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| How To Slice & Dice Your Marketing Budget |
- A Unique Perspective On Maximizing Your Dollars
David Ehrlich, President & Todd Harff, President |
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| Every association is constantly overwhelmed with solicitations to spend its limited marketing budget. The multitude of new e-commerce opportunities only adds to complexity of creating an effective marketing program. How can an association ensure that it is maximizing the return on its marketing investments? Well, the first thing is to step back and develop a sound marketing strategy. |
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| Focus on the Goal |
The most successful associations recognize that an effective marketing budget is not about spending money; it is about achieving clearly defined goals as economically as possible. Clear goals make it easier to sort through the countless opportunities to spend money. Associations charge their marketing departments with the dual responsibilities of increasing membership and generating non-dues revenue. By breaking these broad responsibilities down into specific targets, a marketing department can tie initiatives to quantifiable objectives and measure performance.
Additionally, detailed goals will help determine the necessary level of funding. For example, if a new member historically costs $100 and the target is 5000 new members, then the budget would be $500,000. If a secondary goal were to reduce the new member cost to $90, then the budget would be $450,000. By focusing on the desired outcome, marketing departments will channel investments into those opportunities that produce the highest return. |
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| Know The Environment
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Once an association is clear about its marketing objectives, the next step is to make certain that it really understands its members, prospective members and competitors. As far as members and prospective members are concerned, the three most important questions are: "What is the perceived value of the association?" "What motivates members?" And, "When are they most likely to act favorably?" Armed with the answers to these questions, a marketing department will know the most effective message, call to action, timing, and medium.
As far as competition is concerned, it is critical to know who they are, what their messages are and how they promote their organizations. One common mistake is defining the competition too narrowly. By understanding the perceived value members see in an association, it is easier to recognize the surprising number of substitutes members may have. Today the largest threat to associations does not come from traditional competitors but from the Internet. |
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| Use Other People's Money |
| Trying to achieve all of the marketing objectives will strain any budget. More and more organizations are using cooperative marketing to leverage their funding. Armed with a clear strategy and understanding of the target market, it is easier to find partners who have overlapping interests. Some organizations collaborate with competitors when it will reduce their marketing expense and bring existing members greater value. Others expand their existing affinity programs, making them proactive components in their new member recruitment programs. For a few associations, the majority of new members join due to affinity programs where the partner pays all of the marketing costs. Any association that is not actively seeking cooperative marketing opportunities is leaving money on the table. |
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| Drive Retention and Referrals |
| Another key consideration is recognizing that marketing is not just external to the organization. The most effective programs actively market to existing members and staff. This is a cost effective way to achieve three objectives: retention, referrals, and morale. Members that are constantly reminded of the value an association provides are more likely to renew as well as refer prospective new members. Not only are people who have been referred more likely to join, but also, they cost substantially less to reach than cold prospects. |
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| Measure Results |
Having designed a goal-oriented program, it is easy to measure results. While the plan will probably have been based on "rule of thumb" estimates, hard numbers will quickly support or refute the hypotheses. It is important to modify on the move.
As a final note, remember that the marketing budget is an overview plan that should change as new information becomes available. Managers that only rely on what worked in the past are unable to devote the necessary resources to new opportunities that may be more effective. Experimenting with new concepts and ideas is an integral part of effective marketing programs. Recognize that some ideas and campaigns will not be as successful as others. Learn from the disappointment and keep focusing on those goals. |
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