attendance by month to 78 US visitor-serving cultural organizations. The analysis indicates clear “peak” and “off-peak” seasons. This data indicates the time periods when people want to visit cultural organizations (given the current schedules that cultural organizations keep) – clearly illustrated by the fact that these are the times when people are, in fact, actually visiting.

IMPACTS -Monthly attendance to VSOs

The chart below organizes the monthly attendance data by season. The summer season accounts for nearly 37% of total attendance. Also, the spring season, driven by the traditional spring break holiday from school, accounts for approximately 27% of an organization’s total annual attendance.

IMPACTS Seasonal attendance to VSOs

Now that we’ve established that the market obviously has clear seasonal visitation preferences, let’s bust some backward thinking. It is a myth to believe that efforts during off-peak seasons can easily “make up” for poor performance during the peak spring and summer months. Think of it this way: If your organization welcomes 200,000 visitors per year, and 14% of them are visiting in July, an emphasis on increasing attendance during the month of October (when only 6% of visitors historically attend) is not going to produce the total visitation impact as would maximizing peak season attendance. This is especially true in our world of finite resources. Increasing an investment in an off-peak season often means reallocating investments from peak seasons. This alternative use of funds is very unlikely to produce a net benefit for the organization.

Q: What if an organization reallocates some of its resources from peak season to off-peak season? A: It’s not usually a wise financial move. Here’s a case study from my work at IMPACTS that clearly demonstrates the point. Consider the recent example of a large visitor-serving organization (annual attendance >1,000,000) that developed a strategy to increase year-end visitation during the holiday season by reallocating some audience acquisition investments that had been traditionally deployed during the peak season. As a heads-up, this was a relatively modest reallocation of investments and the organization was still investing at a considerable level during the peak season…just not as much as it had in the past. Let’s call this reallocation of resources in an attempt to alter visitation the organization’s “shoulder strategy.”

IMPACTS Shoulder season investment case study

Attendance during the holiday season did improve by 1.17% – but at the expense of attendance during the peak season (which declined by 4.00%). More importantly, a 1.17% increase in attendance during the holiday season only equated to an additional 3,306 visitors…while the 4.00% decrease in peak season performance cost the organization 108,840 visitors. In other words, it proved impossible for the organization to “make up” peak season attendance during an off-peak period by reallocating peak-season resources to the off-peak period. Here’s a look at this information another way.

IMPACTS Shoulder season strategy outcome chart 

There are few meaningful ways to fully compensate for underperformance during a peak season by emphasizing the off-peak season, nor is it likely that a significant investment in the off-peak season will return significant attendance benefits to the organization when compared to the potential of that same investment deployed during a peak season. Schedule is simply too important of a factor to our audiences for them to alter their behaviors to suit our preferences – after all, we don’t define our peak seasons, our audiences do!

Certainly, there are things that an organization can do to try and encourage attendance during less popular months – but don’t rob from peak seasons to pay for an off-peak opportunity. Your organization needs to make its hay when the sun is shining.

When trying to encourage greater visitation during off-peak seasons (hopefully through additional investment rather than taking from peak season resources), remember that discounts artificially increase visitation and change visitation cycles. In fact, discounts do a whole host of not-awesome things for your long-term bottom line. When you discount, you are simply displacing visitation from another season, decreasing visitor satisfaction, devaluing your brand and – perhaps most importantly – decreasing the likelihood of any return visitation at all.

 

4) Attendance loss from unexpected closures is greater than most organizations realize (and it is not generally replaced)

We are often wrong about the impacts of an unforeseen closure for two, big reasons that are important to understand beyond the framework of attendance and revenue projections. When an organization is closed at a time that it might otherwise be open, visitation generally is NOT displaced to other times of the year. And, to top it off, we lose more people than simply those who had planned to attend the organization that day. I wrote a separate post about this earlier this year when snow was hitting the East coast, and it’s worth revisiting here.

Take a look at the math and see just how much we underestimate the lost annual attendance due to unplanned, short-term facility closings. The chart below illustrates data from 13 organizations over a three-year analysis and includes a range of cultural, visitor-serving organizations (each represented by letter). The “Expected Decline” value indicates the number of visitors as a percentage of annual market potential that were expected to be lost by an unforeseen facility closure. If an organization’s market potential analysis suggested attendance of 1,000 visitors on a given Tuesday, and the organization was instead closed that day, then the expected decline in annual market potential would be 1,000. Pretty logical, right? The “Actual Decline” value indicates the actual, observed percentage decline relative to an organization’s annual market potential.

IMPACTS- Immitative value applied analysis

 

 Every organization quantified in the study indicated an actual decline greater than the expected decline. There are two, important reasons why expected and actual decline do not align in commensurate measure.

First, organizations underestimate attendance loss during these days because they do not understand the role that schedule plays in visitation. When people plan to visit an organization, but those plans fall through, visitors are not likely to simply “come back next month.” Those visits are generally lost.

Second, when we close for any reason, we don’t merely lose the people who were going to visit. We lose the recommendations, social media posts, and shared stories of all of the people who were going to visit that day – and the impact of the loss of earned media can be huge. In fact, for every one visit lost due to an unplanned closure, the net annual impact on market potential averages a decline of 1.25 visitors. Thus, if a sustained interruption to your operation results in 20,000 fewer visits, then the annual impact of this business disruption is likely to be lost attendance of 25,000 when compared to your organization’s market potential. Again, you can read more about this here.

To be clear, I’m not suggesting that organizations never have unexpected closures! Things happen for which we cannot always plan – and sometimes situations arise which simply make it unsafe for staff or visitors to make it to our institutions. What I am saying is that we consistently underestimate the “now or not-anytime-soon” nature of schedule as a primary influencer of visitation decisions.

 

Considering the critical role that schedule plays in audience motivations, one would think that we’d talk about our hours of operation at least as often as we discuss our reputations, our special exhibits/programs, and our admission cost. But we don’t. As cultural organizations, we talk a lot about accessibility. However, many of us seem to overlook the most basic foundations of this concept – our schedule and open hours. It’s time to take a hard look at the primary barrier to visitation so that we may more effectively carry out our collective missions of making the world a more educated and inspired place.

 

Like this post? Please check out my YouTube channel for some video fast facts! Here are a few related posts from Know Your Own Bone that you might also enjoy:

 

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

Posted on by Colleen Dilenschneider in Community Engagement, Financial Solvency, IMPACTS Data, Myth Busting, Nonprofit Marketing, Sector Evolution, Trends 2 Comments

The Simple Reminder that Significantly Increases the Likelihood of a Successful Nonprofit Initiative

Want to increase the chances that your organization’s initiative will inspire action on behalf of your mission? Don’t forget this simple, guiding equation.

As nonprofit cultural organizations, we are constantly asking audiences to act in the interests of our missions. We ask them to do all sorts of things such as pay us a visit, make donations, become members, volunteer, or even take a political stance. Today’s Know Your Own Bone Fast Facts video includes a simple – yet all too often forgotten – tip that significantly increases the chances of success for your organization’s initiatives.

Think about the most successful programs and initiatives that your organization and others have carried out. Chances are, no matter what the goal, the initiatives followed this simple equation: An organization’s goals + market preferences = action.

equation for successful initiiativeIt sounds so simple, right? But too many organizations act as if it’s not an equation at all. Most organizations act as if it is possible to effectively inspire action simply by communicating an organization’s goals. What do we think we are…mind controllers? (Although – hey, ethics and morality aside – a bunch of mission-driven folks with the power to get people to make the world a better place simply by saying so might not be so bad…)

Here are some reminders when considering a new initiative and its likely success:

 

1) Old habits and expectations die hard

Organizations often forget that there’s more to inspiring action beyond simply communicating goals because we are used to simply communicating our own goals! Think about it: In the past, organizations (and the world in general) relied on one-way communication channels such as print media and radio in order to transmit their messages. Traditional media channels allow organizations to talk at audiences, but they do not allow organizations to talk with audiences. Basically, they are big mouths – with no ears or actual way of communicating via the messaging medium at all!

Today’s digital communication channels are more dynamic and they require a shift in leadership mindsets in order to effectively be deployed. These channels now allow organizations to talk with their audiences. Like traditional media, they can have mouths that allow them to “speak” messages outward – but they also have ears to let audiences speak back to organizations on the same channel. Depending on the initiative, communication channels today can even be considered to have arms in that they allow organizations to actively integrate audience engagement into the initiative in real time!

 

2) Digital connectivity increases the need to be relevant

Because we can talk with audiences, we need to be even more relevant in our messaging with regard to considering market preferences. We have no excuse for not knowing our audiences and their preferences today. After all, we are constantly connected to them!

In fact, these dynamic communication channels necessitate that we do consider market preferences. There’s no more excuse for simply “telling” audience members that something is important without considering that the interaction may be more like a conversation than ever before.

On this website, I often write: An organization can declare importance, but the market determines relevance. In other words, sometimes it doesn’t matter how loudly an organization uses its mouth to shout that something is important. If people don’t care about it and if it doesn’t match what they want, then that message is irrelevant.

 

3) Integrating market preferences is a no-brainer

Generally speaking, being aware of your audiences and their wants, needs, and interests – as well as how they prefer to communicate and create connections – is a no-brainer.

Trend data can help your organization spot emerging market preferences – but your organization may spot some of these same trends on its own simply by listening to your audiences. And when these preferences are detected, it’s important (and perfectly sensible) to utilize them in order to inspire connection and engagement. Current market preferences include things like personalization, participation, transparency, and social responsibility. If your organization is thinking about carrying out a new initiative, it will help to consider these items within your organization’s engagement strategy.

Initiatives that are contemplative of what the market wants or needs are more likely to inspire action. It may not sound like rocket science, but it’s a reminder that the world is changing, and that our operations and concepts of “business as usual” must continue to evolve as well.

In many ways, we need our audiences – and the behaviors that we aim to inspire within them – more than they need us. We live in a new world of communication and connectivity – and organizations that consider themselves conversationalists instead of lecturers will stand to benefit from this perspective.

 

Like this post? Please check out my YouTube channel for more fast facts! Here are a few related posts from Know Your Own Bone that you might also enjoy:

 

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

Posted on by Colleen Dilenschneider in Community Engagement, Digital Connectivity, Fast Facts Video, Fundraising, Myth Busting, Nonprofit Marketing, Sector Evolution, Trends Leave a comment

Five Data-Informed Fun Facts About Visitors to Cultural Organizations

Visitors to cultural organizations often have certain telltale behaviors.  Here are five of them.

This week’s Fast Facts video is a fun one that shares a few data-informed findings about the kind of people who visit cultural organizations. Thanks to IMPACTS, I’ve got my hands on a whole bunch of trend data and sometimes little fun facts are just…well, fun!

Here are five, data-informed fun facts about high-propensity visitors to cultural organizations. 

 

The introduction, conclusion, and one of the fun facts merit a deeper, written dive. There a few important, extra takeaways worth noting from this video (that are not the five fun facts themselves):

 

1) Not everyone wakes up wanting to visit a cultural organization

Yes, I think that this is a bummer just like you do. If everyone wanted to visit cultural centers, we wouldn’t be having so much trouble engaging more diverse audiences or even attracting millennials at representative rates. Cultural organizations often have a hard time admitting to themselves that their likely audiences aren’t “everyone.” This certainly does not mean that we shouldn’t try to get “unlikely” visitors in the door. We really, really should – and in fact, we need to evolve our business models and better engage these audiences in order to survive. But the reality is that some people are more likely to visit cultural organizations than others.

As much as our industry may appreciate a scapegoat, data and economists alike have been proving to us for years that free admission is not the cure to engagement that many imagine it to be. The sooner that we move on from this, the sooner we can create affordable access programs that actually work (here – read this, too), and the sooner that we can create business models that are more sustainable.  We are so busy fighting to maintain our belief in the myth of free admission curing engagement, attendance, and participation issues that we aren’t moving forward, or even thinking creatively or strategically about how to stay alive and relevant long-term. But I digress…

A high-propensity visitor is a person who demonstrates the demographic, psychographic, and behavioral attributes that indicate an increased likelihood of visiting a cultural organization (e.g. museum, aquarium, botanic garden, historic site, symphony, theater, etc). High-propensity visitors are the folks who keep our bread buttered – they are the folks who visit, donate, and reliably engage with our organizations. This video covers five, random fun facts about these people.

 

2) Visitors are extremely connected to the Internet

High-propensity visitors are 2.5x more likely than the average person to qualify as being “super-connected.” This means that they have access to the web at home, at work, and on a mobile device. In fact, these folks acquire information regarding leisure activities almost exclusively via the web, social media, and peer review sites like Yelp and TripAdvisor. Visitors to cultural organizations have constant connection to the Internet – meaning that what cultural organizations do online is really, really important.

Interestingly (though unsurprisingly), millennial high-propensity visitors are crazy super-connected. That said, the folks that are going to attend a cultural organization are all looking things up online and using the web and social media, regardless of age.

 

3) Likely visitors are not necessarily rich

“No kidding,” you’re probably thinking if you’re reading this before watching the video. After seeing the five fun facts about high-propensity visitors, though, you may be thinking that high-propensity visitors must be very rich. Being a high-propensity visitor has nothing to do with being “rich.” Plenty of not-super-rich people have a cat or dog, like to hike or ski, enjoy a nice meal with a great glass of wine, and occasionally travel overseas for vacation. This person doesn’t have to be a multi-millionaire. (I mean, they could be, but they don’t have to be to possess these behaviors.)

Being a high-propensity visitor is indicated by how someone chooses to spend the money that they have – not that they have tons of it. How someone chooses to spend thier money is a choice. So is how someone chooses to spend their time. Being a high-propensity visitor isn’t innately about being rich or poor. It’s about how someone chooses to invest his or her leisure time and money.

 

These three items may seem obvious to some, but they are worth extra attention because they tackle a few myths: 1) That likely visitors to museums include everyone (especially when admission is removed); 2) That the web and social media play “supporting” roles in reaching, attracting, and retaining audiences; and 3) That the most likely visitors to cultural organizations are rich. These popular beliefs are false. We know they are false. And yet they permeate too many, critical conversations.

Once we better know our audiences, then we’ll be best able to serve them.

 

Like this post? You can check out more Fast Fact videos on my YouTube channel. Here are a few related posts from Know Your Own Bone that you might also enjoy:

 

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

Posted on by Colleen Dilenschneider in Community Engagement, Digital Connectivity, Fast Facts Video, IMPACTS Data, Millennials, Myth Busting, Nonprofit Marketing 1 Comment

Three New Trends For Cultural Organizations That Are Not New At All

News ideas for cultural organizations that are actually old ideas

Those “new” trends that need to be embraced within cultural organizations? They aren’t new at all…so let’s stop being scared of them. 

If you work within a cultural organization, then you are probably aware of some of the new, big trends and ideas confronting organizations right now: Making organizations more participatory and social, embracing innovation, securing word-of-mouth engagement in our connected world, and framing collections so that they are right-now relevant. Sometimes it feels like organizations may never be able to successfully welcome and adopt these new changes…

Here’s the thing, though – none of those are new concepts.

The very first museums were founded on many of these ideas. In reality, solitary experiences, primarily showcasing the past, and relying on traditional marketing channels to get the word out are the new concepts. What organizations are trying to do today may simply be examples of returning to their roots. 

Here are three of the oldest, “new” trends with which organizations are currently wrestling:

 

1) Solitary experiences are new (Social experiences are old)

Let’s start with arguably the best example of a type of cultural organization that underscores “existing in silence and appreciating the art” – classical music organizations. I’ve told this story once, but it is worth repeating: I was with the IMPACTS team in a meeting with Stanford University discussing the engagement of students and community members alike in classical music. The group began discussing opportunities around “shaking up” the way that audiences experience classical music, and the merits of making the concert-going experience more “social.” One of the University’s leaders suddenly exclaimed, “It’s getting back to performing Handel in the same, social way that the music was experienced in Handel’s time!”

We all stopped in our tracks. We thought being social in this environment was more of a new idea. Lifting the demand for silence at certain programs? Serving food (chewing while listening)? World-class musicians performing important, inspiring, and moving pieces while listeners mingle? Many might consider that sacrilegious!

In reality, the concept of orchestrating isolated cultural experiences in shared spaces is the relatively new idea. In Handel’s time, music was enjoyed socially – audiences ate, drank, and generally partook in all sorts of merriment while musicians filled the concert hall with beautiful melodies. Why is being social in shared spaces considered “new” when it was the very way that many types of art were originally intended to be enjoyed, discussed, and explored?

After all, dedicated listening to classical music only accounts for 20.9% of all classical music listening activity – and the behavior doesn’t vary as dramatically between students (i.e. “young people”) and non-students as some might suspect. Some organizations may choose to focus their programmatic offerings to try to fit into that 20.9% of their audiences’ dedicated listening time…but why not create programs to include the other 79.1%?

The data below represent the classical music listening behaviors of 915 undergraduate students, and 2,115 non-student adults living in the San Francisco Bay Designated Market Area. The commonality of behavior is particularly interesting as students and non-students alike spend approximately 80% of their time listening to classical music while also doing something else.

IMPACTS - dedicated listening behaviors

These data are particularly interesting because they indicate self-selected cultural behaviors. Classical music listeners – arguably among the most “traditional” of contemporary cultural participants – report that only about 1/3 of their time spent engaging with content is experienced in a state of solitude (e.g. dedicated listening or while reading). The balance of their engagement invites connection and a public context – while traveling, while dining, while cooking, while exercising. For the vast majority of time for its listeners, classical music accompanies another activity or supports a social context…it is not a dedicated activity.

Yet, too many organizations that present classical music create environments focused solely on dedicated listening, and, indeed, actively dissuade a social context. And these organizations are not alone – there seems to exist a false dogma in some organizations that dedicated, solitary experiences are the preferred way to engage with a cultural experience. The data suggest otherwise. The fact that the earliest art museums may have started as private collections viewable only to those close to the collector further highlights the importance of social connection. Viewing these collections required a connection to another person. Perhaps the audiences of Handel’s time had it right – culture may be a component of a greater, social experience.

Not convinced of the power of social interactions in cultural organizations? Consider: Data suggest that who people are with is more important than what they see at an organization, and social interactions significantly increase visitor satisfaction.

 

2) Traditional media for marketing purposes is new (Securing earned endorsement from visitors is old)

The concept of embracing digital engagement feels like a big change…so much so that non-marketing staff members seem to be “not my job-ing” it in many institutions. But let’s look past the relatively new creations of Facebook and Twitter and Instagram and consider what these digital platforms actually do and why they are so influential: They allow for the increased potential to connect people and share messages.

The advent of digital engagement platforms did not create a new phenomenon – it provided a way to more effectively tap into the motivators of human behavior that have always been there. Earned media and reviews from trusted resources (like those that take place on digital platforms) drive visitation to cultural organizations. Again, this model of diffusion isn’t new – it’s how reputations have always been earned and promulgated. After all, how else could museums secure attendance before the development of radio and television advertising? (That’s a trick question. Access to collections of artwork in particular was often a matter of connections to the people running the collections, which again leads us to the importance of word of mouth endorsement. There likely wouldn’t have been ads for these particular types of institutions before they were more broadly accessible.)

IMPACTS model of diffusion

Regular readers know that I love this data. Note that what people say about your organization (the coefficient of imitation (Q)) is 12.85 times more important in determining reputation than what you pay to say about yourself (the coefficient of innovation (P)) – And reputation is a driver of visitation to cultural organizations.

Spinach is to Popeye as social media is to word of mouth endorsement. Here. Allow me to take this metaphor too far:

Popeye earned media

Social media is about engaging people. It is not about computers or cells phones. In the cartoon above, think of computers (or “technology”) as the can. It’s not the can that makes Popeye strong. It’s the connectivity potential of what is in it. In a 1800s version of this cartoon, the can would be a marketplace and the spinach would be a friend communicating a face-to-face recommendation to attend a cultural event. Indeed, that same spinach is still just as good today, but that spinach has never been “traditional media.” Comparatively, “traditional media” as a motivator is a new concept – and it plays a different role in motivating visitation.

 

3) Focusing on the past is new (Innovation and informing future discoveries is old)

Being innovative often gets a bad rep as being risky more than being necessary for cultural organizations, and the task of being relevant may be beginning to sound like jargon. But cultural organizations have always been equally about the future as they are about the past. The goals of inspiring wonder and curiosity are equally beholden to history as they are to a hopeful future. Thinking that cultural organizations are more about the past than the future or the present is a new idea…and maybe that’s why we can’t seem to shake that “boring” stereotype.

Many of the world’s early museums were cabinets of curiosities. These cabinets of curiosities were collections that often consisted of artifacts and also new discoveries – or curious objects with histories yet to be uncovered and stories yet to be told. There was an element of these collections that was current and thus real-time relevant. Instead of simply “teaching” folks about things that we already knew, they were often collections focused on what we were finding out. Think of it as perhaps collecting puzzle pieces to inform the world in which we live. I think that cultural organizations might struggle less with relevance if we thought of ourselves as providers of clues and summoners of curiosity…and less like archaic teachers.

Even today, what seems to be picked up and discussed most regarding museums is how they impact our future knowledge. When we can bridge the gap and demonstrate how the past may inform the future (or the present), that’s when we are most relevant. That’s common sense and it’s not new. It’s not an “innovative” concept. We were once encyclopedic collections of things that made folks feel like discoverers and knowledge collectors…not places that made folks feel like they were being “informed.”

I think focusing on the past (as opposed to how the past connects to the present) is dangerous. I think that’s what is holding us back and may be providing an excuse for some institutions to be lazy, and to even complain about the need to be relevant. Why would any cultural organization complain about the need to be relevant?!

Relevance, connective experiences, and operating based upon earned endorsements are among the oldest attributes of cultural organizations – and that’s great news! It means that we can give them a little bit less strength as overwhelming forces.

It means we’ve totally got this.

 

Like this post? Here are a few related posts from Know Your Own Bone that you might also enjoy:

 

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

Posted on by Colleen Dilenschneider in Community Engagement, Digital Connectivity, IMPACTS Data, Myth Busting, Nonprofit Marketing, Sector Evolution, Trends Leave a comment

The Hidden Value of Millennial Visitors to Cultural Organizations (DATA)

Data suggest that millennial visitors possess three behavioral characteristics that make them cultural organizations’ most valuable audiences.

Okay, okay. You’re sick of talking about the importance of reaching millennial audiences…even though industry data suggest that cultural organizations are not attracting these audiences at the rate that we should be AND millennials are not “growing into” caring about arts and culture. But let’s put all that aside for a moment…

This week’s KYOB Fast Facts video covers three behavioral characteristics that data suggest make millennials particularly important audiences. I’ve written about them before with the data cut a bit differently.

Take a look at these findings from IMPACTS that compares three behavioral characteristics of Baby Boomers (born 1946-1964), Generation X (born 1965- 1979) and millennials (born 1980-2000) who profile as high-propensity visitors to cultural organizations (i.e. museums, performing arts organizations, aquariums, historic sites, etc.). That is, they demonstrate the demographic, psychographic, and behavioral characteristics that indicate an increased likelihood of visiting a cultural organization. Like much of the data that I am able to share here on KYOB, it comes from the ongoing National Attitudes, Awareness, and Usage Study.

High Propensity Visitor Indicators -Millennials

Let’s briefly go over these findings one-by-one:

1) Millennial visitors are most likely to come back within the year

Millennials are revisiting more often than other generations. In fact, millennials make up the majority of visits to cultural organizations because they are revisiting these types of organizations. And this is awesome! It means that attracting millennial audiences gives us bang for our audience acquisition buck. In fact, with index values under 100 for both Baby Boomers and members of Generation X, non-millennials are actually unlikely to revisit a cultural organization within one year.

Coming back is important because it helps these audiences grow potentially longer-lasting relationships with these institutions. Why focus on attracting cultural center-loving individuals who are likely to pay a single visit to a cultural organization when there’s a whole host of cultural center-loving millennials that are likely to visit more than once?

 

2) Millennial visitors are most likely to recommend a visit to a friend

Sometimes our reputation for having big mouths pay off! Millennial visitors are more likely than Baby Boomers or members of Generation X to recommend a visit to a friend when they have a good experience. This means that not only are millennial audiences most likely to revisit a cultural organization within a one-year duration, but they are also most likely to tell others to do the same. Talk about payoff!

 

3) Millennial visitors are the most connected visitors

This is important: All high-propensity visitors to cultural organizations profile as being “super-connected.” That is, they have access to the web at home, at work, and on mobile devices. Though the web plays a big role in the connectivity of millennials, it is undeniably critical for Baby Boomers and members of Generation X as well (as evidenced by index values coming in at over 100 for all three groups). If you work for a cultural organization and you are trying to get people in the door, data suggest that the web is insanely important in order to effectively attract any demographic. Got it? Good. I’ll move on…

It’s great that millennials are most likely to come back and also to tell their friends to pay a cultural organization a visit…but they are also the most connected audiences among the three generational cohorts – by a long shot. The constant connectivity of millennials means that this audience shares messages with their friends and family (likely also high-propensity visitors) with a reach that’s a bit like traditional media on steroids.

 

When you put all of this together, the case for prioritizing millennial engagement is rather compelling. While a Baby Boomer may visit once per year and not necessarily recommend their experience to a friend, millennial visitors are more likely to come back and tell LOTS of their friends to do the same. Millennials may be the best connectors to other millennials – and perhaps simply to other people in general.

When data are considered, the task of reaching millennials may even seem less like a burden and more like an opportunity. (Too much? Okay. I won’t push you. I’ll just encourage you to scroll back up to the chart and let the data do the talking.)

 

Like this post? You can check out more Fast Fact videos on my YouTube channel. Here are a few related posts from Know Your Own Bone that you might also enjoy:

 

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

Posted on by Colleen Dilenschneider in Community Engagement, Digital Connectivity, Fast Facts Video, Financial Solvency, IMPACTS Data, Millennials, Myth Busting, Nonprofit Marketing, Sector Evolution, Trends Leave a comment

Nonprofit Recognition: What Matters More To Visitors Than Your Tax Status (DATA)

Do visitors know that museums  and other cultural organizations are nonprofits? Data says: Nope. Here’s what really matters to audiences about your organization.

This week’s Fast Facts video covers a big misconception that folks working within cultural organizations (often unknowingly) promulgate: That being a nonprofit is a key differentiating factor to their audiences. As it turns out, data suggest that your organization’s tax status is relatively unknown among visitors and non-visitors alike.

This video explores the data. Not a video person? (That’s cool. You do you.) Here’s what you need to know:

 

1) The majority of people in the US do NOT think cultural organizations are nonprofits

Check out this data from IMPACTS that uncovers the percentage of the US adult population that believes that cultural organizations such as museums (e.g. art, science, history), zoos, performing arts centers, botanic gardens, and aquariums are nonprofit organizations. Like much of the non-proprietary data that I am able to share on Know Your Own Bone, the findings informing this analysis come from the ongoing National Awareness, Attitudes, and Usage Study of 98,000 adults (and counting).

KYOB- Nonprofit recognition data

The findings may be a tad alarming to some. I’ve personally heard the “but we’re a nonprofit” excuse for not keeping up with financial realities (among other things) more times that I can count. This data flips the popular excuse for lack of evolution on its head. Not only are most non-visitors to these institutions not aware that cultural organizations are nonprofit organizations, but over half of the people who do visit these types of organizations are unaware that they are nonprofit organizations.

Take a look at history museums, for instance. Only 47.2% of visitors to history museums know that they are nonprofit organizations. The other 52.8% of visitors (over half) are unaware that they are reliant on philanthropic support: They believe that the organizations are for-profit entities, or government-funded operations that are otherwise provided for by their taxes.

Regardless of the reason for the misperceptions, more than half of visitors to ALL cultural organizations do not believe that they play any role in keeping these organizations healthy or alive after walking in the door. Beyond paying admission (to what they consider a business) or paying their taxes (to an organization with free admission because their taxes fund a government-operated entity), the majority of visitors risk believing that there is no further need for their support.

 

2) The market is sector agnostic

The misconception that these types of cultural organizations do not need support as nonprofit organizations is a problem – but how big of a problem? We’ve created a situation wherein people think admission to cultural organizations is largely either a pre-paid entitlement (thanks to taxes), or a fee paid to a for-profit company. Admission to most cultural organizations are neither of these things.

Tied to the misconceptions regarding the need to support cultural organizations is another market-based truth: Today’s audiences are generally sector agnostic. This means that they don’t much care about an organization’s tax status. They care about how well your company or organization does what it claims to be expert at doing. Loyal Know Your Own Bone readers (you guys rock) know that I’ve shared this nonprofit recognition data before in a post about how, today, for-profit and nonprofit organizations compete against one another. At IMPACTS, we continue to find evidence supporting this fact nearly every day.

Let’s be honest: Market confusion makes sense in the case of many nonprofit, visitor-serving organizations. We’re nonprofit, but our operations often follow a traditional economic utility curve. In other words, unlike giving to a charity that supports the homeless, people are “paying” for the personal experience of visiting our organizations. But unlike SeaWorld (for instance), those revenues cycle exclusively back into our social missions to educate and inspire…because that’s what 501(c)3 organizations do. And that brings up another potential point of confusion: Disney World, SeaWorld, and Universal Studios are for-profit companies – and SeaWorld hits the “we’re mission-driven” button hard (or rather, it tries to). It makes sense that the market might give up on differentiating visitor-serving nonprofits from for-profits! And until recently, most nonprofit, visitor-serving organizations were marketing themselves primarily as attractions – NOT mission driven organizations. Some laggard nonprofit visitor-serving organizations still do…

 

3) The tax status of cultural organizations is not their differentiating factor

So far this is looking bad. Our audiences largely don’t know that we rely on their support in order to stay alive and they are sector agnostic so they, in a sense, don’t even care that we are nonprofit. So what do our audiences care about? How well we carry out our missions.

But nonprofits don’t “own” social good, and that’s a big reason for evidence of the market’s sector agnosticism. Corporate social responsibility is a necessity for companies today. There are countless articles on the importance of for-profit companies “doing good.” It is a key tactic for gaining more customers. And that’s interesting because there are still some cultural organizations that do this weird, outdated thing where they try to overlook their social advantage and exclusively promulgate “visit us today!” messages (and even offer discounts that devalue their brand and cause even more sector confusion for cultural organizations). It’s like some of them are trying to be like Disney World…

Being good at your mission is good business. Data demonstrate that organizations highlighting their missions outperform organizations marketing primarily as attractions. Perhaps, in all of our “But we are a nonprofit” excuse making, we missed the true differentiator that has provided us that tax status in the first place: Our bottom line of making a difference.

Our key differentiator is not our tax status, but that our dedication to making a difference is embedded in the very structure of how we operate. There’s a thought that we need to run “more like for-profit companies” (and in some ways we do, but the blanket directive is an ignorant miss). But look around. For-profit companies are actually trying to be more like us in the sense that they want audiences to know that they stand for something that makes the world a better place.

 

4) Communicating nonprofit status is critical in order to make the case for support (but it is a secondary communications goal)

When people don’t know that we are nonprofit organizations, it is a lot more difficult to secure members and donors. For that reason, we do need to better communicate our need for support. But perhaps before we ask for support, we need to do a better job showing the world what supporting us means. In other words, the lack of knowledge about our need for support may be indicative of a long-term communication and programmatic failure.

We educate. We inspire. We connect. We conserve. We teach. We change the world, one mind at a time. But perhaps the misconception about the need for support stems from our own communications focused not around how we change the world, but how we don’t change the world: “Visit!” “Discount!” “New exhibit!” Those messages are important, but are they most important? After all, can we blame the market for not knowing that we are nonprofit organizations if we bury the missions and ideals that are the foundation for our existence in more commercial messages and programs?

 

Fewer than half of U.S. audiences are aware of the nonprofit status of cultural organizations. That’s a big deal, because it makes it harder to secure support. But it’s also a good reminder that audiences are increasingly sector-agnostic, and our competitive advantage may not be our tax status, but what our tax status means: That we are here to change the world.

 

Like this post? Here are a few related posts from Know Your Own Bone that you might also enjoy:

 

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

Posted on by Colleen Dilenschneider in Community Engagement, Fast Facts Video, Financial Solvency, Fundraising, Myth Busting, Nonprofit Marketing, Sector Evolution, Trends Leave a comment

Real Talk: Why Cultural Organizations Must Better Engage Millennials (DATA)

Why Cultural Organizations Must Better Engage Millennials (Know Your Own Bone)

Millennials are cultural organizations’ most frequent and loyal visitors…but this audience remains underserved.  Here’s why that’s a big problem for the future well-being of the industry.

“We need to be better at engaging millennials!” You’ve heard this before. Likely, you’ve heard it more times than you can count. Even if you are a millennial working within a cultural institution, you’re still probably sick of the sentiment. You’re probably sick of it even if you know that data suggest that millennial audiences are cultural centers’ best audiences.

The need for cultural organizations (e.g. museums, zoos, aquariums, symphonies, theaters, botanic gardens, orchestras, etc.) to reach millennial audiences is deeper and more complicated than we may realize.

I’d like to ask you a favor.

Indeed, I’m going to land here at the end of this post: “We need to be better at engaging millennials.” Instead of closing this tab before you dig in and saying, “yeah, yeah, yeah…” I hope that you’ll stop and consider why we need to reach millennial audiences…why it’s a big deal, what it means for our solvency, and why its so hard for some of our executive leaders to do.

Here are four things that all cultural organizations should know about millennial visitors and our efforts to engage them:

 

1) Millennials are the most frequent attendees to cultural organizations

 

Bet some of you didn’t see that coming! Check out this data from the National Awareness, Attitudes, and Usage Study that represents a sample population of more than 98,000 respondents. These particular data compare millennial and Baby Boomer visitors in terms of the composition of attendance to the 224 visitor-serving cultural organizations contemplated in the study during the past five years

IMPACTS- Millennial vs Boomer visitation 

Millennials make up the largest share of visitors to cultural organizations and the observed trend indicates growing percentages year over year. Millennials aren’t coming. Millennials are here and they are already the largest realized audience visiting cultural organizations. This means that the “We need to cultivate millennials while satisfying our current, baby boomer audience” sentence is baseless. And you want it to be baseless. If baby boomers still actually make up the majority of your visitors, then you’re behind. 

This means that programs and initiatives that engage millennials should be in full force right now and integrated into operations. Programs that engage millennials should be recognized as your new way of life. And, please, don’t worry too much about engaging, interactive, authentic, trustworthy, dynamic, participatory, expert, real-time programs alienating members of Generation X and some Baby Boomers. The market at large increasingly has these things ingrained into how they evaluate brands and organizations as well.

Don’t forget that the “white space” here isn’t simply Generation X. It also includes Traditionalists (the generation before the Baby Boomers) and Generation Z (the generation after Generation X). And thank goodness that millennials are the most frequent visitors to cultural organizations! Millennials represent the largest generation in human history, so if they weren’t attending organizations more than their other, large-generation (Baby Boomer) buddies, it would be a huge problem. Cultural organizations as a whole engaging anything smaller than the data-informed expectation for audience engagement relative to their cohort size is very bad news…

 

2) But millennials remain underserved as organizations underperform the business opportunity 

 

…See, but that’s the problem: Millennials ARE NOT attending at the minimum expected levels. To evaluate this, we need to step back and look at visitation to our organizations in the context of the US population. In 2015, there were 322 million people in the United States. Adult baby boomers made up 23.6% of the U.S. population and adult millennials made up 27.1% of the U.S. population.

IMPACTS- Millennials are underserved

According to the National Awareness, Attitudes, and Usage Study, only 21.9% of adult millennials visited a cultural organization in 2015. To be merely representative, 27.1% of visitation should be adult millennials. The simple fact of the matter is that cultural organizations are underserving millennials when compared to the U.S. population. (“Underserved” means that participation – be it attendance, enrollment, etc. is less than the representative population.) In other words, cultural organizations are underserving millennial audiences by a factor of 19%.

To those of you thinking, “Yeah! But at least we’re getting them!” …I like you, because you are a glass-is-half-full person…but maybe it’s time to strap on your thinking cap a little tighter. Serving representative audiences is one of the top grantmaking considerations for many audience engagement initiatives that are seeking support. Not only that, underperforming the opportunity by 19% with this particular audience puts us in a doubly bad place because of this generation’s attributes and its word-of-mouth-informed visitation cycles.

 

3) Millennials are the most loyal audiences with the highest lifetime value

 

According to the National Awareness, Attitudes, and Usage Study, 23.8% of boomers said they visited a cultural organization (any cultural organization) in 2015. But Boomers only comprise 22.5% of cultural attendance. Meanwhile, only 21.9% of adult millennials visited a cultural organization, but they comprise 30.9% of total US cultural visitation. What does this mean? Millenials are far more likely to revisit within the year than other generations. They are the most loyal. It proves that millennial “intent to visit” is manifesting itself as actual visits.

IMPACTS- Millennial visitation loyalty

Combine this good news data with the bad news data on how much we are underserving millennial audiences, though, and the picture isn’t a pretty one: For every one millennial that we fail to engage as a sector, we miss out on 1.411 visits to cultural organizations.

If 30% of cultural visitors are millennials, are 30% of organizations’ resources allocated to engaging them? Probably not. We should be representatively engaging this audience because, well, that makes cut-and-dry business sense. Our missions may depend on it.

This is a big deal! Any organization that continues to underserve its best, most frequent, and most loyal customers – that also make up the majority of the country’s population – in the way that cultural organizations are doing risks going out of business. 

 

4) Why this change may be understandably hard for Baby Boomers in cultural organizations

 

Boomers know better than anyone that not all audiences are created equal. They know that because they’ve been by far the most valuable audience for a very long time.

Why is it so hard for Baby Boomers to grasp the necessity of engaging millennials and do more than talk about this audience in conference rooms? Why do they say, “We need to engage millennials,” only to move forward with frozen mindsets?

I’m no psychologist here and I may be going out on a limb, but I work predominantly with Baby Boomers that I have the honor of seeing in action every day, so I’ll give this an outsider shot: Baby Boomers may still think of themselves as primary target audiences (despite data indicating otherwise) because they were trained to think of themselves that way. They’ve have been the apple of every marketer’s eye for decades. For at least 25 years, the Baby Boomers that succeeded most were the ones who were best at marketing and creating programs for themselves. They were trained to successfully engage themselves and they were rewarded for successfully engaging themselves. Most boomers were appropriately predisposed and actively incentivized to reaffirm their generation’s own importance. Thus, it would make sense that there would be a want for boomers to keep doing what they do best: creating programs for themselves. That’s where they’re expert- and being expert at targeting Baby Boomers is why they are successful.

Basically, this same issue is likely to arise with us millennials if a large generation steps up to the plate in our own future. (And when it does, will one of you kindly forward this post to me from your 4D interactive teleportation wrist watch thingy to remind me that I knew it would be equally difficult for us to pass the baton?)

And things get even more difficult yet for Boomers. They may have imagined that they’d pass the baton in more conventional, chronologically successive terms to Generation X. Instead, they need to make a symbolically bigger leap and pass it (largely) to Millennials. It’s got to be hard to (kind of) skip a generation. Certainly, there’d be a conceptual belief that Traditionalists might pass an equal amount of influence to Boomers, who might pass an equal amount of influence to Generation X, who might pass an equal amount of influence to Generation Y…but data doesn’t demonstrate that that’s a smart move.

(Generation X, the always-impossibly-cool-in-my-mind, autonomous, and unlucky generation sandwiched between large and needy millennials and baby boomers, is roughly half the size of Generation Y. So if Generation X and Generation Y combined to form Generation XY, millennials would compose nearly 2/3 of that generation. This is also makes Generation X an often untapped resource to help bridge the generation gap because they seem to see all the crazy that’s above them and that’s below them with clarity in some cases. But I digress…)

 

 

All organizations have finite resources. In today’s world of hyper-targeting, every dollar we spend chasing one demographic is a dollar that we cannot spend chasing another demographic. The data is clear that cultural organizations are underserving millennial audiences. On top of that, millennials are our audiences with the greatest likelihood of re-visitation. Now, I don’t know if we’re the best audiences for post-it notes or patio furniture or tea pots – but millennials (which obviously include the 44.2% of us that are from “minority race” backgrounds) are definitely the most critical audience for cultural organizations to engage right now.

This does NOT mean that Baby Boomers and Generation X are not important targets. But it does mean that the percentage of energy, effort, and investment should be allocated representatively to the percentage of each age cohort’s market potential. Three factors should influence how your organization prioritizes its investments and dedicates its energy: 1) the size of the cohort; 2) the buying power of cohort; and 3) the cohort’s propensities to participate. Millennials represent the largest opportunity on all three fronts and, thus, create a compelling case for where to allocate representatively significant investments of resources.

I’ll end where I promised, but I hope that the sentence carries more meaning and understanding than it did at your last staff meeting: We need to get better at engaging millennials.

 

Like this post? Here are a few related posts from Know Your Own Bone that you might also enjoy:

 

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

Posted on by Colleen Dilenschneider in Community Engagement, Financial Solvency, IMPACTS Data, Millennials, Myth Busting, Nonprofit Marketing, Sector Evolution, Trends Leave a comment

How Much Money Should Your Cultural Nonprofit Invest in Getting People in The Door? (DATA)

Here’s how much money museums and cultural organizations should be spending to get people in the door – according to data.  

My post on optimal audience acquisition costs made its way onto the list of the top-ten most popular Know Your Own Bone posts of 2015. And I’m glad it did. It’s an important one. So to really hit it home, I’ve summarized the findings in a KYOB Fast Facts video here.

Let’s revisit the data in order to share some additional information on this audience acquisition equation:

Marketing budgets seem to be an unnecessarily emotional topic for many nonprofit organizations. Optimizing marketing investments – like determining admission price– is increasingly a product of math and science (read: decidedly not “intuition” or “trial and error”). They need not be based on fuzzy-feelings and inappropriate loyalties to failing business models that ignore the realities of the outside world.

We live in a pay-to-play world where organizations have to spend money to make money. When it comes to budgeting for audience acquisition costs, many organizations seem to have fallen into that familiar trap of “last year plus 5%” that lazily assumes the continued efficacy of the same old platforms and strategies. Of course, such a strategy completely ignores shifting advertising cost factors, evolving platforms and channels, and technological innovation. Say it aloud: Nonprofits do not operate in a vacuum and cannot afford to ignore the changed economies and technologies of the world around them.

Several organizations that have made this realization have asked IMPACTS if there is an equation to inform their audience acquisition costs so as to maximize their opportunities for financial success. And, the findings of a three-year study suggest: Yes, there most certainly is!

 

Determining audience acquisition investment

Let’s first establish a few definitions and “same page” this conversation:

Audience acquisition costs are the investments that an organization makes in advertising, public relations, social media, community relations…basically, anything and everything intended to engage your audiences. (It does not include staff costs unless an organization has internalized the media planning and PR functions that would ordinarily be accounted for within the agency fees line item.)

Market potential is a data-based, modeled outcome that indicates an organization’s potential engagement with its audiences. For most organizations, “market potential” primarily concerns onsite visitation. In other words, it answers the question, “If everything goes well, how many people can we reasonably expect to visit us this year? (NOTE: Market potential may not match an organization’s historic attendance – organizations underperform their market potential all the time…for reasons that we’ll soon explore.)

Earned revenues are the product of admissions, memberships, merchandising, food and beverage, facility rentals…basically, all revenues attendant to the onsite experience that are supported by audience acquisition investments. These revenues exclude annual fund, grants, endowment distributions and other sorts of philanthropy.

Here’s the equation to maximize your market potential as suggested by the recently completed three-year study:

IMPACTS audience acquisition equation

Expressed another way: Optimal Audience Acquisition Costs = 12.5% of Earned Revenues. For example, if your organization generates annual earned revenues of $20 million, then this would suggest an annual audience acquisition investment of $2.5 million.

Further, additional analysis would suggest that 75% of the audience acquisition costs should be earmarked to support paid media (i.e. advertising). So, of the $2.5 million suggested above for audience acquisition, nearly $1.9 million should support paid media.  The remaining 25% (or, in this example, approximately $600,000) would support agency fees, public relations expenses, social media, community engagement – all of the programs and initiatives that round out an integrated marketing strategy. Forget to invest that 25% at your own peril. Earned media is critical for success and many social media channels are also becoming pay-to-play.

Why such a large percentage allocated to paid media? Again, ours is an increasingly pay-to-play world. Rising above the noise to engage our audiences frequently means investing to identify and target audience members with the propensity to act in our interest (e.g. visit our organizations, become members, etc.). There is tremendous competition for these same audience members  from the nonprofit and for-profit communities alike.  Think of the most admired and successful campaigns in the world – do Nike and Apple rely on 3am cable TV “bonus” spots that they get for a reduced rate and that don’t hit target audiences? Nope. While earned media plays a major role in driving reputation, paid media plays an important role in a cohesive strategy – and doing it right costs money.

This equation determines how much your marketing budget should be and how to allocate that optimal budget. If you have a marketing budget that is arbitrarily determined or based on “how we’ve always done it,” then you may be working with a budget that doesn’t allow you to maximize any investment.

 

The equation in action

How does the study suggest this equation? Check out the chart below. It indicates the relationship between performance relative to market potential (i.e. how well the organization actually performed when compared to its market potential) and the audience acquisition investments made by 42 visitor-serving organizations (including aquariums, museums, performing arts organizations, and zoos) over a three-year period:

IMPACTS - Audience Acquisition

The data strongly suggests that there is a correlation between an optimized audience acquisition investment and achieving market potential. It also indicates the perils of “underspending the opportunity” – a modest investment intended to achieve cost-savings may forfend exponential revenues. (Though the data never has – and likely never will – support it, many organizations seem to foolishly hold dear to the notion that they might somehow “save their way to prosperity.”)

Additional analysis indicates that the studied organizations invested an average of 7.9% of earned revenues toward audience acquisition…but only achieved 76.0% of their market potential. However, the organizations achieving ≥95.0% of their respective market potentials invested an average of 12.7% of their earned revenues toward audience acquisition.

In no instance did an organization investing less than 5.0% of earned revenues on audience acquisition achieve greater than 60.0% of its market potential.

Overall, the data suggests that the “sweet spot” for audience acquisition investment is in the 10.0-15.0% of earned revenue range. Splitting the difference (and further supported by the findings of organizations achieving ≥95.0% of their market potential in the study) gives us our 12.5%.

NOTE: Before we start parsing the nuances of media planning and creative approaches to advertising, let’s baseline the conversation by acknowledging that each of the studied organizations were led by competent persons operating with the best of intentions. Yes – “great creative” matters – but it doesn’t offset an inadequate marketing investment. Sure, a viral social campaign helps…but it doesn’t negate the importance of other media channels. In other words, there aren’t exemptions from the need to invest in audience acquisition for visitor-serving organizations that rely on earned revenues.

 

If your organization is struggling to meet its market potential, it may have less to do with all of the usual suspects such as parking, staff courtesy, special exhibits, pricing, etc. and more to do with an antiquated view of the necessity of meaningful marketing investments. Can your organization overspend? You bet. However, that doesn’t seem to be the problem confronting most visitor-serving nonprofit organizations. If your organization is struggling to meet its market potential, then it may be that in today’s pay-to-play world, you simply aren’t paying enough to play in the first place.

 

If you have questions, please check out the original posting of this information. Several folks have weighed in with great questions and I have provided answers there. Don’t see what you’re looking for? Please comment below or on the original post!

 

Like this video? You can check out more on my YouTube channel. Here are a few related posts from Know Your Own Bone that you might also enjoy:

 

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

Posted on by Colleen Dilenschneider in Community Engagement, Fast Facts Video, Financial Solvency, IMPACTS Data, Myth Busting, Nonprofit Marketing Leave a comment

The Membership Benefits That Millennials Want From Cultural Organizations (DATA)

Don’t have many millennial members? Maybe you aren’t offering a membership program that millennials actually want.

If millennials (folks born between 1980 and 2000) are the largest generation in human history, why don’t they make up a vast majority of members for cultural organizations? Today’s Know Your Own Bone – Fast Facts video dives into research about the kinds of membership benefits that this generation actually wants.

If you think that millennials just don’t want to be members to cultural organizations, then think again. IMPACTS data reveal that millennials report more interest in joining many cultural organizations as members than do their Generation X and Baby Boomer predecessors. Here’s the data (regarding zoos, aquariums, and museums in this case) courtesy of the National Awareness, Attitudes and Usage Study:

IMPACTS data- Membership interest by age cohort 2015

 

And it’s not just a “this year” thing. Interest in membership among millennials is actually on the rise. Notably, interest in memberships among Baby Boomers is on the decline.

 

IMPACTS generational membership interest multi-year

 

In terms of potentially engaging millennials as members, this is great news! But the findings would be even more promising if more organizations knew what it is that millennials want from a membership to a cultural organization. We looked into this question on behalf of a large (annual visitation >1million people) aquarium client with a conservation mission. We found that what millennials want from a membership is a tad different than what older generations want. Take a look:

 

IMPACTS data- Primary benefits of membership

Notice that, with the exception of free admission, the primary benefits of membership according to millennials are less transaction-based than are the responses from their preceding generations. Millennials care about “belonging,” “supporting,” and “impact.”

This information should inform how cultural organizations go about creating and marketing membership programs to these audience members. If we keep focusing on the benefits that millennials don’t actually value – and miss opportunities to highlight our mission impact – then it may be difficult to create long-term relationships with these young supporters. These responses from millennials may not come as a surprise. After all, in today’s world, your mission matters – and carrying out that mission is critical for an organization’s solvency. 

Want to attract millennial members? Make sure that you have the types of memberships that millennials value.

 

Like this video? You can check out more on my YouTube channel. Here are a few Fast Fact post that you might also enjoy:

 

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

Posted on by Colleen Dilenschneider in Community Engagement, Fast Facts Video, IMPACTS Data, Millennials, Myth Busting, Nonprofit Marketing, Sector Evolution, Trends Leave a comment
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