My 1st 2014 Brain Teaser: I’m in Love With 'Campaign Influence'
Happy New Year! That's right, I haven't gone away — just took a few weeks off at the end of the year to clear my brain and get ready for a fantastic 2014. With that said, I'm going to come out of the gate challenging all you marketers and even analysts with a brain teaser. I had to read this whitepaper three times to make sure I understood the formulas correctly — but I'm in love with the concept of "Campaign Influence."
In a nutshell, this is right up the customer/donor relationship management (CRM) alley. In other words, if you believe in CRM, keep reading. If you can't say you believe in CRM — but you do believe that a constituent is influenced by all the experiences and touches from an organization and those affect the giving decision process, keep reading. If you like brain teasers and like to be challenged, keep reading. And, if you want to really understand what is "next" when it comes to really applying proper ROI metrics to your marketing, definitely keep reading.
In this whitepaper by Full Circle CRM, Data-Driven Marketing Is Here to Stay, the authors dive in to the limitations of how we have been calculating ROI over the years. Granted, the paper starts out talking about things that happened in the 1990s, but it quickly gets pretty detailed and very serious about how the current ROI calculations only look at part of the picture. Also, be prepared: This whitepaper is really focused on business-to-business (B-to-B), but I don't care and you shouldn't either. Not only does it still apply for nonprofits; I argue it is even more important due to how we tend to do budgets.
Here's the general concept:
- We currently measure ROI based on the cost of a campaign and the revenue generated by that campaign. If we spend $10,000 on a campaign and it raises $50,000, then we would calculate ROI this way: ($50,000 - $10,000)/$10,000 = 4. In other words, for every dollar spent on the campaign it returned $4 to the organization.
- The ROI calculation is correct. It is accurate math. But what if the campaign was not the only thing that influenced the giving decision? In other words, what if there were several touches that occurred within a specific time frame in and around the direct ask that resulted in the donation? Is it possible that those touches influenced the actual decision to give?
- If you can agree that there is really something true about bullet two above, then you have to wonder how much influence something might have on the decision-making process. For example, what if within two weeks of the direct fundraising ask from a health charity, the constituent received a newsletter with a patient survival story that highlighted the role of the organization and an e-mail that provided the latest statistics about the fight against the disease and the progress being made because of donor dollars? Wouldn't a marketer believe this helped drive/influenced the giving decision? In reality, we know it is the case.
- The challenge comes in how you calculate "influence." In the whitepaper, it provides several methodologies for how marketing officers in the B-to-B world work through this calculation. But, in the end, to understand true ROI you have to know if the decision was influenced by other marketing touches, and those costs (or a weighted portion) need to be included in the costs to drive the revenue.
Now, for all of you who might be rolling your eyes right now (and I know some of you are just about to click and close this blog post right now), I urge you to really think through this. Why? Well, how many times have you had to kill marketing touches in your plan because they were focused on relationship building or awareness — but to the fundraising spreadsheets they looked like they didn't make any money. Oftentimes newsletters fall into this category, and marketers and fundraisers are stuck trying to understand what kind of impact the newsletter not being sent will have on their giving metrics. Trust me, these marketing touches are critical to the decision-making process.
And yes, I realize that if you add in costs to your current spreadsheets that your metrics for cost per dollar raised will go up and your net revenue will go down — but no one says you have to really report this way. What I'm saying is that you need to understand the influence of these other marketing touches that are helping your fundraising campaign. Whatever you do, don't believe that your stand-alone fundraising pieces are doing it all on their own!
Take the time to understand what "campaign influence" really is. Don't change all your fundraising reports. Don't start reporting different numbers to your chief financial officer or chief development officer. But, by all means, take the time to understand what "success" and true ROI really are across your campaigns.
The nonprofits that will survive and thrive from here on out are the ones that most effectively target and scale their efforts.
Vice President, Strategy & Development
Eleventy Marketing Group
Angie is ridiculously passionate about EVERYTHING she’s involved in — including the future and success of our nonprofit industry.
Angie is a senior exec with 25 years of experience in direct and relationship marketing. She is a C-suite consultant with experience over the years at both nonprofits and agencies. She currently leads strategy and development for marketing intelligence agency Eleventy Marketing Group. Previously she has worked at the innovative startup DonorVoice and as general manager of Merkle’s Nonprofit Group, as well as serving as that firm’s CRM officer charged with driving change within the industry. She also spent more 14 years leading the marketing, fundraising and CRM areas for two nationwide charities, The Arthritis Foundation and the American Cancer Society. Angie is a thought leader in the industry and is frequent speaker at events, and author of articles and whitepapers on the nonprofit industry. She also has received recognition for innovation and influence over the years.