Measuring How Well Your Brand Performs: Using the BDI

It is a given that every product or service your organization offers does NOT appeal to everyone. In fact, it is likely that there are specific customer groups that are more interested in particular offerings than others. In today’s Metric Monday, I am going to explain how to do a Brand Development Index which will help you identify strong and weak segments (usually by demographics or geographics) for a particular product/service or type of products/services.

The application of this awareness can help you determine if there are pockets within your customer community that tend to purchase specific things more often than others, or why some pockets are under-purchasing compared to their peers. Ultimately, this will help you to create targeted communication strategies to encourage more usage/buying, or to create a product improvement plan to fill in any value gaps.

A Brand Development Index is a pretty straightforward calculation. Again, it is an measurement of how well a product/service performs within a given market group of customers, relative to its performance in the market as a whole. To begin with, you need to be able to specifically identify a target group. The more homogenous that group is the more likely it is your data can be acted upon with confidence. For example, choosing to select only by women may not give you the same confidence as selecting women who are frequent users and who have children in the home between ages 1-9. (NOTE: Whatever criteria you choose by should be linked to your overall research goal.)

Okay, once you have this group identified add up all the sales for a particular product/service by that target group and divide it by the total number of people in that group (you can also divide by households if you don’t have individual data). Hold on to this number. Now, in a separate calculation divide the total product/service sales by the total persons/households. Take your first number and divide it by this new number.

Your calculation should look something like this:

Because your BDI is a measurement of sales by a particular product/service per person (or per household) within a specific demographic group, compared with the average sales per person/ household in the market as a whole, you’re able to quantitatively see how parts of your customer community are buying what you’re offering.

Bottom line: Measuring the total sales, registrations, etc for a product, service, or event is sufficient if you’re needing only a top line number to work with. But if you are interested in creating specific strategies for groups within your community, you need to understand how they’re using your products and services. And because you’re creating an index number that can be benchmarked, now you can test to see if specific marketing messages or campaigns are making an impact.

-- David Kinard, PCM

7 Characteristics of Good Marketing Research

Yesterday I blogged about how to set up your marketing research plan. A friend noted that it was "too long" so I began to think about how to crystalize what good research is into a shorter hit list. Below are seven characteristics of good marketing research; keeping these in mind should help you in your efforts to gain insights into your communities.

NUMBER ONE: Effective marketing research uses the principles of the scientific method — observation, hypothesis, prediction, and testing. Since the goal of conducting a marketing research project is to uncover useful information, how you conduct your research is vitally important. Good research follows this standard process.

NUMBER TWO: Good marketing research develops innovative ways to solve a problem. This requires some level of creativity in your research. Other than traditional methods such as surveys and polls, in what various ways can the problem be evaluated? Are you even studying the right problem?

NUMBER THREE: Reliable marketing research uses multiple methods to acquire data and shy away from over-reliance on any one method. In your research, always make sure you adopt the research to the problem. In other words, don't say you want to do a survey and then figure out a problem to solve. Also, don’t be fooled into thinking that one method is better than others. Good research recognizes the value of using multiple methods and sources to achieve reliable information.

NUMBER FOUR: Savvy marketing researchers recognize the interdependence of research models and the data collected. The research model you choose will ultimately determine the type of information, its validity, and your ability to act based on findings. Therefore, always base your research efforts on solid models that are clearly defined and as explicit as possible.

NUMBER FIVE: Smart marketers understand the relationship between the value of information and its cost. There are always lots of questions to be asked and problems to be solved. However, to steward resources effectively, marketers need to consider the cost of market research, the value of the information gathered, and the likelihood of management’s ability or willingness to act on such information.

NUMBER SIX: Good marketing researchers show little reliance upon glib or stereotyped assumptions made by managers about how a market works. Often times, those in the midst of a market are unable to clearly see the market. The “forest through the trees” scenario applies here.

NUMBER SEVEN: Responsible marketing research is a win-win-win situation. It shows a healthy respect for the company, the product and the customers and never tries to harm or take advantage of customers.

So, there you have it. Seven ways to ensure your research is going to be useful and action-oriented when you're finished. And, hopefully, this wasn't too long of a post! :-)

-- David Kinard, PCM

5 Steps to Great Market Research

The use of market research has made a significant shift during the past 20 years. In the past, smaller companies generally did not make significant use of market research and let the big companies spend the big dollars to uncover marketplace trends, consumer opinions and behaviors.

However, today nearly every organization has a plethora of market research available to them because of social media technologies and the Web. This means there really is no excuse if your organization is not becoming more aware of its industry, market, and served communities.

To begin with, it is worthwhile to note there is a difference between marketing research and market research. Although they are closely related, marketing research is typically referred to as the design, collection and analysis, and reporting of data and findings relevant to a specific marketing situation facing a company. In other words, marketing research is more about the process than the findings.

On the other hand, market research is research into a particular market, segment or audience-type. It is generally considered to be a component of marketing research. I bring this difference up not because you need to worry about it in how you do your own work, but if you utilize the services of a research firm this will help you speak their language.

Step-By-Step
There are five basic steps in developing a marketing research project. For sure you can just hit the Web and start looking for information. But without some kind of objective in mind, or idea of how you might use the information you find, that searching around is likely to be less effective in the long run. The five steps are: 1) defining the problem or objective, 2) developing the research plan, 3) collecting the information, 4) analyzing the information, and 5) presenting the findings.

Begin with the End in Mind
There is an old adage that says, “A problem well defined is half solved.” This first step is critical to having a successful and relevant marketing research project. It begins with the end in mind and asks “What do we need to know?” “What could we do with the information we get?” “What if we find out something we didn’t expect?” “Why do we need this information?”

Other questions that need to be asked include is the research objective a long-term or a short-term issue? Is it specific enough to be tested or does it wallow in generality? Is the project exploratory in nature (gathering preliminary data and making suggestions for new ideas), or descriptive (trying to ascertain a quantitative finding), or even causal (an attempt to test a cause-and-effect)?

Whatever the motive or type of objective generated, a clear definition as to the research objective or problem is essential. Articulated clearly, it serves as a true-north keeping your research focused and relevant. Without this clearly defined objective, any research you do will be riddled with unnecessary waste and unclear results.

So, for the first step, take a look in your organization. What customer or industry information do you need to operate your business more effectively that you don’t have? What new product or service could you launch if you just had a bit more information about viability and acceptance?

Map Your Strategy
Before implementing any research project, it is vitally important to map out a research plan that is tied to a budget. Research can get very expensive as the different types of research activities vary in associated costs. Additionally, mapping out a research plan is imperative to identify and articulate how the research will be used to improve or develop bottom-line profitability.

If the research can only be articulated as an expense and doesn’t demonstrate a route to increased efficiency or effectiveness, then go back to step one and rethink your objective. This is a major “A-ha” check point to ensure you’re on the right track.

After a budget has been prepared, you’re now ready to begin looking at what types of information you need. There are two types of data sources available: primary and secondary. Primary data is usually gathered for a specific purpose or for a specific project. It is first-generation data generated to answer a specific research question. Secondary data is data that were collected for another purpose and already exists somewhere else.

There are lots of sources of secondary data available to you. They include internal sources (your database), government publications (statistical abstracts, Census, Industrial Outlook), periodicals and books (encyclopedia of associations and trade magazines), and commercial data (MRCA Information Services, Nielsen Company Reports). Many sources of information are available on the Web. Just be sure to vet the information to ensure its accuracy.

Primary data can be collected in a variety of ways. Observational research, focus-groups, surveys and experiments are just a few. These methods utilize two main instruments to gather information: questionnaires or mechanical devices.

Once the research approach and instruments have been decided upon, the next step is to develop a sampling plan. This plan asks three questions: Who is to be surveyed (sampling unit), how many people should be surveyed (sample size), and how should the respondents be chosen (sampling procedure).

Collecting the Data
The data collection phase of marketing research is generally the most expensive part of the process. This usually involves some type of third-party vendor or firm, or extensive in-house staff hours to conduct the research. Whether the collection efforts are in-house or outsourced, it is important to make sure that the integrity of the data collected is high. The removal of interviewer bias and the standardization of the collection process is paramount.

Data collection methods vary greatly and technology is playing a huge role in its development. Today, choices range from professional interviewers who sit in booths and have computers that randomly dial numbers. When a call is answered, that person’s information pops onto the screen and the interviewer asks the questions and types in responses. Other forms of collection include kiosks in malls, or family-based behavior monitors that record television watching habits and their correlation to buying behavior.

Analyze Your Analysis
However you choose to gather your research information, the tricky part then becomes how you analyze it. Depending on how many variables you have in your research project, the complexity of analysis will vary. There are a variety of statistical tools, models and optimization routines that any research firm worth their salt will know and use for you. This analysis should provide you with an answer to your original question/issue, or be able to generate further questions for study or clarification.

The trick in analyzing the information is not to get carried away with looking at the data in every possible way. Look for your answer. See if there are any relevant connections to other data and move on. Don’t get caught in paralysis by analysis.

Getting the Answer
After the information is analyzed, the last step in the marketing research process is to present the findings. Whether presenting to a board of directors or to yourself, it is important to write up a report outlining your findings. Document your efforts and processes for future reference. You’ll be glad you did! Of course, findings can suffer from a variety of errors. If so, this findings report is the basis for your next research project.

Hopefully this article has helped you consider your own company’s research needs and outline how you might begin your own marketing research project. For recommendations on good research firms in your area, contact your local chapter of the American Marketing Association. They can give you some suggestions.


-- David Kinard, PCM

Is There a Pathway to Social Media Celebrity?

I’ve spent a lot of time lately looking at the celebrities of social media to try and see what has earned them this celebrity status. These are the people who have tens of thousands of people following them on Twitter (many well over the 100k mark), or those who have blogs everyone is referring to and commenting on.

So, I’ve been thinking about what the qualities are that these celebrities have or that their conversational feeds have. What creates stellar levels of hype around them? What I am seeing is that they are part of a larger ecosystem of four primary groups. Each part is symbiotic to the other – meaning that without one, the whole thing collapses. As well, I think that depending on which group you’re a part of determines if you’ll ever have celebrity potential.

Thus far, I’ve found there are four main ways that celebrities are created:

1. Content is the pivot point – usually.
It seems the social media ecosystem is really made up of four groups – Pushers: the aggregators and promoters of content; Creators: the originators of content; Consumers: the users of the content; and Transformers: those who see not the content, but the ecosystem as the means to an end. A more detailed profiling of the four groups would reveal greater distinctions, but suffice it to say that the primary commodity exchanged is content. The ecosystem thrives on the movement of content from one to another and the Creators, Pushers, and Consumers all live and die by it. However, the outlying Transformers do not participate in the ecosystem because of the content, but because it provides a framework for them to accomplish something else.

One example of this is Wil Wheaton (@wilw). Wil has a gigantic following but appears to use Twitter and his blog as a channel for his various streams of consciousness. Yes, his content is original, but I would submit that content is more for his own benefit – and we just get to be a part of it whereas a Creator is someone who creates for others to use and benefit from. For Wil, the ecosystem appears to be simply an outlet for his expressions. (As of this writing, Wil is ranked 12th with the most Twitter followers at 107k+.)

2. Quality does not equate status; freshness does.
I don’t deny that this is a nearly heretical statement to make, but not everyone who has a massive following is saying anything truly remarkable. Again, thinking of the four groups, those with the largest followings are typically Pushing other content.

Case in point, I was a bit disappointed when I started following Guy Kawasaki’s blog How to Change the World. I hung in there for a month or so, but eventually dropped it from my reading list because I wanted Guy. I love reading his writing but what I got in his blog was other peoples’ content he thought was interesting.

And strangely, this is exactly what makes him so attractive to follow. Social media celebrity Chris Brogan wrote about this in a recent blog post noting that "the most “important” people (in at least the public business sense) I have ever met in my life have all asked me more about myself, and even with me trying hard to turn it around, they were gracious and interesting and still worked hard to know more about me than themselves.”

Now, even though the biggest of the big are not usually delivering messianic insights their key contribution is to scour the ecosystem for fresh perspectives and transmit that freshness out to the rest of us. Key to their celebrity status is their mutant ability to intimately understand the pulse of the ecosystem, find and vet content, then share it with everyone else.

3. It’s who knows you.
If you’ve read Tipping Point by Malcolm Gladwell you’ll instantly get this next element. Celebrities are connectors. Not only will they remember you, your name, and usually something about you after meeting, but they have the uncanny ability to do this same thing with exponentially more people than the average person while finding links between everyone and everything.

It seems that key to becoming a social media celebrity is being known by the Pushers. A good example of this is when Mashable mentioned @cspenn in an article.

Pete Cashmore (@mashable), even noted the marked increase in followers for @cspenn.

Now @cspenn has a long way to go before he hits true celebrity status as he only ranks with the 700th largest following on Twitter. However, the impact of being known by a Pusher is remarkable. Not only do you get a big bump, but if another Pusher happens to find your ideas fresh, then you’ve got more Pushers transmitting your content to the ecosystem.

4. The metric is relative.
Of course, someone reading this is saying, “Hold on a minute. There are those who are celebrities but exist in smaller ponds that exist outside of the mainstream.” And therein lies the challenge of qualifying what celebrity status is and isn’t. For the most part I’ve used followers as the basis for qualifying a social media celebrity. Tracking your followers is easily captured and most commonly used as a metric of status. Blogger and social media ROI guru Beth Kanter noted in a recent post that calculating your ROI “is a much broader concept than just doing the math.”

Certainly there is merit in noting that celebrity status can exist in different circles in highly meaningful ways. For instance, another way of looking at this is to compare winning Best Actor at the Oscars versus Best Leading Performance by a Leading Actor at the Tony Awards. Ben Daniels or Mark Rylance are highly acclaimed Broadway performers, but not part of the popular mainstream conversation.

However, I submit that celebrity status is a state of relative condition within portions of the ecosystem. If you consider the long tail curve, it appears at first that there are only a few who qualify for celebrity status. But if you were to examine detail within the tail I think you’d find that there are repeating patterns of the long tail curve supporting celebrity status within various niches.

So, what does all this have to do with increasing your ability to market for good? Well, I’ve tried to withhold a label of any sort that identifies whether it is good or bad to be a social media celebrity. But aside from that element, I wonder if there is an identifiable pathway to achieving celebrity? Are there gatekeepers to celebrity? If a cause could figure out this pathway, it is possible to gaining greater exposure to your issues? A huge number of Pushers got behind Twestival’s recent event for Charity: Water raising more than $250,000 in grassroots donations. . Is this replicable?

-- David Kinard, PCM

Metric Monday: Satisfaction and Willingness to Recommend

How do you know if your customers are happy? How do you know if they’re not? How do you figure out the intensity of their feelings? Understandably, most customers who are really happy will tell you. The same goes for those who are not. It’s the unwashed middle that you should be worrying about. They represent the part of your customer base most susceptible to the competition.

Whether your customers are actual consumers of your product or service, donors to your cause, or partners with your organization, understanding what they feel about you – and how intense those feelings are – is an essential metric that when used can help your bottom line. In today’s edition of Metric Monday I am going to offer a few perspectives on how to assess satisfaction and willingness to recommend.

Most marketers know they need to measure customer satisfaction, but not the real reason why. Satisfaction serves as a predictor of future success. It is one of the few forward measurements that can be taken whereas most metrics are latent in nature. Willingness to recommend serves in this same function, but is a good measurement of the intensity of satisfaction. Both metrics quantify an important dynamic. When a brand has loyal customers, it gains positive word-of-mouth marketing, which is free and highly effective (see my radio interview with Andy Sernovitz, founder of the Word-of-Mouth Marketing Association).

Customer satisfaction is generally measured on a five-point scale allowing for two positive ratings, one neutral rating, and two negative ratings. I hate this and think it is a misguided way of looking at satisfaction scores. Here are my problems with this approach:

1. Customers are either satisfied or not. You can’t be half in love, or half anything for that matter. You either are, or are not.


2. It’s nearly impossible to quantify the difference between what a score of 4 or 5 is in either direction of satisfied or unsatisfied. What does it mean to be a 4 and not a 5?


3. Giving customers a chance to select neutral only provides people the opportunity to not really make a choice. That ambiguity doesn’t help you one bit. You WANT to know if they’re happy or not.

Okay, so I suggest that your surveys or whatever tool you use to say, “Hey, are you satisfied with your experience?” use a YES or NO response. You can certainly add a skip logic question if the answer is NO to find out what the problem was. I also don’t see any harm in doing the same for a YES response – find out what worked for that customer.

Then for both YES and NO respondents, ask the willingness to recommend question. This gives you the insight as to how deeply they feel about you. In asking this question I suggest you use a three point scale: No, Maybe, Yes. If you set up your survey correct, you should be able to do some cross tabulations to see how many unsatisfied people answered yes, no, and maybe, and how many satisfied people chose those same options.

Here is an example of what the data might mean to you. If you get a bunch of satisfied customers who say they are not willing to recommend you, then your problem could be that although you’re meeting expectations you’re not very exciting, inspirational, or are seen as an undifferentiated commodity. Basically it means there is no energy behind your brand. In another example if you have a bunch of unsatisfied customers who may be willing to recommend you, then you have a major opportunity to fix something and generate a bunch of advocates for your organization. I’ve created a simple matrix below for you to consider as possible action plans. (Click on the image for a larger view.)

Bottom line: Measuring your satisfaction scores is a must. Collecting and analyzing the data over time will help to identify trends that are critical not only to your competitive success but also to your ability to identify problems and fix them before they become serious problems. Measuring your audiences’ willingness to recommend your organization, or products, is a great tool for identifying action plans to retain customers while growing your base of grass-roots evangelists.

How is your organization measuring customer satisfaction or willingness to recommend? How is it working for you? What actions are you able to take from that metric?

-- David Kinard, PCM

Play the iPhone Music and Market Your Cause

This is what I love about the human ability -- or drive -- to take a product and transform it into something else. This video, which shows a new app for the iPhone, allows you to blow across the iPhone's speaker and a tone much like a flute emits from the speaker. With a few well-placed fingers, you've got yourself a musical instrument.

So, what does this have to do with your cause or nonprofit? Tons.

First, if you're a struggling music society or arts center, why not have a concert done wholly with technology, not traditional instruments. Not only is this idea fresh and unique, it's buzz worthy and therefore sponsor worthy. A communtiy fundraiser added to the concert and WHAMMO, you've got an instant evening of fun.

The point IS NOT that you need to use the iPhone in your next awareness or communications program. The point IS that you can begin to think about the unusual and find ways to incoporate that into what you do. The public has learned to treat your calls for help as ever present, and never urgent. Masses are looking for somethign to surprise them (not shock them) and give them a moment's respit from the frenzy of their world.

So, put this idea to action by scheduling a brainstorming meeting with your staff and invite a few people who have nothing to do with your organization. Get the sales manager from a local car dealership, get a mail carrier or the UPS delivery person, aks a chef from a nearby restaurant, and how about the kid that works behind the counter at Best Buy. Have them come for a session on how to think about what you do and how to communicate it in different ways. Harvest the low hanging fruit from the ideas and have fun.

-- David Kinard, PCM

What's the Right Price?

How much is the right price to charge for something? Not only have volumes been written on the subject, but doctorates have been earned just by studying one type of metric around price, pricing, price elasticity, and the economic impacts of prices on consumer behaviors. Well, I am not going to try and cover all those issues in today’s Metric Monday, but I thought it would serve us well to cover two basic price metrics – Reservation Price and Percent Good Value.

Reservation Price is the value a customer places on a product or service and subsequently the maximum price that individual is willing to pay. Percent Good Value represents the proportion of customers who believe a product or service is a “good value” at a specific price. When combined these two metrics provide a marketer an evaluation of pricing and customer value.

To calculate your Reservation Price you need to know the maximum price a customer will not go over. This is going to require some research of your target market (i.e. customers, prospects, etc) and is no easy matter to do. Most market researchers will suggest doing a conjoint analysis (a fancy way of relating variables to one another) but I suggest some basic surveying on your part. It won’t be perfect, but you should get some basic information to use – such as a range of maximum prices your target is willing to pay for something. In doing this, you are essentially combining Reservation Price with Percent Good Value.

In your survey you can ask a two-two part question to get to this data.

1. Considering the [product/service], would you attend if the price was set X? (your control question).


2. Considering the [product/service], please indicate the point at which the price goes over what you would be willing to spend.

The first question can be considered your control question and I suggest testing three or four prices using common industry prices, or aggregates of what the competition is charging. By way of testing, you only want to ask their answer to one price, so in essence you’ll have a couple of different survey editions. The second question asks the respondent to provide their maximum price (reservation price). DO NOT ask these questions back-to-back in your survey or you’ll likely get a lowball number or one equal to the control question. Separate them by at least three or four questions.

Now you have two data sets. Take the range of respondents from the second question and associate the number of respondents to each value. For simplicity, you may want to make some minor adjustments in the scale to make the data set more manageable. You also need to know what your variable cost is for the product or service so that you can understand the price as it relates to your organization’s contribution margin (see earlier post for more on this).

When you map out the range of respondents to the second question you’re getting something called a demand schedule. In another column subtract the variable cost from the price you’re charging. This basically shows you how much you lose or make at each price level, and at what point the price becomes high enough that your demand starts to go down.

In the example below I’ve created a sample chart to explain how this looks. Let’s assume that you want to price your conference, workshop, or charitable gala. You want to know what the right price per ticket should be. After doing your survey you get a range of Reservation Prices between $25 and $325. You’ve listed the number of people who said that is the maximum they’d pay, and you’ve also listed your variable costs for that event (I have mine set at $40).


The math from here on is pretty simple. You subtract your variable cost from the price you sold a registration for, and multiply it by the number of people buying it at that price. In the example you will see the contribution margin go up, peak, and begin to decline. Thus, from the data you gathered, it appears that $185 is the optimal price.

Now, back to the survey questions and that control price. This is basically our “good value” price. Most of the time it is hard to get data sets for the Reservation Price study. By asking the control question we’re essentially asking our target if our product or service is a “good value” at a particular price. We can map out the most common answers and check our demand curve price against it. This process is also useful to help you know at what price to set your product/service and what discount levels you can offer.

Bottom Line: If your pricing strategy is akin to throwing a dart against a wall or going with what the competition is charging you are creating a lose situation for your organization. You may be leaving critical monies on the table by not charging enough, or you may be diminishing your market impact by overcharging. Using a method like Reservation Pricing and Percentage Good Value allows your organization to understand not only what your customers value, but also what prices contribute and take away from your top line revenue.

For more on pricing strategies, listen to my radio show with Reed Holden, author of Pricing with Confidence: 10 Ways to Stop Leaving Money on the Table.

-- David Kinard, PCM

From Junk Mail to Power Mail

Last week blogger Nancy Schwartz wrote about receiving a direct mail piece from one of her favorite nonprofits -- the adoption agency they used. But instead of receiveing a direct mail piece that engaged and nurtured the relationship between the agency and Nancy's family, the piece ended up having them question the strength of the operation. Her experience inspired me to write a bit about how to turn your Junk Mail into Power Mail.

How much mail do you get every day? For some, that daily ubiquitous pile of paper is almost a status symbol. For others, it is just one more hassle and headache in an already crowded day.

The issue of what is so commonly referred to as an overload of “junk mail” has gotten worse, or so a report released by the Consumer Federation of America says. The report, which surveyed more than 1000 people found that 78 percent of respondents believe the amount of unsolicited mail, or junk mail, they receive irritates them "a lot or a little."

Of the 78 percent who found it irritating, 48 percent said junk mail irritates them a lot. That's an increase of 2 percentage points over the prior year's survey.

Direct marketers say, however, that if direct mail is targeted, it is a very effective and welcome form of marketing communications. And the United States Post Office agrees. They rank direct mail third just behind TV and newspapers in marketing effectiveness. The critical ingredient in making direct mail work, however, is targeting.

Think about it, sometimes that “junk mail” catches your eye, and quietly, while no one is looking, you may even open it. Why? The reason is quite simple. The offer or packaging of the mail interested you enough to cause you to look further. Junk mail are only those pieces which promote a product or service you don’t want or need, or a cause which doesn’t resonate in your hearts.

The most savvy direct mail experts all agree that you should have the best offer and packaging in your direct mail piece. However, it is the list that you send it to which determines your success.

Next time you prepare to send out a letter, brochure, or other direct mail piece consider the following questions which will help increase the effectiveness of your list.

1. Is direct mail the best medium to carry this important message? If not, go back to the creative drawing board and identify the best way to get your voice heard.


2. Who is the specific target audience for this piece (men, fathers, women, mothers, purchasers of fitness equipment, general public, registered voters, etc.)?


3. What is the audience’s profile and characteristics (age, sex, lifestyle, work habits, relationship to your product/service/issue)?


4. What does the target audience do in terms of lifestyle (What do they read on a regular basis, where do they live, or where do they go for vacations, dinner or entertainment)?


5. When is the best time to reach them with your message (time of year, day, month, event considerations)?

By identifying these basic characteristics of your target audience, you can purchase lists that more accurately match your ideal prospect, thus increasing your direct mail piece’s effectiveness and staying away from “junk mail”.

-- David Kinard, PCM

Non Profit e-Marketing

In yesterday's radio program I had a great conversation with Allison Van Diest, a senior product marketing manager for Blackbaud (they’re a company that for the past 27 years has created software solutions to support the needs of schools, universities, healthcare, human services, cultural groups, and even faith-based communities). We talked about event registration, email strategies, Web site analytics, online communication strategies, and even fundraising -- and what non profits need to know.

Specifically, online donors are a key growth segment for nonprofit organizations. With the average online donor giving more initially and having a higher lifetime value than conventional donors, the importance of online giving as a revenue stream is growing. In fact, if I heard correctly, the average online donation is $60 for those sites with just a "Donate Here" button. But for those that integrate technology into their broader fundraing communications the average donation skyrockets to more than $120.

What strikes me in today's troubling economic times is that only 6% of non profits say that fundraising is their top driver, and only 36% expect to increase their efforts in this area. With an exptected $11 billion raised in 2008, up from $7 billion in 2007, and the proven micro-donation precedents set by last year's presidential campaigns, this should be a top priority across the board (pun intended).

You can listen to the interview with Allison here.

-- David Kinard, PCM

Trade Show Marketing for Associations

Most associations are used to hosting trade shows and exhibitions for their own members to attend and for good reason: The revenues from these can generate the bulk of an association’s annual budget. But participating in the right trade show as an exhibitor can be extremely valuable for an association in generating awareness, interest and even growing its membership.

There are four great resources for any organization to utilize when searching for the perfect show to participate in as an exhibitor. The first is available on the Web at TSNN.com. This site has a search engine listing trade shows and seminars, with background and other pertinent show information. Best of all, it's free. Three other great resources are local Convention and Visitor's Bureaus, the local Chambers of Commerce, and the American Society of Association Executives (ASAE). Each of these organizations come into contact with show planners of all types and may even have comprehensive show calendars that you can use in your planning.

There’s no shortage of opportunities either. In past surveys, ASAE indicated their member societies plan 375,980 meetings, expositions and seminars involving more than 272 million attendees. And some of these associations are planning huge trade shows with attendance for the top seven ranging from 65,000 to 148,000 attendees. This doesn’t include the opportunities available via hundreds of millions of dollars spent in “sponsorships” that elicit equal to even greater exposure than a trade show.

It is estimated that 82% of all trade show attendees come to see new products. So, for the relatively unknown association, trade shows are powerful mediums for increasing awareness, allowing it to compete right alongside bigger, more established organizations. And, for those associations already established in the marketplace, a trade show is an excellent venue to “make the sale” on membership or other services. Since most attendees at a trade show arrive predisposed to buy, it isn't uncommon for them to sign up for memberships on the floor, or in follow-up sales calls after the event.

It is best to do some research and make a list of all the shows that will put you in front of the right audience. Just because a show has to do with your industry, does not mean it will attract the right type of attendee. Figuring out who usually attends the show is just as important as figuring out at which show your association should exhibit. You want to ensure that the average attendee is someone who can make a decision on the show floor about your valuable offers. Once you have the ideal shows identified, then it's time to see which ones are affordable for your association.

Before you invest any time in planning or money in developing materials, it is critically important to determine your return on investment (ROI) and how you plan to measure the show’s success or failure. Too many exhibitors cannot demonstrate a return on their investment because they don't start out with a plan. What is the purpose of even attending the show? What do you need in terms of results? Is this show to create awareness, leads or sales? How many leads are needed? How many sales? Are the objectives for the show realistic for your abilities and resources?

Once you have a solid set of objectives, you can identify if a show is the right one to help you, and the clear objectives also help focus your efforts and control your expenses. Many corporate companies can link 60% of their annual sales to trade shows. But they can only do this because they have a solid plan. Trade shows will typically produce results proportionate to the amount of effort put into them. It is not uncommon to attend shows where a booth is understaffed (not enough people), poorly staffed (the wrong people), or not staffed at all. Just letting a show happen to you is a sure-fire route to expensive failure. To get the most out of a trade show you need to put energy, time and effort into planning, promotion, staffing and following up.

Success can be measured, but again, you have to know in advance what you're trying to measure. Figuring this out after the fact is nearly impossible. If you're trying to generate member prospects, then you're going to need some type of promotion beforehand inviting qualified prospects to your booth. Once they arrive you can qualify them further by asking questions and collecting their contact information. (Just having the fishbowl for business cards is a waste of time. You have no idea who is dropping in their cards.)

If you're trying to generate awareness, create pre-show promotion that gets people to your booth. There you'll have demonstrations, free samples, and other literature which is coded so you know where it came from. Then, do some post-show measurement by calling and surveying attendees to see if they remember you, and what they thought of your product or service. Again, you've got to know what you want to measure and create a plan to measure it before you can actually measure it.

Why do all this planning? One simple answer: Trade shows are not cheap. While they can produce significant results for your association, they can also be a black hole of critical resources if not carefully considered and planned for.

If you plan to do a lot of them, then it might make sense to invest in a custom-made display. If however, you are just going to do one a year, then renting a display has some advantages—especially if you're on a tight budget.

Here are the common expenses involved in exhibiting at a trade show. These will vary greatly by the type of booth you expect to have. Obviously larger booth spaces and more complex displays will significantly raise costs.

• Travel and lodging for whomever will be staffing the booth if the show is out of town
• Employee time for those who are staffing the exhibit (if you don’t have volunteers)
• Shipping of materials, display, etc.
• Booth rental with supplies (tables, carpet, electricity, chairs, plants, etc.)
• Display rental or purchase
• Promotional materials
• Pre-show promotion or advertising
• Post-show promotion or advertising

Depending on the show and its popularity, renting booth space can cost a few hundred dollars to tens of thousands of dollars. It is important to note that not all the "popular" shows are necessarily the best for every business. Many exhibiters show up at these because they have to, not because they get a lot of business from them. Sometimes the smaller shows can produce great sales results.

Because the booth rental fee usually only covers the space itself, you’ll also need to budget for curtains, chairs, tables, plants, carpet, electricity, video or sound equipment, extra lighting, trashcans, and more. Basically, plan to pay for absolutely anything and everything you don't bring yourself. And if you wait until the set-up day prior to the show to order an item from the exhibition management company, expect to pay a sizeable markup for the last-minute order.

The display itself does not have to be a major exhibit expense. Yes, you can likely rent one, but for a few hundred dollars you can get a really nice, lightweight, and portable display. One of my favorite places to get displays is from the good people at Earnest Images and ask for Rick (I receive no benefit from making this recommendation -- I am just a very happy customer). Larger displays with attachments and gadgets will dramatically raise the price. If you want to purchase your own 10'x10' floor display with custom photos, plan on spending a few thousand dollars. Today's displays are flexible enough that if you need to change out the images a year later, you should be able to do that for a modest cost.

But it's not just the display that makes your exhibit a success or not. Successful exhibitors at shows also plan pre- and post-show promotions. They send invitation-style announcements to their existing database of customers or prospects, or they may buy a targeted list from a list broker, or rent the show's attendee list from the prior year. These promotions can be direct mail, advertising, telemarketing, e-marketing or other formats. Your goal is to let people know you'll be at the show and to get them to your booth. A game or promotion where they have to visit your booth for the prize or a free gift often helps. These promotions can elaborate or simple, but plan to spend at least $1000 on postage, lists, and materials.

In determining your costs you’ll also need to account for whatever promotional materials you bring with you to the show such as samples of your product or company literature. Make sure you have enough to do the show and some left over for business afterwards. Creating specialized materials just for a show is a good idea because it can help you track leads or sales afterward. With the advent of quick digital printing, these materials can be simple and expensive to produce, yet professional looking and attractive. Some quick print chains may even be able to print your order in the city in which you are attending the show and deliver the materials to your booth saving you shipping costs.

Participating as an exhibitor can make a huge contribution to your association’s member acquisition and marketing campaigns. But before you register for any event, make sure you have a solid, measurable plan developed beforehand. This plan will help to preclude any unexpected and unwanted outcomes making your trade show experience a positive one.

-- David Kinard, PCM

Metric Monday – How Much is that Marketing Effort Worth?

The scenario is common – you’re in a meeting with the communications committee and someone suggests that your organization needs a brochure. Lots of ideas are shared about the size, how big, how many, and where it could be distributed. But very little of the conversation surrounds what you want to receive back from that brochure. In other words, what is that piece supposed to do for you in terms of contributing to your organization’s top or bottom line revenues? In today’s edition of Metric Monday I am going to suggest how you can determine if your marketing activities are negatively or positively contributing to your finances. Break-Even Analysis, and Contribution Analysis are two metrics you can use for this purpose.

(Important Reminder: variable costs could be the cost of goods sold, shipping/delivery charges, costs of direct materials or supplies, and/or wages of part-time or temporary employees. Fixed costs remain the same regardless of your level of sales such as rent, equipment expenses, and salary of permanent full-time workers.)

The break-even level is basically the dollar amount – in either donations generated, registrations sold, memberships acquired, etc – that is required to cover the total costs (both fixed and variable) of the marketing effort. Your profit at the break-even level is zero. The equation looks like this: Total Costs = Total Revenue.

Now, if your prices are higher than your variable costs, then revenue generated contributes to covering some portion of the fixed costs. This is a contribution level. So, your contribution can be calculated as the difference between unit revenue and unit variable costs. When you’ve generated enough contribution to cover all your fixed costs, then you have a true break-even scenario. Of course, any revenues generated that go beyond the break-even scenario is profit.

Okay, now that we have these basic financial concepts in mind, let’s go back to the idea behind the brochure. Again, the first question you have to ask yourself is what do you want to receive back from that brochure? What is it supposed to do for you? More often than not, committee members will say it will help to generate awareness. So then you have the difficult task of assigning a dollar amount to what awareness means to your bottom line. For this basic reason, I typically suggest organizations do NOT make a brochure just to have one. Assign a specific, quantifiable purpose to it – a goal that can be measured against. That’s the only way to know if you’re efforts are contributing to your organization’s value.

Practical Scenario: Let’s figure that you want to do a brochure to generate registrations for your conference. To identify the benefit of that brochure you first need to know how much each registration sells for (e.g. $300). Next you need to know the fixed costs to your organization to put on the conference – basically your own organization’s staff, equipment, etc. Let’s say that is $12,500. You also need to know the variable costs to your organization for things like confernece room rentals, meals, badges, speaker fees, etc. Let’s say they are $210). That means you have a contribution per registraiton of $90 ($300-$210=$90).

To figure out your break-even volume you divide the contribution per registration into the fixed costs ($12,500/$90). In this scenario you need to generate 139 registrations. As your variable costs change you recalculate the formula to identify how many registrations you need to cover your fixed costs and achieve a break-even point. If your brochure is more expensive and adds an extra $5 per registration to your variable costs making them now $215, you’ll see you now have to generate 147 registrations to break even. If you need to make a profit on your conference of $5,000, you can calcuate that you now need to generate 205 registrations (I figure this by simply adding the profit requirement into the fixed costs forcing it to be a positive return to the organization).

Bottom Line: Marketers spend way too much of their time just making brochures and doing marketing without fully understanding the goals and impact of their activities upon the finances of the organization. By approaching your marketing activities with a financial perspective you force clarity around what marketing is supposed to be achieving, identify measurable goals, and ensure you’re getting the most value from your efforts.

If your organization is using break-even or contribution analysis I’d love to hear how its working for you. What challenges have you faced in going through this process? What has happened as a result of adding a financial perspective to your marketing?