Nonprofit Performance 360 Magazine Vol 4 No 4

If your marketing doesn’t trigger a relevant conversation, it’s not marketing; it’s a waste of money. Relevance is the key. I can get you conversations all day long: “$100 gift card when you contact us!” That probably won’t attract the people you want in your organization. The best marketing provides prospects with outcome-based education. It teaches customers how to get involved and benefit from what you offer. Every sustainable, scalable nonprofit has a formal marketing plan. These plans demand I.T. to implement, track, mine, and manage prospect data. A word of caution: don’t let an implementation expert drive your marketing objectives. Many an organization has wasted massive sums asking a so-called social media expert to run their marketing. Tip: You reap in membership what you sow in marketing. Marketing KPIs include the number of conversations generated, the quality of the conversation (are those enquiring qualified?), and the signup cycle time (where members are in their personal journey when they ask for a conversation). Ask yourself: On a scale of one to ten, how effective is your marketing? If you don’t have a formal marketing plan, give yourself one. Sales that Facilitate Mutually Profitable Transactions Yes, sales. Even though you’re a nonprofit, you must make sales. If you’re struggling, you probably don’t have enough sales or your organization has an aversion to the concept of sales. Even if you’re a religious organization, you must have a sales function, although you may call it something different, such as membership coordinator. Sales are the member-centered conversations that fill in the information gaps, organize the details, eliminate their concerns, and make sure that you are the only desirable choice. Sales is based on understanding prospective member motivation, mapping that to your offering, and building a trusted relationship. (More about this in a future article.) I use the word facilitate because the notion of closing sales is false and narcissistic. Unless you have signature authority on

your member’s bank account, there is only facilitation. Transactions must be mutually profitable, or someone is getting robbed and the relationship isn’t sustainable. Your members want you to be successful. They want you to stay in business because you are an important part of their life. While they don’t want to be gouged, they’re willing to pay you for a fair return and expect you to cover your expenses (and then some, for expansion) on every project you undertake. Every sustainable and scalable organization has a formal sales strategy, complete with a well-defined culture, formal sales methodology, sales management system, and on-going sales reviews. Sales KPIs include conversation to conversion ratios, and member purchase depth of the organization’s offerings. Ask yourself: On a scale of one to ten, how effective is your sales culture? If you don’t have a defined sales culture, give yourself a one. Service that Earns Member Loyalty Until your members experience you, there is no loyalty. When members believe that they got what they paid for and nothing more, there is no loyalty; it was simply a fair exchange. It’s when members feel that they got more than they paid for, usually in insight and a better lifestyle, that they feel like they hit the jackpot. Tip: Until you deliver beyond what a member expects and paid for, there is no loyalty. Member service is the investment that you make in the next membership renewal or return visit. You might consider it to be marketing to existing members, a worthwhile investment because you’ll make more money on the second transaction than you will on the first. Member service drives the most desirable of marketing activity: referrals. Yet, referrals are earned. Teach and motivate your member services people to harvest referrals and they’ll become one of the most profitable parts of your member acquisition system. Service KPIs include percentage of members that repeat purchase or renew membership, member satisfaction scores, and the number of referrals generated.

Ask yourself: On a scale of one to ten, how effective is your membership service? Operations that Scale with Economic Cycles We’ve just gone through an era where organizations crashed and burned because of an economic downturn. Many failed because they couldn’t downsize fast enough.This was a case where efficiency failed and flexibility had real value. We see this in the number of churches closing as members opt to worship with alternative methods in alternative locations. Tip: You can thrive during good times and bad if you can flexibly scale with varying demand. Members are willing to pay slightly more for flexibility, including the ability to change how much they consume, what they consume, and when they consume it. Savvy execs attempt to outsource as much of their production as they can, converting much of their fixed capital costs to variable operating expense. Operations KPIs reflect the ability to make rapid changes, plus efficiency of the processes. Ask yourself: On a scale of one to ten, how flexible is your operational infrastructure? Finance that Controls Cash Flow and Funds the Future Cash flow is king, as the old business mantra goes. Without a solid cash flow and working capital management system in place, including tying expenses to operations, a nonprofit operates with a risky business model. This includes government and education organizations because they have tomatch cash outflow with tax or tuition revenue inflows. If they can’t, they must borrow money, bringing a whole new set of complexities, because the source of funds determines the business model. Tip: Cash flow is king. If you want full control of your destiny, you’ve got to self-fund your operation . A common long-term business challenge is declining margins over time as organizations cut pricing in an attempt to compete with new market entrants. Many successful organizations have crashed and burned when revenues and margins eroded and

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