Audience Insights: Organizations Overlook the Most Important Clues

Clues for increased satisfaction and visitation are often right under the noses of cultural organizations. I frequently hear executive leaders Read more

Do Expansions Increase Long-Term Attendance? (DATA)

Sometimes it feels like nearly every cultural organization is taking on a major expansion project. But do these projects Read more

Over 60% of Recent Visitors Attended Cultural Organizations As Children (DATA)

You may have guessed it was true – but here’s why this statistic matters. The idea that those who visit Read more

Cultural Organizations: It Is Time To Get Real About Failures

Hey cultural organizations! Do you know what we don’t do often enough? Talk about our failures. It’s a huge, Read more

How Annual Timeframes Hurt Cultural Organizations

Some cultural executives still aim for short-term attendance spikes at the expense of long-term financial solvency – and they Read more

Special Exhibits vs. Permanent Collections (DATA)

Special exhibits don’t do what many cultural organizations think that they do. If fact, they often do the opposite. Read more

Community Engagement

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

Three Tips To Help Nonprofits Increase Success When Pursuing For-Profit Partnerships

Tips for for-profit partnership

Let’s stop telling companies that it’s their privilege to work with us for free – and, instead, show them why we are great partners.

I like to consider myself a double-agent. I work for a for-profit company, but I work with nonprofit visitor-serving organizations. I’m trained in nonprofit management – and I am kind of like this dog that was raised by cats and thus thinks he’s a cat. As I hang out on top of this fence, I can see both yards – and there seem to be a few nonprofit assumptions that don’t quite fit with things on the business side.

I get to see the “partnership pitch” from all angles. I work with nonprofits that make these pitches, and IMPACTS works with for-profit companies that get these pitches. Not a week goes by when IMPACTS itself isn’t approached with opportunities for partnership with amazing organizations. But the proposed partnerships in all of these situations often fall short because there isn’t much consideration of how these theoretical partnerships would work from the not-nonprofit side. In order to increase chances of success, nonprofits must consider the perspective of the person at the other end of the phone or email account to whom they are “pitching” the partnership.

Perhaps you’re looking for a for-profit partner to provide food, consulting services, or even to make a donation. Here are three things for nonprofit organizations to keep in mind that will help increase the chances of success when approaching a potential for-profit partner:

 

1) Consider what is in it for the potential partnering company

This sound obvious, but it very rarely happens. Usually, when a nonprofit organization is asking a company to “partner,” it is code for “I’d like you to do something for free or at a very reduced cost.” There are very few companies with the mission to make a nonprofit successful, so creating a true partnership relies on the nonprofit communicating why this relationship is beneficial to the company. It means speaking their language and articulating how this partnership is not only going to support your mission (this part is usually obvious), but how it is going to help the company succeed.

It is helpful to articulate how the partnership may enhance a company’s profitability – but be careful about what you think benefits of your partnership may be. As a heads up: Successful companies probably aren’t relying on you to market them. Thus, “We’ll market for you!” can be a nice bonus, but it’s a total misread as a driving benefit worthy of partnership on its own merits. Nonprofits often struggle to prioritize marketing investments – but smart for-profit organizations (like the one with which you’re probably seeking to pursue a partnership) generally do not. For what organizations ask a company to invest in the way of sponsorship, a company could likely otherwise achieve a much more effective marketing outcome. The primary benefit of a partnership to the company must be articulated, and indeed, it usually involves connecting the brands. But the primary benefit usually isn’t about the organization doing marketing, it’s about what that partnership means. That meaning is worth directly articulating.

One reliable benefit of a partnership is that it may lend credibility to a company in a specific space or contribute to a corporate social responsibility platform. If there’s mutual benefit, then it’s a partnership. Otherwise, it’s pure philanthropy or the company is a vendor and you should pay them. Organizations may benefit by taking a moment to think through their proposed benefits so that they may speak the same language as the company when pitching a partnership and more directly articulate some of the great benefits that they can bring to the table.

 

2) What is in it for the company is usually not your mission alone

It’s not enough to simply have a social mission – all companies and organizations seem to have social missions today. And the market is generally sector-agnostic – meaning that they don’t care much whether an organization is for-profit or nonprofit as long as it demonstrates impact.

Moreover, nonprofits are not super good and for-profit companies are not super evil – so approaching outbound communications with this mindset isn’t very helpful. In fact, in my experience, the thought that companies are innately morally inferior to nonprofits resides much more in the nonprofit world than from the for-profit world – and that may be a product of today’s more transparent, social-good centric society.

Not every nonprofit is a good partner, and those that are good partners aren’t necessarily good fits for partnership. Like organizations, companies choose which partnerships they want to form – and having a social mission doesn’t make any organization an automatic fit. For example, if a company wants to support informal learning and that’s what you do, then an organization must be prepared to communicate impacts and demonstrate why that investment is best made in your organization. The company may be your dream partner – but is your organization similarly a dream partner for this company? Even if a company believes in your mission, they may still choose to support an organization that serves the same mission, but may be a better fit for partnership.

“Partner with us because it’s the right thing to do,” is not usually a persuasive primary reason for partnership. Again, that’s philanthropy. Similarly, I’ve seen many emails wherein organizations write something that seems to be saying, “We are X organization! It’s really in your best interest to work with us. Everyone knows we are great!” But it often doesn’t occur to this organization that sometimes your brand isn’t enough, and there’s benefit in being tied to your impact. Impact can be a huge differentiator. 

 

3) Decide to REALLY be a good partner

Especially for cultural organizations, the problem starts here: Many are still elitist organizations. Many museums and cultural centers were founded by wealthy benefactors and seem to operate a bit like elitist social clubs. There are millions of dollars of art hung on the walls of some of these institutions and it’s not unusual for even frontline staff at some cultural organizations to have master’s degrees. We work in important, symbolic buildings, and we work for the good of the people – even though data suggest that we still have real trouble engaging diverse audiences and some popular programs intended to reach these people actually make the issue worse. (I just got real there, but I’m trying to make a point.) Nonprofits often approach companies as if it is a privilege to partner with the organization. The reality is that some of us have a view of ourselves that doesn’t conform to today’s economies or the current social condition – and this view seems to often come out when approaching a potential partner in order to obtain goods or services.

Nonprofits do amazing things – but when we call a not-partnership a partnership (even politely), we look kind of out-of-touch. Instead of going into the conversation assuming that we are worthy of any partnership because of “who we are,” organizations may have more success by pausing to realize that we are approaching this for-profit company because of who they are, too. Partners are equals.

 

Nonprofits and for-profits love the word “partnership.” (And why shouldn’t we? It’s an important word and concept.) However, many organizations don’t practice what they preach. If we considered that word, we wouldn’t say some of the things we say. We wouldn’t shamelessly ask for services and act like the business on the other end should give us what we want for free or reduced price just because we say we care about something. We wouldn’t say the word so much because we’d realize that sometimes we’re not asking for a partnership at all. We’re asking for a handout.

Nonprofits can be excellent partners that bring credibility and respect to for-profit companies. However, a precedent to partnership must be a willingness to consider the mutual benefits of the relationship and a critical analysis of our own capabilities. Most of all, our actions need to trump our words – instead of telling companies how awesome we are, let’s show them.

 

Like this post? Don’t forget to check out 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, Financial Solvency, Myth Busting, Sector Evolution, Trends Comments Off on Three Tips To Help Nonprofits Increase Success When Pursuing For-Profit Partnerships

Which Is More Important for Cultural Organizations: Being Educational or Being Entertaining? (DATA)

From a visitor’s perspective, which is more important for cultural organizations: Being entertaining or being educational? Here’s what the data says.

This week’s Fast Facts video briefly outlines a data-informed aspect of the “Entertainment vs. Education” debate.

There seems to be an ongoing tension within organizations regarding the relationship between providing an entertaining experience and an educational experience for visitors. All too often, we seem to act as though the two forces are at-odds with one another.

Sometimes, the entertainment value of a visit to a cultural organization gets an internal bad rap. After all, cultural organizations are mission-driven and one of their goals is often to educate. “Entertaining” occasionally seems to be a sort of dirty word – much like considering visitors as “customers” and the idea of “selling” admission. They are concepts/words that might make some staffers uncomfortable. In the best interests of the organizations that we love, however, we need to at least embrace these ideas or risk less solvent futures.

The truth is that providing education and entertainment are both important to our visitors – and knowing exactly how these elements contribute to the visitor experience may help inform future strategies and conversations. So, let’s take a look at some data from a visitor perspective and get to the bottom of this relationship.

 

1) Entertainment drives visitor satisfaction and re-visitation

To tackle the question regarding the importance of entertainment versus education, let’s start by considering the data that goes into developing a visitor satisfaction metric.

Individual evaluation criteria – such as entertainment and education values – aren’t weighted equally because the market is not influenced by them equally. Many organizations aiming to achieve higher overall satisfaction measures mistakenly believe that every aspect of a visitor’s experience is equally important – and that’s just not true. To visitors, some criteria (such as employee courtesy) have more weight than others (such as the quality of the gift shop). With that in mind, here’s a look at some of the weighted attributes that influence overall satisfaction – informed by the market and IMPACTS Research. (These data derive from the National Awareness, Attitudes & Usage Study of more than 98,000 US adults concerning visitor-serving organizations.)

IMPACTS Overall satisfaction weight

Yes, folks. This is indeed a data-informed chart of exactly how much each aspect of the visitor experience contributes to overall satisfaction when visiting a cultural organization such as a museum, zoo, aquarium, historic site, performing arts event, etc.

Entertainment experience is the single greatest contributor to overall satisfaction. Education value influences only about 5% of overall satisfaction, whereas entertainment value influences more than 20% of overall satisfaction. Favorability is the visitor’s perception of how “likeable” the organization and its experiences are – and the entertainment quotient of the experience contributes even more to overall satisfaction than does favorability. That’s saying something.

The fact that entertainment value drives visitor satisfaction is cut-and-dry and non-negotiable. And any company or organization telling you otherwise is likely paid by an entity that really, really doesn’t want to evolve. Providing an entertaining experience is absolutely critical for visitor satisfaction, and, thus, return visitation. In short, cultural organizations need to be at least somewhat entertaining in order to stay alive.

 

2) Education justifies visitation

It’s clear that providing an entertaining experience is more important for satisfying visitors – but education isn’t chopped liver. Data suggest that being educational plays a critical role in justifying a visit to a cultural organization after the visit is over.

Take a look at this data from IMPACTS (again, from the National Awareness, Attitudes & Usage Study):

IMPACTS Primary visit purpose

Learning something new and different, seeing something new and different, and wanting a child to learn something new and different are the top three stated responses regarding the primary purpose of a visit after that visit is over. This is a big deal, because it means that while the educational aspect of an organization’s mission may not necessarily bear extraordinary influence on how satisfied a visitor is during their onsite visit, it is thereafter recalled as a primary factor motivating the visit – and this is good news! It helps to reinforce the purpose of cultural organizations externally, underscoring our drive for social good. (And this has financial benefits, too. Organizations that highlight their mission financially outperform those marketing primarily as attractions!)

 

In sum, entertainment value makes a visit satisfying but education value helps justifies a visit. Successful organizations aim to make education entertaining. It’s not a battle, but a balancing act wherein fun and learning work hand-in-hand to make both visitors and the organization better.

I could have guessed that,” many of you may be saying. Well, that’s good. Now when we enter conversations from either the mission or revenue angle, we can be a bit more informed by visitor-driven, industry-wide data. There may be some hard facts to face here, but they are important: We need to prioritize being both educating and educational – and quit thinking of “entertainment” as a dirty word.

 

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, Fast Facts Video, Financial Solvency, IMPACTS Data, Myth Busting, Sector Evolution, Trends 3 Comments

The Expensive Misconceptions Surrounding Membership Fraud for Cultural Organizations (DATA)

The Expensive Misconceptions Surrounding Membership Fraud for Cultural Organizations

Setting up ID checkpoints to spot “fake members” at your organization? Data suggest that you may be doing more harm than good.

Many cultural organizations treat “member fraud” as an urgent concern of the utmost importance. I’m talking about organizations that set up ID checkpoints at the entrance or membership deck and believe that their job is to find people getting in on their friend’s membership, and then do this. Data suggest that organizations that think this way may be doing themselves a grave disservice.

How big of a problem is membership fraud and guest pass fraud? How much is it costing organizations? We uncovered a data-informed line of reasoning that should make cultural organizations think twice before deploying the member fraud police (at least in the way that many have in the past).

 

1) Checking IDs is a top dissatisfier for members

This is a good – and obvious – place to start: What are the most dissatisfying elements of the member experience? IMPACTS surveyed premium members (defined as persons who have purchased an annual membership to a cultural organization costing $250 or more within the past 12 months) to better understand the nature and hierarchy of member “dissatisfiers.”

The data comes from the ongoing National Awareness, Attitudes & Usage Study of US Visitor-Serving Organizations, and contemplates the perceptions and behaviors of more than 98,000 visitors to 224 visitor-serving organizations of various types and sizes. For this component of the analysis, 1,096 “premium” members to these organizations responded to open-ended questions to identify the most dissatisfying aspect of their member experience. A consequent lexical analysis process organized these responses by general consideration, and these same considerations were presented to the studied members who were then asked to rank from 1-10 the considerations in terms of relative dissatisfaction (with 1 being the most dissatisfying aspect and 10 being the least dissatisfying aspect). The Mean Value is the average ranking that the member respondents assigned to each consideration.

IMPACTS- Premium member dissatisfiers

It makes sense that “proving identity” is among the most dissatisfying aspects of the member experience: “You know my name when you call me at home to ask for money. But you forget my name AND imply that I am trying to deceive you when I visit – a benefit for which I paid several times more than regular admission!” Exaggerated? Maybe (or maybe not), but let’s be honest: A premium member making this hypothetical statement would have an excellent point!

A reasonable person may consider showing a membership card and being asked to produce an ID to be excessive. And consider this: You’re openly asking for an ID in addition to the membership card because you believe that your members – the backbone of your organization – are conspiring to perpetrate a fraud against your organization. One need not be a philanthropy pro to realize that this is a pretty lousy way to treat current and potential donors. You know what they say in fundraising and membership development: “The best way to say ‘Thank you’ is to question a donor’s integrity!” Wait…people don’t say that?! Then why do so many organizations actually do it?

 

2) It is often more costly to AVOID membership fraud

“But if we stop checking IDs, won’t we suffer from member fraud and risk letting legions of non-members in for free?!” That’s a very sensible and intelligent question. Let’s look into it. The data below is from a 2014 IMPACTS membership study of 11 visitor-serving cultural organizations – seven of which have (or then had) ID check policies for members, four of which did not verify the IDs of members.

Market potential is a data-driven analysis that quantifies the number of people expected to annually visit an organization (and often at what price). Market potential analyses are the result of a modeling process, and enabled by the data typically acquired via the conduct of an awareness, attitudes, and usage study. The 2014 IMPACTS membership study further segmented the market potential by visitation type (e.g. admission paying visitors, members, etc.).

IMPACT - Membership ID validation market potential

Organizations checking IDs achieved 98.9% of their annual market potential (or 98,900 actual member visits per every 100,000 expected member visits). Organizations NOT checking IDs achieved 100.8% of their annual market potential (or, 100,800 actual member visits per every 100,000 expected member visits). Even if we attribute the entire member visit variance to member fraud (which is not a justified assumption), the maximum member fraud incident rate is 1.9% (or 1,900 fraudulent member visits per 100,000 expected member visits).

And, common sense suggests that attributing the entire variance to member fraud is, at best, a dubious practice. Why? Because at least two other, important factors may play important roles in explaining the delta: 1) It is extremely possible (if not likely) that some ID-checking organizations lose member visitation precisely because they check IDs and, as the data indicate, are dissatisfying their members. It is not hard to imagine a member being annoyed, offended, or inconvenienced by the ID check (or having a friend to whom they lent the membership card being turned away), and then not returning with the expected frequency to the organization. 2) Correspondingly, organizations that don’t check IDs may better satisfy their members with the relative ease of the entry process when compared to the ID police experience at other organizations. It is unlikely that the entire observed market potential variance has to do with member fraud when we know that checking IDs is such a strong dissatisfier, but let’s assume that the member fraud incident rate is 1.9% to be super safe. This begs the question:

Is a member fraud rate of 1.9% worth irritating your most closely held constituencies?

To find out how much money this amounts to for your organization, all that you need to do is plug in some numbers. As an (easy math) example, let’s assume that an organization receives 100,000 annual member visits and that the admission revenue per capita is $20. This would mean that member “fraud” poses a $38,000 annual risk to the organization (100,000 annual member visits x $20 admission per capita x 1.9% member fraud incident rate = $38,000 annual member fraud expectation).

(For easy math purposes, I chose a relatively large-sized organization for this hypothetical example. Extant data suggests that a visitor-serving cultural organization in the US with 100,000 member visits likely has a total annual attendance in the 400-500,000 range. The annual operating budget of this hypothetical organization is likely in the tens of millions of dollars – which may change the way you perceive that $38,000 if your organization is much smaller.)

Based on your own unique member fraud expectation, ask yourself: Is it worth this much money to risk alienating high-level donors and members? Or, here’s a better question: If you could invest that same amount to eliminate a major dissatisfier for members and donors, would you? The answer is probably a resounding “yes.”

 Also, when organizations use the word “fraud” they are making the assumption that everyone who is sneaking in using someone else’s ID would have otherwise opted to visit and pay full admission. These are flawed assumptions.  Sure – perhaps some of these “gate crashers” would have otherwise visited…but surely not all of them would choose to do so.  Some may argue that what we internally call “fraud” is, in fact, a bit like a trial program based on the most valuable kind of word of mouth – the recommendation of someone who is already an important constituent (i.e. the member who shared their ID with the “fraudulent” user).

Even if we assume that every single fraudulent visitor would have absolutely visited anyway and paid full price (which are both silly and dangerous assumptions…but let’s roll with them), checking IDs is still a bad financial practice. Organizations should consider the ill will that ID checks engender with their members (and what this means come renewal time), the onsite spending of “fraudulent” visitors at the gift shop and café, and the future value of these same visitors as potential endorsers! It may be reasonably safe to say that someone turned away at the door by the ID police may not offer a ringing endorsement for your organization. On the other hand, a person who visits at the express recommendation of a member who has shared one of their member benefits with this person may well thereafter visit on their own accord…and maybe even buy their own membership!

 

3) Guest pass fraud has been pre-paid and may be beneficial

But what about guest pass fraud? Many organizations report observing guest passes being offered for sale on Craigslist or offered as a perk for Airbnb rentals. Just how big of a problem is this?

The analysis below contemplates five nonprofit visitor-serving organizations in the US that offer transferable guest cards, tickets, or passes (i.e. the member need not be present for the guest pass to be redeemed) as a benefit of select membership categories. The purpose of the study was to assess if fraud was a major issue with this membership benefit. Here are some of the findings uncovered by IMPACTS:

  • People purchasing membership that included guest passes as a benefit spent on average $48 more than they would have for a similar membership category that did not include guest passes. The average premium paid by members of the five contemplated organizations to receive the guest pass benefit was $48.17.

 

  • Roughly four out of ten members who paid a premium to receive the guest cards didn’t redeem the benefit. 61.35% of eligible members who received the guest benefit actually redeemed the benefit.

 

  • People visiting using guest passes were worth 48.77% more to the organization then they would have been if they had bought a ticket. Explanation: Members who redeemed the guest pass benefit (i.e. shared passes for their guests to use), accounted for an average of 2.32 guest visits to the organization. In other words, of the 61.35% of eligible members who redeemed the benefit, the average usage rate per member was 2.32x. That means that overall, for every membership that included a guest pass as a benefit, actual usage of the guest pass accounted for 1.42 guest visits (61.35% redemption rate x 2.32 usage rate = 1.42 guest visits per eligible membership). At a price premium of $48.17, this equates to equivalent revenues of $33.92 per guest visit ($48.17 price premium / 1.42 guest visits per eligible membership = $33.92 per guest visit). The average per capita admission revenue for the five contemplated organizations was $22.80 – meaning that guest visitors were worth 48.77% more to the organization then they would have been if they had bought a ticket!

 

That said, guest pass visitors are likely worth even more than that. This math artificially demeans the value of guest pass programs as it includes the same, flawed assumptions that seem to plague many member fraud-related concerns: 1) The assumption that every person visiting the organization via the guest pass program would have otherwise visited the organization; and 2) The assumption that every person visiting the organization via the guest pass program would have not only visited but additionally done so on a paid basis. There are two critical factors to consider in assessing the value of a guest pass benefit for memberships:

  1. The people who choose to pay a premium to receive a guest pass benefit are likely among an organization’s best endorsers – they want to share the experience with other people and are willing to pay for it!
  1. If the guest pass program does nothing more than engender trial among new visitors, then this, alone, may be a benefit to the organization – organizations usually invest to engender trial. In the example of guest passes, a member is paying the organization to promote trial (and, these “trialers” likely contribute revenues to the organizations in terms of food and beverage sales, retail sales, parking (if you own that structure), and even potential additional admissions sold to accompanying visitors.)

Do guest cards contribute to fraud? It depends what you mean by “fraud.” Yes, there are likely folks visiting the organization that you didn’t intend to have a guest pass – but that’s not necessarily a bad thing. In fact, when you think about it from a trial perspective (i.e. reaching new audiences), it may be a good thing.

 

I was recently visiting a large museum in Chicago with my colleagues. The woman in front of us at the entrance had several children with her and, before entering the organization, the ticket-taker asked to see her identification. We overheard the woman explain that she was the nanny and that she was given the membership card to take the children and their cousin to the museum. The ticket-taker turned the nanny and three children away with a look of pride and accomplishment on her face as she explained condescendingly that only the membership holder could visit the organization with the children. The nanny looked extremely embarrassed. Is this what we consider a “win” in the visitor-serving industry?

“That’s extreme,” you may be thinking. Perhaps. But, remember: The person whom you’re turning away is the member’s mother, father, neighbor, nanny, grandparent, sister, brother, coworker, etc. (Believe it or not, folks trying to “sneak in” aren’t likely to be culturally erudite pickpockets and wallet thieves. Seriously. Is that who we think that they are?!) When you annoy members (or embarrass their friends), you’re probably more likely to lose them altogether than upgrade them to a membership that allows for more member entrances or guest passes. In a way, members (and especially premium members) have paid for the right to “defraud” us.

If you’re wondering what your “ID police” should do now, here is an idea: Train them to interact with visitors – which data suggest is the single most reliable way to increase satisfaction.

The member fraud crisis? It’s kind of a (mild) thing – but we’re hurting ourselves both in terms of our mission and financial future thinking it’s a bigger issue than it actually is. The sooner that we stop choosing to dissatisfy our members, the sooner that we can improve our member and donor relations to gain the critical support that we need to both fund our financial futures and execute our missions.

 

Like this post? Don’t forget to check out my 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, Financial Solvency, IMPACTS Data, Myth Busting, Sector Evolution 1 Comment

The Five Best Reasons to Add Millennials To Your Nonprofit Board of Directors

Don’t have any millennials on your nonprofit board yet? Your future might be tough.

There are a whole heck of a lot of good reasons to target millennial visitors and supporters. They are not visiting cultural organizations at representative rates, they aren’t magically “aging into” increased care for arts and culture, and – perhaps most importantly – data suggest that millennial audiences are an organization’s best audiences.

But what about how cultural organizations are engaging millennial leadership within institutions? We need to pay attention to this, too. I’ve posted on this topic before, but this one is so important that I made a little Fast Facts video about it. It’s time to get more millennials involved on nonprofit boards of directors – particularly for larger, prominent organizations with annual operating budgets >$30 million and/or annual attendance >1 million for visitor-serving organizations. Representation on these types of boards seems to be particularly lacking…and that’s terrifying, as many smaller organizations often emulate the practices of their larger cohorts.

Neglecting millennial board representation doesn’t necessarily mean that there aren’t loads of important conversations taking place in these millennial bereft boardrooms about how to better engage this valuable cohort. 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 time has come for organizations to sink or swim based on how effectively they engage millennials…and that may be particularly hard to do when nobody tasked to govern and lead these 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 five, critical reasons to implore the nominating committee to start cultivating some impressive millennials to serve on 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, this 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 tip the scales in terms of buying power in the United States this year, and our economy will feel the beneficial impact of their increasing consumerism 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.  Millennials who have children are not having as many of them as their Baby Boomer parents. Moreover, Generation X (which is only roughly half the size of Generation 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) Millennial support is necessary from a policy standpoint

…And if your organization does not get millennials involved in understanding policy-related challenges and opportunities from a leadership buy-in perspective, you may be “voting” against your own best interests. In fact, millennials may significantly influence the outcomes of the next six presidential elections – starting with the upcoming election in November! Indeed, this depends upon millennials actually voting, but building any aspect of your organization’s survival strategy upon 90 million people not turning out for elections is a stupid strategy. Moreover, millennials will eventually dominate a vast majority of government leadership positions…mandatory government retirement policies dictate this math. Inviting millennials onto your board helps ensure that your organization’s best interests are well-represented and maximally 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 marketingdevelopment, 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 is inconsistent. We live in a world now where everybody (not only 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 (i.e. in the board room), then your engagement narrative risks credibility. 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.

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.

 

Generational change and progress are inevitable – and denying (or even delaying) the inevitable is a horrible reason 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.

 

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 Fast Facts Video, Millennials, Myth Busting, Sector Evolution, Trends Comments Off on The Five Best Reasons to Add Millennials To Your Nonprofit Board of Directors

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 Comments Off on Three New Trends For Cultural Organizations That Are Not New At All

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

The Surprising Reason Why Organizations Underestimate Attendance Loss During Closures (DATA)

Know Your Own Bone - Underestimate Attendance During Closures for Cultural Organizations

When cultural organizations experience unforeseen facility closures, they lose more visitors than simply those who were planning to visit that day. Here’s why.

While the following data may be particularly timely after Winter Storm Jonas, cultural organizations (museums, zoos, historic sites, performing arts organizations, etc.) are consistently way off when adjusting annual attendance projections due to closures. This includes closures due to weather, irregular operations, storm damage, fire, utility failure, criminal activity, or anything else.

No matter the reason for the closure, we dramatically underestimate the overall impact on annual attendance. It’s generally a huge bummer when we have to close for unforeseen circumstances and take the attendance (and, for many organizations, revenue) hit. But knowing why we are so frequently wrong in quantifying the total impact of these closures may help us better understand visitors and develop more realistic contingency plans for lost revenue and attendance.

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. The reasons for this happening are important for organizations to understand.

Take a look at the math and see just how much we underestimate the lost annual attendance due to unplanned, short-term facility closings. This chart illustrates data from 13 organizations over a three-year analysis and includes a range of cultural, visitor-serving organizations – each represented by letter.

IMPACTS- Immitative value applied analysis

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.

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.

 

1) Lost attendance is not usually displaced to another date

“They’ll come back later,” some staff say. Well, most likely they won’t. Not this year, at least. Data suggests that it is incorrect to assume that lost attendance due to an unforeseen closure is somehow magically reallocated to other periods during the calendar year.

IMPACTS- Discretionary decision making utility model

Extant data indicates that schedule has the single greatest influence on a would-be visitor’s decision-making process. This analysis reaffirms that if a scheduled visit is interrupted by an unforeseen closure, then these affected visitors are unlikely to visit the organization in a proximate chronology. In other words, if a snowstorm in February forces a closure that results in a loss of attendance, then these would-be February visitors are unlikely to visit come April or July.

It is a miscalculation for an organization to simply distribute attendance lost due to a closure to the remainder of the year. Those 4,000 visitors who stayed home these past few days while the snowflakes fell during Winter Storm Jonas? They’re likely gone…and annual budgets should be adjusted accordingly.

That’s a bummer, but it makes sense. It accounts for lost annual attendance that at least matches the expected decline. But why do organizations lose more visitors than those who were planning to visit on the date of the closure during the remaining course of the year? It’s a good question with a very important answer.

 

2) Recommendations and social sharing from those who would have visited are lost (and that is a much bigger deal than we realize)

This lost visitation has a sort of “double-whammy” effect for many cultural organizations as they are reliant on word of mouth and other testimonial factors to help engage audience and motivate attendance. (This is particularly true for organizations in those regions where visiting friends and family is a primary driver of tourism and travel. If your plan was to take a visiting friend or family member to a local museum, but a water main break forced the cancellation of that visit, well, that museum lost out on both the organizing party’s visit and also the guest.) When we close for any reason, we don’t just 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 many organizations do not factor this into their adjustments. Fortunately, thanks to data, today we can. 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.

Wait! We lose real people because of lost word of mouth endorsement? Yes. It’s not just hot air: Word of mouth endorsements are a BIG factor driving the attendance numbers for cultural organizations – and every year, the attendance to cultural organizations with unforeseen closures prove it. Consider the analysis: Of the 13 organizations quantified in the study, the average attendance decline due to unplanned closures was -4.45% compared to market potential. However, the actual decline in annual market potential was observed to be -5.56%. Again, due to word of mouth and other “imitative behaviors,” the loss of every one visitor equates to a total annual decline of 1.25 visitors. 

It’s important to remember that recommendations and social media posts that would have resulted had the organization not closed that day are no more impactful than recommendations based on experiences that take place on any other day. Word of mouth recommendations and social sharing are always playing a role in a cultural organization’s actual, onsite visitation numbers. This fact right here, folks, is a dang good reason to go hug your social media community manager who facilitates the sharing of experiences and word of mouth endorsements. This is also a good time to remember that millennials – who are most likely to recommend a visit to friends – are largely underserved by cultural organizations.

 

Unforseen closures stink. We’re never excited to learn that our organizations have lost the financial support that would have been gained from onsite visitation. We rely on that support to carry out our missions. And, considered in that light, this data really kicks us when we’re down. (It stinks when data does that.) But this information stands to make us much smarter. Embracing these realities allows us to more properly adjust attendance and revenue numbers so we aren’t down in the dumps later due to unrealistic expectations.

Perhaps most importantly, these findings underscore the importance – and the numbers of real, flesh-and-blood visitors – affected by the important role that word of mouth endorsements and shared stories have in helping us to share our experiences with more people. And in the end, that’s kind of cool, right?

When we educate and inspire people, it really does bring in more people to educate and inspire.

 

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, Financial Solvency, IMPACTS Data, Myth Busting, Sector Evolution, Trends 3 Comments

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.

 

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Posted on by Colleen Dilenschneider in Community Engagement, Fast Facts Video, Financial Solvency, Fundraising, Myth Busting, Nonprofit Marketing, Sector Evolution, Trends 1 Comment