06 Oct 2023 Is Your Association Marketing Working? Techniques for Measuring ROI
No matter what kind of marketing your association or nonprofit does, you want to know if it’s actually effective. Otherwise, you’re wasting your money and chasing results that never come by repeating mistakes. Here are some methods that will help you get a better handle on your marketing effectiveness, so you can either continue with successful campaigns or change your strategy for better outcomes.
Common Marketing Campaign Challenges
Whether you’re emailing people or sending them print mailings, you probably have a number of questions that go unresolved after your marketing initiatives, like:
- Did the intended recipient get or open your communication?
- Was a particular campaign effective, or did you get results from layers of multiple campaigns?
- Did your association reap other less tangible benefits than a purchase, like greater awareness of your organization and its mission (branding)?
- Should you increase or decrease your marketing budget in the future?
- How are your marketing campaigns standing up to those of your competitors or to industry standards?
Metrics for Measuring ROI
Prior to implementing any techniques for measuring return on investment, make certain you have metrics in place to make your data meaningful. Falsely inflated metrics — known as “vanity metrics” — aren’t helpful. For instance, simply sending a huge number of membership letters tells you nothing compared to knowing how many people opened your email, how many clicked through to your website, and how many purchased membership.
Simple ROI is usually calculated as a percentage and is equal to: (Sales growth – marketing costs) / marketing costs. You can measure your ROI per campaign, per year, or by how it compares to similar organizations.
You may also wish to calculate customer lifetime value or what a new member brings to your organization over the length of your relationship. Usually this figure is derived by multiplying the customer value (how much they spend in a year) by the average customer lifespan.
Cost per acquisition is also a handy figure to know. This reflects what you typically need to spend to bring on a new member or get someone to purchase admission to a major event. The less you spend on acquisition, the more profit your organization makes, so you want this number to be as low as possible.
It can be challenging, though, to calculate this number. Was it only the last email campaign that persuaded the member, or were they slowly converted by multiple campaigns and lead nurturing over several years? You can usually assume that if someone has been in your funnel for a long time, you should add the sum of all marketing efforts directed towards that person to calculate the cost per acquisition.
So, if you hypothetically spend $1,000 on each membership drive in which you target 4,000 people, you spend $0.25 per person, per campaign. If it takes eight campaigns to bring in a new member, your cost per acquisition is $2.00. This number is going to vary from person to person, so you’ll likely want the average for all new members for any given quarter or year.
Tracking Methods That Go Beyond Email Open Rates
If your association uses a lot of print mail campaigns, it can be more difficult to track your success rates. Here are some techniques you can use for both print and email to narrow down which campaigns are working and what their results are:
- Ask recipients to take a specific action, such as signing up for a free course that is only available to the targets of your campaign.
- Use a tracking code to identify mailing recipients, such as a promo or discount code.
- Send recipients to a unique URL to register for events or make a purchase.
- Have recipients use a QR code that takes them to a specific landing page or app where they can sign up for or purchase something.
- For people who prefer telephone communication, create a unique phone number recipients call for your desired action, like enrolling in an event.
If you have several ideas for a marketing campaign and aren’t sure which are the best to use regularly, you can experiment to see which brings a better return on investment. With A/B testing, you change only one element between two mailings and see which variable performed best. With multivariate testing, you can trial vastly different campaigns and compare your results by variables or combinations of variables.
If your association needs help with email campaigns, membership drives, or financial services, Jaffe Management can give you cost-effective assistance that lets you leverage high ROI on your marketing. Call us at 212-496-3155, or contact us online to tell us more about your organization.