In part one of this series, we looked at understanding the financial position of an organization. In this second part, we will look at the marketing and development plans of an organization. These two areas represent the revenue engine.
It is a given for just about any nonprofit that attracting, retaining and upgrading patrons is the name of the game. Afterall, if an organization produces great art and there is no one in the hall to see it is it still great art? An organization’s marketing plan is crucial to operations.
Within the larger narrative of the marketing plan, a new executive needs to understand some key information.
- Booking Curves – Every organization claims to have an audience that is full of last-minute buyers. Truth is, every organization in every city is full of last-minute buyers. Booking curves model patron-buyer behavior.
- Marketing Schedules and Distribution Channels – When does an organization begin marketing an event? What distribution channels are being used, print, online, radio, television, social media? How does the marketing budget for each event relate to the setting of ticket goals?
Understanding key marketing metrics is also important. An organization should know the following:
- What percentage of first-time ticket buyers attend events?
- What percentage of first-time ticket buyers return for a second event?
- What percentage of the audience are multi-performance ticket buyers?
- What is the size of the subscriber base? (If there is one)
- What percentage of multi-ticket buyers convert to subscription?
- How many first-year subscribers renew for year two?
- What is the five-year subscription drop-out rate?
- What is the cost of attracting a single ticket buyer, with and without overheads?
All of these metrics help both the executive and the organization understand its pipeline. If some of all of the areas indicate growth or decline then further conversations can take place to address these areas.
For many performing arts organizations contributed income is more important now as it is representing a larger portion of total revenue. Understanding an organization’s pipeline, who is in it, who isn’t, how they are engaged, what gifts are being upgraded, and how the process translates into gifts is necessary.
Organizations should be able to look at their donors and communicate clear expectations as to where it is headed.
- How broad a base is represented in the annual fund?
- What percentage of current subscribers are also donors?
- What percentage of donors moved in, out or up in the last three years?
- How many news donors gave to the organization in the previous year?
- What is the impact of corporate and foundation gifts to the development portfolio?
Thinking of the annual fund as a portfolio is an excellent way to understand how each segment contributes to the whole picture.
Having a thorough understanding of these two revenue areas is critical to understanding how the core of the organization is functioning. From here we will finish up our series by looking at the artistic plan.