Making it Real. This Chapter...

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1 Chapter 13 Making it Real This Chapter... Provides the tools for turning the new audience development plan into a reality by budgeting, staffing and successfully managing the campaign; and Addresses the typical problems and pitfalls that can affect success and explains how to avoid them. Chapter author Julie Peeler is Vice President of Private Sector Initiatives at Americans for the Arts.

2 Making it Real Only those who dare to fail greatly can ever achieve greatly. Robert F. Kennedy BUDGETING RULES OF THUMB 1. COMMIT 10 25% OF OPERATING BUDGET TO MARKETING. 2. DRIVE DOWN COSTS ASSOCIATED WITH RETENTION. 3. CALCULATE THE RETURN-ON- INVESTMENT (ROI) FOR NEW AUDIENCE EFFORTS. 4. TARGET A PAYOUT OF BETTER THAN 1:1. Part I: Putting Together Your Action Plan The final aspect of marketing planning is developing timelines, budgeting and an impact measurement plan. These three activities have to be done in combination because the reality in an arts organizations means that if you run out of money, you find volunteers to get the work done. And budgeting cannot be done without understanding all of the elements of the plan that need to be costed out. There is no magic to budgeting. And there is no one single answer as to what the perfect budget figure will be for your organization. In fact, you ll use a variety of measures and analyses to develop several figures, then use your intuition to choose the final figure. There are two general ways to approach budgeting: Zero base budgeting Goal based budgeting Zero Base budgeting begins with all of the tasks you need to complete, then add the cost of each task. Goal Based budgeting looks at your current situation and your goals and determines what you need to get from here to there. Staffing and Project Management In Zero Base budgeting, you determine all of the elements of your plan, including those elements you will pay cash for versus those elements you will find pro bono, and those elements you will contract for versus those elements that staff will handle. Then you add up the costs and there s the budget. Sounds simple but it require highly detailed lists of tasks that need to be completed in order to implement the marketing plan or Action Planning. An Action Plan lists all of the activities related to implementing your marketing plan, the person on staff responsible for the activity, the number of days it will take to complete the task, the due date, the person with authority to sign off on or approve the task. The test of a good action plan is that it s highly detailed, it s agreed upon by all interested and responsible parties, its highly detailed, and finally, that it is highly detailed. What do we mean by highly detailed. Don t just list that you need to get the post card out for the next exhibit. You ll need to bid a designer, write the copy, get the art work, 13.1

3 work with the designer, edit their work, get your mail list together, ensure you have enough postage on hand or ready the mailing house, etc., etc. Use Worksheet 12.1 to help you get your Action Plan together. Standard Marketing Timetables are included in this chapter to help with planning. The test of a good action plan is that it s highly detailed, it s agreed upon by all interested and responsible parties, its highly detailed, and finally, that it is highly detailed. Part II: Putting Together Your Budget Again, to budget we re going to use a variety of methods to come up with a variety of budget figures that, hopefully, will be within a similar range. Then, you ll use gut instinct to choose a budget figure. You ve completed your Action Plan. Your first potential budget figure will come from adding up the cost of all the items on your Action Plan. Should this figure be outrageously high, begin cutting by substituting pro bono activities for things you would have paid for. But remember, add about five weeks to each Action Item that s being done pro bono. Why? Say you re working with a printer who is donating its services. First, it will take a while to find such a printer. Then, your job is not a high priority for them so expect delays once you ve delivered the art. Use Worksheet 12.2 to help get your budget together. 13.2

4 Making it Real Goal Based Budgeting When setting your marketing objectives, you wrote a numeric objective that may have related to awareness, single ticket sales, subscriptions, memberships, enrollment, etc. A good objective would have included your current level of those measures as well as your new goal. So a good objective looks like this: Increase memberships from suburban families from 500 to 800 by year end What has it cost to build membership to the 500 level? Determine what it cost you to get one membership, then multiply by 800 to determine your next budget level. In other words, if sales are to double, then spending must also double. Next, a general rule of thumb is that you should be spending 10-25% of revenues on marketing. That s Total Revenues. An organization just starting out, trying to make a name for itself in a crowded marketing should spend up to 25% of its total organizational budget on marketing. Once, established, that level can drop back, but should never fall below 10%. Below that, and you re spitting into the wind, as they say. Remember when we discussed spending to build new audiences versus retaining your current audience? This is called the 6:1 Rule. It takes six times more spending to build news audiences than retain old ones. Look at your retention budget. Are you spending six times more on your new audience development efforts? Looking at the Numbers You should have four numbers to consider now when determining your budget. One each from Action Planning, Goal Based Budgeting, the 15-25% Rules and the 6:1 Rule. They should be relatively similar, at least similar enough to be able to determine a final budget figure. Contingency Planning Of course, if it can go wrong it will go wrong. Expect 10-15% line item overages. Expect production problems, rate increases and last minute opportunities. Be sure to budget for those items, and make sure you re tracking the results of various media along the way in case you need to drop one in favor of something that s working gangbusters for you. 13.3

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9 Part III: Impact Measurement Now, it s time to determine how you are going to measure the impact of your marketing programs. This means developing a plan to determine the six key marketing questions involved in impact measurement: What are the results to be tracked and why? How will they be tracked and by whom? Where will the data be stored? When should we be tracking? How, when and to whom should we report the results? What is our Action Plan for implementing our tracking system? First let s define a few key terms. Often when our boards, funders or sponsors ask about program impact, they ask us for Outcomes. But Outcomes are changes in behavior or attitudes on the part of our consumer, and this is very hard to measure. Usually they really mean Outputs, which are impacts that can be counted like audience numbers, demographics, revenues, etc. From Outputs come Outcomes, like learning, leisure or restoration. Finally come the Out-plications, or insights from the data you can use for quality control on programs (both artistic programs and marketing programs), identifying staff training needs, input to improve resource allocation, identifying collaborative partners, etc. The steps to developing an impact measurement plan are: 1. Define the marketing objective 2. Determine the Outputs 3. Determine the short, medium and long-term Outcomes 4. Determine the best data collection method 5. Calculate the resources needed 6. Measure 7. Report findings. Use worksheet 12.3 to help you develop your Impact Measurement Plan. 13.8

10 Making it Real Step 1: Define the Marketing Objective Remember that a good marketing objective designates a demographic target, includes a numeric goal or expected change, and includes a verb or an action that should occur on the part of the prospective audience member. Write your 2-3 marketing objectives in the top section of Worksheet As an example, let s use a typical marketing objective: Increase memberships (or subscriptions) by 20% to 510 memberships from young families in the Hidden Oaks area during the Fall campaign drive. Step 2: Determine the Outputs Like we said earlier, Outputs are tangible, direct results of marketing activities such as numbers of programs, number of sales, demographics of new audience members, time of day/week/month sales occur, which media drive the most sales, etc. The important thing is to determine what Outputs you can reasonably expect to see in order to prove you have met your marketing objective. Remember to write those in the second section of the worksheet. For our example, we would be looking for: Membership/subscription units sold A zip code analysis of our database to ensure new members are from the Hidden Oaks neighborhood Membership/subscription revenue figures Day/week/month new memberships came in Can you think of anything else that might indicate we have reached our membership goal? If not, then on to step 3. Step 3: Determine the short, medium and long-term Outcomes Now we need to look not only at how the Outputs lead to Outcomes but also the time frame in which we can reasonably expect to see those changes. This area can be the hardest to define in the arts since the arts move people and how can you measure being moved? Also, not all outputs lead to outcomes and not all outcomes unfold over a duration. An example of short, medium and long term Outcomes might be that your daughter enrolls in ballet class and after a few weeks, she can recognize a tour jete when she sees one. After a few months of practice, she can perform a tour jete, and after 10 more 13.9

11 years can do one so well that she enters the School of the American Ballet. Four years later she is dancing professionally. However, in our membership example, people either buy a membership or they don t; there aren t baby steps in between. Enter your short, medium and long term Outcomes on your worksheet. Step 4: Determine the best data collection method Now think about the data you need and what the best collection method might be. These can range from quantitative surveys to qualitative research, from formal to informal methods and to database analysis. Will you do a survey or focus groups? Maybe people will give you input by informal methods like: Comment Cards Visitor Comment Books Voice Mail Response Line Mystery Shoppers Internal Interviews with Font-line Staff Observations Online feedback center Twitter/Facebook/Yelp comments Will you look at your sales database to determine how your media plan impacts your day and time of sales? If so you need to track sales concurrent with schedule of ad placement, notices, reviews or signage. Which medium is driving sales? Are most sales by mail, fax or online? Next, at what interval will you track? If you re looking at sales, you ll definitely want to take measurements before your marketing plan begins and again when it is finished. You ll also want to track along the way to ensure you re making progress against your goal. Write those items into your worksheet. For our membership example we will need an audience survey to determine who new members are and where they re from. We can also find this data in our database but the survey will also help us understand why they became members and if they re happy with their memberships. We ll want to look at membership revenue as well

12 Making it Real Step 5: Calculate the resources needed Like all measures of resources in the arts, be sure to include time, money and staff resources. At this point you ll inform folks in other departments what you ll be needing from them and when. Step 6: Measure Now, it s time to implement your impact measurement plan. As you go along, be sure to: Assess your assessment plan Don t pre-judge results Pre-determine where you re going to store the data; many impact measurement plans fail because they forget where they put the data, and can t find in September the great story they heard from a customer in May. Step 7: Report the findings Remember that the data are only as good as they are usable so when reporting the results make the findings clear and actionable. Don t report something you won t take action on or you will just confuse your audience. Try to develop concise headlines for key findings and explain the implications you see for programs and operations. Finally, present as much of the data as possible in pictures to make it memorable to your audience. Most people dread presenting their findings to management. Here are a few tips for making it easier: Arrange a presentation of overall findings to the entire staff and board. Give specific presentations regarding findings that have implications for particular departments or operations. Always finish a presentation with a dialogue about the findings and their implications. To prime the creative-thinking pump, facilitate the discussion with provocative questions One great format for presenting findings is to present the data, then an implication and finally an action. Next, work with the group to come to agreement on the priority of the implications and actions you ve discussed. Finally, determine next steps, assign responsibility and negotiate timing.

13 Worksheet 12.3 TRACKING PLAN GOAL: What is the goal for the overall plan? Marketing Objectives Objective #1 Objective #2 Objective #3 OBJECTIVES: What 2-3 marketing Objectives will help you reach that goal? (Objectives should be time sensitive, include a verb, name a target group and include measurable, numeric goals.) OUTPUTS: What are the numeric outputs of the marketing objectives that would indicate that you had met that goal? OUTCOMES: What are the potential outcomes for each marketing objective? MEASURABLES: How will you collect the data on the Outputs and Outcomes? (List methods) RESOURCES: What human and financial resources will be needed? How much time will it take and when will data be collected? 13.12

14 Making it Real Part IV: Typical Problems and Pitfalls Problem #1: Insufficient time and resources allocated for planning, creative development or implementation. Review standard timetables to make sure you re allowing sufficient time for each stage, from research and planning through development of materials and execution. Include ample time for your internal review process. Set your budget based on an expected return on investment rather than on what s left over for marketing, then budget to fill the house. You wouldn t spend a lot of money to throw a lavish party and leave no money for invitations. If budget permits, bring on additional staff (such as freelancers) or retain consultants with specialized expertise to expedite the process. If you perceive that you re going to run out of time and resources, drop superfluous tasks in favor of those that most directly support your objectives. Increase your budget to cover unanticipated costs, or pare down objectives to reflect the realities of your situation. You may need to stretch your audience development objectives over two to three years to build the financial resources required to execute the plan. Problem #2: Under funding to meet objectives or choosing strategies and tactics based on available funding. Set your budget based on an expected return on investment rather than on what s left over for marketing, then budget to fill the house. You wouldn t spend a lot of money to throw a lavish party and leave no money for invitations. Choose and evaluate tactics based on the greatest return for the fewest dollars (lowest cost per response) rather than the cheapest buy. Cultivate an investment-spending mentality. It will take daring, experimentation and experience to achieve the right balance

15 Making it Real If the target is too large, look for a segment within a segment. If it is too diffuse, set additional parameters (geographic, demographic, psychographic). Problem #3: Objectives too big or too many... Other priorities sap energy and fragment efforts. Pare down the number or size of objectives to a more manageable size, keeping business objectives in mind. Give yourself permission to let go of nonessential tasks and turn down requests that don t fit into the overall strategy. Look for synergies among your organization s various efforts, e.g. get development, marketing and volunteers to work together to meet shared objectives. Problem #4: Target too large, diffuse or ill-defined. Narrow the target or define it differently based on research and experience. For example, if the target is too large, look for a segment within a segment. If it is too diffuse, set additional parameters (geographic, demographic, psychographic). Have audiences involved along the way and continue to use research to help you get a clearer picture of the audiences, their needs and the best ways to reach them. Problem #5: Creative execution is off strategy for target or positioning. Review all creative work (PR, ads, brochures, flyers, etc.) against positioning statement and communications strategy frequently to make sure they match the strategy and are consistent with each other. If a headline or themeline doesn t communicate exactly the right message, drop it, no matter how appealing, fun or clever it is

16 Keep talking to customers to make sure communication focuses on their needs. Don t let the whims, tastes or prejudices of internal audiences co-opt creative. Don t overreact to one or two negative reactions from the audience or your internal team. Some will naturally react negatively to a change; keep the bigger picture in mind. Keep talking to customers to make sure communication focuses on their needs. Don t let the whims, tastes or prejudices of internal audiences co-opt creative. Problem #6: Picking the wrong tools or relying on only one to carry the program. Don t pick one tool just because it s what you ve always done, when another could produce a bigger return for the dollar. Always allow time and resources to evaluate efforts. Use multiple strategies, e.g. direct mail, advertising, social media, point of sale, promotions and public relations (events, outreach and publicity), against each objective. Use multiple strategies to guide the target from awareness, to preference, to choice. Explore different advertising modalities, e.g. print, radio, outdoor, television, and different sizes, locations and types of ads to see what works best with a particular audience. Don t forget to include public relations strategies in the mix. Problem #7: Insufficient frequency or reach e.g. too few ads or direct mail drops Plan and budget for greater frequency and a broader mix in the future. Remember that you re better off reaching 5,000 people five different ways than 25,000 people only once. Add an ad flight or direct mail drop as needed... place additional news or feature stories... host more events and community activities...etc

17 You sell one ticket at a time. Focus on building on little wins, not on making marketing history. The success of Target is abnormal. I Can t Believe It s Not Butter floundered for seven years before becoming the second most popular brand in the category. Problem #8: Expecting overnight miracles for marketing projects to fill the seats overnight. You can t change long-held beliefs or long-established behaviors with just one appeal don t expect your audiences to change quickly, either. You sell one ticket at a time. Focus on building on little wins, not on making marketing history. The success of Target is abnormal. I Can t Believe It s Not Butter floundered for seven years before becoming the second most popular brand in the category. Problem #9: Results exceed expectations they re a little too good! Figure out what went right and invest in more of the same. Keep on top of tracking and capturing the audience for future use. Don t be seduced by short-term or test results. Continue to execute to see if the strategy will work over the long haul. 16