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1Cover Page
How Cutting-Edge Data Analytics Can
Revolutionize Your Membership Program
2016 AMMC Conference
Presented April 12, 2016
Avalon Consulting Group, Inc.
All rights reserved, 2016
Avalonconsulting.net
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Here with you today…
David Saunders – Director of Membership – National Museum of the American Indian
– NMAI is committed to advancing the knowledge and understanding of the Native cultures of the Western Hemisphere, past, present, and future, through partnership with Native people and others. The Museum works to support the continuance of culture, traditional values, and transitions in contemporary Native life.
Edison Wato – Director of Membership – National Museum of African American History and Culture
– The National Museum of African American History and Culture will be a place where all Americans can learn about the richness and diversity of the African American experience, what it means to their lives, and how it helped us shape this nation. A place that transcends the boundaries of race and culture that divide us, and becomes a lens into a story that unites us all. Scheduled to open on September 24, 2016, the Museum is under construction on the National Mall in Washington, DC, on a five-acre tract adjacent to the Washington Monument.
John Perell – Director of Direct Response and Shared Services – Smithsonian Institution
– Founded in 1846, the Smithsonian is the world's largest museum and research complex, consisting of 19 museums and galleries, the National Zoological Park, and nine research facilities. At the heart of this work are the Friends of the Smithsonian, who sustain our commitment to celebrating our nation’s history, our art and science, our inventions – and preserving them for future generations.
Allison Porter – President – Avalon Consulting Group
– Avalon is a full-service direct marketing fundraising agency. Since 1997, Avalon has helped our clients raise millions of dollars to achieve their visions for a better world—while building relationships with people who share their passion and support their important causes.
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In today’s session…
Through actual examples, learn critical ways to view your donor and member
data to inform your marketing strategy.
Learn how to recognize how underlying trends
have changed over time, and how they vary by
organization and strategy.
Identify key metrics and performance indicators
that are relevant for comparison, and what
those comparisons tell you about the health of your file.
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What are key performance
trends?
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Comparing key metrics and critical analytical views
will give you a deeper view into the health, future
performance, and potential of your member file.
RetentionList return on investment
File composition
File trajectory and impact of
acquisition
Member value
Cross-channel analysis
Major donor pipeline
Metrics should be compared over time, and to other
organizations, when evaluating their significance.
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Case Studies
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National Museum of the
American Indian
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Situational Analysis:
• Membership program established in 1991
as part of the Museum’s capital campaign
to open the Cultural Resources Center and
the Museum on the National Mall.
• The Museum opened in September 2004.
• Current membership of 40,000 households
nationwide.
• 70% of members live outside the DC and NYC
metropolitan areas.
• Members and revenue increased dramatically
through the opening of the Museum, and then
experienced a sharp decline. NMAI has been
hard at work to stabilize the program since
this time.
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After the Museum opening, NMAI experienced a decline
in revenue both due to the event and a decrease in
acquisition investment.
• This view shows the impact of acquisition year over year.
$0.0
$0.5
$1.0
$1.5
$2.0
$2.5
$3.0
$3.5
$4.0
$4.5
$5.0
Millions
2015201420132012201120102009200820072006200520042003200220012000199919981997199619951994
Museum Opening
Key Trend #1:
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After reduced acquisition, NMAI strategically reinvested
in direct mail to rebuild the file.
Key Trend #2:
0
2,000
4,000
6,000
8,000
10,000
12,000
FY08 FY09 FY10 FY11 FY12 FY13 FY14 FY15
Direct Mail Web Email White Mail
Reinvestment
New Joins
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$0.0
$0.5
$1.0
$1.5
$2.0
$2.5
$3.0
$3.5
2007 2008 2009 2010 2011 2012 2013 2014 2015
Millio
ns
2015 2014
2013 2012
2011 2010
2009 2008
2007 2006
2005 2004
2003 2002
2001 2000
1999 1998
1997 1996
1995 1994
1993 1992
1991
Join Year
Growth: 2% Growth: 0%
This investment has paid off – revenue has started to
grow after years of decline.
• 2015 represents stability with the year before.
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After reinvesting in acquisition, overall retention
increased slightly in FY15 due to an increase in multi-
year retention – a step in the right direction for the
program.
• First-year retention declined slightly. This metric is now on the low end of the typical range: 20-40%.
Key Trend #3:
57.0%
71.9%67.7%
24.0%
10%
30%
50%
70%
90%
FY08 FY09 FY10 FY11 FY12 FY13 FY14 FY15
Overall Overall w/Reinstates
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NMAI has used cross-channel views to identify trends
by channel and diversify revenue since the Museum
opening.
Key Trend #4:
$0.0
$0.5
$1.0
$1.5
$2.0
$2.5
$3.0
$3.5
FY07 FY08 FY09 FY10 FY11 FY12 FY13 FY14 FY15
Mill
ion
s
Mail TM Web Email
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Members giving through multiple channels show higher
retention and income per member.
Key Trend #5:
$87.36
$78.66 $72.90$65.92
$58.20 $57.36 $53.88
0%10%20%30%40%50%60%70%80%90%
$0
$20
$40
$60
$80
$100
DM, TM,Web and
DM andEmail
DM, TMand Web
DM andWeb
DM Only Email andWeb
DM andTM
Income/Member Average Gift Retention
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Moving forward:
• NMAI will continue to build on current progress through
added investment.
• As the program grows, regular reviews of metrics like
retention are key to maintaining file health.
• NMAI continues to explore options to increase multi-
channel giving and build value within the current file.
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National Museum of African
American History and Culture
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Situational Analysis:
• Program established in September 2009 to
build a membership base to
support projected Museum opening
on September 24, 2016.
• NMAAHC has grown dramatically since that
time, reaching 101,789 cumulative members
and a high point of 48,282 active members as
of April 2016.
• The program will continue to grow through the
September 24, 2016 opening.
• Maintaining a strong and stable base of
membership support beyond 2016 is a
priority for the new Museum.
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NMAAHC’s membership program has increased steadily
since its inception of the program.
• Steady and generally increasing acquisition investment has allowed the
program to grow year over year.
Key Trend #1:
$0
$500,000
$1,000,000
$1,500,000
$2,000,000
$2,500,000
$3,000,000
$3,500,000
$4,000,000
$4,500,000
2009 2010 2011 2012 2013 2014 2015
2009 2010 2011 2012 2013 2014 2015
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Multi-year members continue to grow in quantity, a sign
of a healthy and maturing program.
• Multi-year member counts have trended upwards since FY12.
The large influx of new joins in FY15 has boosted the member file
to new highs.
Key Trend #2:
0
10,000
20,000
30,000
40,000
50,000
FY11 FY12 FY13 FY14 FY15 FY16
Multi-Year Single-Year
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0% 100% 200% 300% 400% 500% 600%
NAACP Leg Def & Ed Fund
AICR AFRICAN AMERICAN CONTRIBUTORS
Multibuyers
National Museum of the American Indian
NAACP
Sierra Club
Negro Leagues Baseball Museum
Native American Rights Fund
Common Cause
Environmental Defense Fund
Wash Spectator
American Heart Assn
African American Democratic Contributors
League of Women Voters
African American High $ Democrats
Black Literary Club
Black Tie Democrats
Key Analysis: List Return on Investment Assessment
• Because upfront performance
and long-term value are not
always aligned, NMAAHC
utilizes return on investment
by acquisition list to
strategically build the
membership program.
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-40% -30% -20% -10% 0% 10% 20% 30% 40% 50% 60%
Poster PR
Slavery PR
Plypak PR
Survey PR
Bookmark PR OSE Test
Bookmark PR
Key Analysis: Acquisition Package Return on
Investment
• NMAAHC has tested a number of acquisition
packages during the program start up.
Assessing long-term value allows NMAAHC to
better make decisions about the growth of the
program.
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Using key analytical tools for guidance, NMAAHC has
gradually increased member value since the start of the
program.
$0$20$40$60$80
$100$120$140$160
Yr 1 Yr 2 Yr 3 Yr 4 Yr 5
Direct Mail Joins
FY09 FY10 FY11 FY12 FY13 FY14
$147 avg. (Year 5)
• Member value by year 5 is strong compared to other organizations.
Key Trend #3:
$0$20$40$60$80
$100$120$140$160
Yr 1 Yr 2 Yr 3 Yr 4 Yr 5
Web Joins $205 (Year 5)
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• NMAAHC is using forecasting to predict the trajectory of the file and
anticipate future changes. Based on this analysis, investment strategies
will be outlined to guide the program.
$0
$500,000
$1,000,000
$1,500,000
$2,000,000
$2,500,000
$3,000,000
$3,500,000
$4,000,000
0
5,000
10,000
15,000
20,000
25,000
30,000
35,000
40,000
45,000
50,000
FY11 FY12 FY13 FY14 FY15 FY16 FY17 FY18 FY19 FY20
continuing reactivating 2nd year new Gross Revenue Net Revenue
Museum opening end of
FY16
ME
MB
ER
S
RE
VE
NU
E
Key Analysis: Long-range forecasting to predict
future trends
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Moving forward:
• NMAAHC will continue to watch key performance trends
as the file continues to grow.
• Using analytics, NMAAHC has an opportunity to anticipate
and address future trends to maintain stability during the
volatile window after the Museum’s opening.
• NMAAHC will be focusing on member retention strategies
to preserve the strong base of the program after the
opening of the Museum.
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Friends of the Smithsonian
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Situational Analysis:
• Friends of the Smithsonian is a mature and
robust membership program with a
member history that stretches to before
1990.
• Currently, there are nearly 80,000 active Friends.
• After years of growth, the program has been
steady in recent years. FOS has developed a
structured “donor track” to help reinvigorate the
file.
• The Friends program is actively seeking ways
to return to a pattern of growth through
increased acquisition of both members and
donors.
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• A decrease in the Member program revenue has been offset by growing revenue in the Donor
program.
• While not near the level of member program revenue yet, the donor program has seen sizable
growth with increased investment in the acquisition of donors. JSS program is also growing.
Income by Fiscal Year – Including JSS ($2,500+)
Key Finding #1: Revenue from Friends has been generally stable
over the last five years.
Revenue
$0
$2
$4
$6
$8
$10
$12
$14
$16
2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015
Mill
ion
s
Members JSS Donors
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Friends by Fiscal Year – Includes JSS, $2,500+
Key Finding #2:The Friends file count has been relatively stable, with
2012 an anomaly due to added acquisition.
• As member counts have declined in the past three years, donors have grown
significantly in that same timeframe.
• With 539 members, JSS represents a small portion of the total file.
File Count
0
10,000
20,000
30,000
40,000
50,000
60,000
70,000
80,000
90,000
100,000
2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015
Members JSS Donors
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Key Finding #3:27,000 new Friends (Members and Donors) needed each
year for file stability.
Projected File Size for Friends – based on FY15 and FY16 Budgets
• FY15 program resulted in a slightly growing file. Current FY16 budget projects
continued growth. Additional investment is needed for more aggressive file growth.
-
10,000
20,000
30,000
40,000
50,000
60,000
70,000
80,000
90,000
FY10 FY11 FY12 FY13 FY14 FY15 FY16
New
Multi
Projected
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0-12 Month Retention (Members Only)
Key Finding #4: Donor program metrics are solid compared to other
Smithsonian units and industry at large.
0%
10%
20%
30%
40%
50%
60%
70%
80%
Overall Retention First Year Retention Multi-Year Retention
Retention
FOS Members FOS Donors NMAI NMAAHC
• FOS Member program metrics are exceptionally strong compared to other SI units
and the industry at large.
Industry Ranges
FY Retention:
20-40%
MY Retention:
50-70%
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Income by Fiscal Year – Including JSS ($2,500+)
Key Finding #5: Donors are not yet as valuable as Members.
• However, Donors are slightly more responsive with 1.49 gifts per Donor compared to
1.43 gifts per Member.
$130.42
$172.20
$69.20
$94.20
$0.00
$20.00
$40.00
$60.00
$80.00
$100.00
$120.00
$140.00
$160.00
$180.00
$200.00
Average Gift Revenue Per Friend
Members Donors
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$0
$2
$4
$6
$8
$10
$12
$14
FY09 FY10 FY11 FY12 FY13 FY14 FY15
Mil
lio
ns
DM JSS ONLINE TM
• As a percentage of the total revenue, the online channel has increased
consistently; 6% (FY09) to 9% (FY15).
Note: JSS revenue includes all JSS DM, TM & Online
Income by Channel (Members/DNM) – all revenue, no smoothing
Key Finding #6:FOS has increased the diversity of Friends revenue by channel
since 2009, yet direct mail is still the primary revenue channel.
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Key Finding #7: JSS and online revenue are key areas for revenue growth –
and both are driven by the Friends program.
First Gift Amount for JSS Members
• 62% of JSS members started with a Friends gift of under $150.
• Average years for joins under $2,500 to upgrade to JSS is 13 years.
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Moving forward:
• With the goal of stability and then growth, the Friends
program will use this analysis and more to project future
trends and inform decision making.
• Strong donor-level metrics (retention, long-term value)
indicate added investment is wise and will return quickly.
• Regular (quarterly and annual) review of key performance
metrics allows FOS to keep tabs on key trends and
changes as the new donor program evolves.
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Wrap Up
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Quarterly and annual
oversight of key metrics
through dashboards and full file analysis.
Identification of changing performance
trends.
Continuous goal
evaluation, resetting, and forecasting.
Education and
reporting to
leadership.
REPEAT.
How do you do this for your program?
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Questions?
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Thank you!
David SaundersDirector of Membership
National Museum of the American Indian
202.633.6602
Edison WatoDirector of Membership
National Museum of African American History
and Culture
202.633.9539
John PerellDirector of Direct Response and
Shared Services
Smithsonian Institution
202.633.2042
Allison PorterPresident
Avalon Consulting Group
202.429.6502