3 Secrets that Improve Returns on Marketing Investments
Have you ever wondered how you can improve returns on marketing investments? Have you ever wondered why some non-profits seem to get more out of their marketing dollars, when others just get by? “Market leaders” generate more contributions, earned income and impact, and generally get more out of every dollar. At least that’s what it looks like to outsiders who are working hard to make their budgets go farther.
As a consultant who works with both non-profits and for-profits to help them achieve their goals, I noticed the difference. In 2001, I launched a 9-year research study to find out why their outcomes were so different. My goal was to find out what average performers needed to do to get more out of their marketing dollars.
What we learned was both simple and powerful. Both non-profits and for-profits that get more out of their marketing dollars do so for three common reasons.
The results were striking enough that the American Institute of CPAs asked me to write a book about what we learned. Marketing Management for Non-Marketing Managers: Improving Returns on Marketing Investments was released in 2013.
While I’d love for you to purchase the book, I’ll give you a sneak preview of what the research revealed.
The Prerequisite to Success
First, we discovered a fundamental difference between EDs/CEOs of the most successful organizations and those that are average performers. When they were asked who leads marketing within their organization, the ED/CEO of each market leader non-profit (and for-profit) named herself or himself as the individual with primary responsibility. By contrast, EDs/CEOs of average performing organizations tend to name a marketing director, development director, or other employee.
This is largely because market leaders define marketing broadly. It isn’t limited to promotions, like the website or direct mail. It encompasses everything the organization does to influence market behavior, from development to how it delivers on its mission.
The fact that CEOs/EDs of market leaders consider themselves to be the leaders of marketing within their organizations is important because the three secrets that improve returns on marketing investments all depend on strong leadership. When a marketing professional leads the effort without the ED/CEO’s explicit support, most organizations flail on at least one of these three critical behaviors. This doesn’t happen when the CEO/ED and his or her board are supportive.
Here’s what these CEO/EDs do consistently to ensure their organizations generate superior returns on marketing investments:
Secret #1: They Build Cultural Curiosity.
The most successful organizations, whether non-profit or for-profit, are constantly and systematically listening to their market. In fact, from the executive director to the development team, the receptionist to the controller, everyone helps the company listen and learn, and their executive directors consider this critical to their marketing success.
Why is that?
Because it allows market leaders to base decisions on facts, not assumptions. They aren’t guessing about whether a new development approach will be well received, whether a different ticket price will actually improve profitability, or whether they can successfully expand their programs into a new community. They know for a fact what will work. And knowing for a fact reduces risk, and reducing risk improves financial returns on those investments.
If you want to mimic market leaders’ success, focus on building a culture that asks questions, gathers data, and invests in market research when appropriate. Building cultural curiosity doesn’t have to be expensive, but it is critical to improving returns on marketing investments.
Secret #2: They Insist on Measurement.
By measurement, I mean the ability to quantify the impact of marketing investments on the bottom line, either in terms of financial impact or in terms of mission-based outcomes. Many people still don’t believe this can be done. In fact, I was once told that marketing was a “dark art that eludes measurement.”
This is no longer the case (if it ever was). Marketing can and should be measured. Market leaders do it every day, and you can, too.
Development teams are usually good at measuring returns. After all, the results they generate are financial and therefor more measurable. However, marketing for a non-profit can include outcomes that aren’t financial, but are still measurable. Knowing what you intend to achieve, tracking it, and then evaluating whether you achieved it, in numeric terms, is one of the most important ways to improve returns on marketing investments.
Secret #3: They Execute Consistently.
Market leaders execute consistently on their marketing plan. That really doesn’t sound like much of a secret, but I can assure you that, among average performers, it often isn’t common practice.
Plans drift off track or are abandoned for a variety of reasons. Some teams have a tendency to chase “shiny objects.” They have a new idea, and give up some part of their previous plan to pursue it. Other organizations begin implementation, and then find themselves short the staffing or funding required to complete it. Sometimes a board or executive leadership change derails the plan.
However, non-profits that generate superior returns on marketing investments develop thoughtful plans with well-defined metrics to measure both progress and outcomes. They stick to their plans and execute them all the way through to completion. They ensure adequate staffing and resources exist to commit to the plan prior to giving their team the go ahead, and they don’t change course mid-way. That isn’t to say that their plans don’t have the flexibility to take advantage of new opportunities. They do! However, new opportunities do not preclude the completion of existing commitments prior to realization of the potential return.
How Can Your Organization Improve Returns on Marketing Investments?
The last chapter of my book includes an assessment tool to evaluate whether your organization is optimizing returns on marketing investments. It’s a quick assessment, appropriate for non-profits and for-profits.
However, I created a custom version just for non-profits. Interested in getting a copy? Just subscribe to my blog. I’ll send it out with the March summary of posts on March 31. If you want it earlier (or miss that deadline), just reach out via email.