Marketing and Management Tips
For Tough Economic Times
The first thing I would do in a crisis period is to appoint
a cost reduction task force, to develop a recession business
plan. Please don't let it be only in the hands of the finance
department. They will cut everything that counts - and tell you
to stop marketing, when marketing is the only prop that you can
turn to, to sustain demand.
- Philip
Kotler, Kotler Marketing Group
For many organizations, recession and the long shadow cast by
September 11 have replaced the rosy glow and giddy expansion
boom of recent years with a nervous pallor of uncertainty. In
Boston, New York, Chicago and San Francisco, museums have already
announced staff cuts or postponed building plans. And in an October
survey
of more than 800 performing arts groups conducted by AMS Research
and Planning, nearly 60 percent of respondents indicated that
they're paring their budgets by 5 to 25 percent.
Not all museums are hurting, by any means, but most are feeling
at least a bit feverish at the thought of what might be in store.
With governments cutting funding, corporations scaling back their
giving, foundation dollars flattening, security costs rising
and tourism still sputtering, it's no wonder many cultural institutions
are breaking out in cold sweats.
If yours is one of them, here are 19 marketing and management
strategies to help you navigate through tough economic times.
Listen Before You Cut
Trimming expenses may very well be necessary, but where should
you cut? Before you decide, take Kotler's advice and form a cost
reduction task force. Large institutions may need to appoint
a formal committee for this, but most organizations can accomplish
the same thing just by really listening to staff and volunteers.
The people in the trenches know where the fat is. Ask them.
By doing so, you'll not only discover cost-cutting measures
you hadn't even thought of, you'll also achieve more buy-in for
belt tightening. Dieting is, after all, always easier if we at
least get to help choose the menu.
Apply the Customer Value Rule
When deciding which overhead costs to trim, take another tip
from Kotler, coauthor of Museum
Strategy and Marketing: "The rule for overhead is to
apply the question: 'Does it add customer value?'" If it
does, think twice before you swing that knife.
Resist the urge, for example, to make immediate cuts in visitor
services and popular programming, or to chop customer service
training. Instead, first get aggressive about improving your
purchasing procedures. Make better buying decisions in all areas
of your operation. Get new bids from suppliers, change vendors
if necessary, seek more in-kind contributions, barter. And consider
banding together with other institutions to make cost-saving
bulk purchases.
Step Up Your Marketing, Don't Cut
It
Since marketing is still viewed with ambivalence by many nonprofits,
it's often the first thing to be cut when money gets tight. But
that's a mistake. This is the time when you need to increase
your marketing efforts, not eliminate them. For perspective on
this same inclination in the for-profit world, read Alf
Nucifora's look at what happened to companies who cut back
on marketing and advertising in past recessions.
Do a Lot of Little Things Right
The tendency we all have in tough times is to search
for the one magic bullet that will make everything better. But
magic bullets are hard to come by. Most positive turn-arounds
come about as the result of finding lots of small solutions,
not one big one. The Children's
Museum in Boston can vouch for that.
When the Big Dig, the city's massive
road construction project, sent visitation at the institution
into a serious tailspin, there were no magic bullets on the horizon.
Instead, the museum concentrated on making a number of small
changes that added up to a big recovery. Among them, discounted
parking and a shuttle service to help visitors cross the construction
gauntlet, and new exhibits designed to attract older children.
In a November Boston
Globe interview, museum president Lou
Casagrande said that attendance "rebounded 48 percent last
summer" as a result. "We got clobbered a year before
our colleagues did," and recovered "not because of
a blockbuster, but because we did a lot of little things right."
Fix the Leaks
When times are good, it's easy to overlook the problems caused
by letting things slide. If mailings aren't done on time, if
data entry gets behind, so what? When cash flow is sufficient,
the income leaks these practices create just seem like trickles.
It's not until times get tight that we realize we've actually
created gushers.
Membership is a prime example. "If your organization
is not entering new members within two weeks after they join,"
William Dodd of Dodd,
Smith Dann, Layher points out, "their first year will
be a 13-month year." And if your renewal mailings don't
start early enough, you'll likely not receive renewal checks
until after expiration dates have passed -- adding a month or
two to the next membership year as well.
You also set yourself up for unnecessary income leaks when
you don't thank donors promptly. In a test conducted by Penelope
Burk, author of Thanks!
A Guide to Donor-Centred Fundraising, 14 months after new
donors had been called and thanked for their initial gifts within
24 hours of receipt, their subsequent contributions were 42%
higher than those in the control group, who hadn't been thanked
promptly. Can you really afford not to fix the leaks?
Get Creative With Corporate Partners
With so many industries hurting right now, corporate dollars
are dwindling. But there are ways your corporate partners can
help even if they can't write you a check. Get creative about
what you ask for.
Stephen Brand of EnterprisingMuseums.com
offers these innovative ideas: Ask corporate partners to allow
your employees to attend their training programs; become part
of their corporate buying power (travel, office supplies, power,
recruitment, etc); tag onto their existing advertising; and ask
their experts to volunteer time working with your team to help
cut costs or leverage marketing.
You might also explore establishing partnerships with companies
in industries that are still doing well despite the recession
-- housing, health care, child care, home furnishings and housewares,
to name a few.
Consider Outsourcing
Are there tasks that could be accomplished more cost effectively
by outsiders? Could outsourcing free up more of your staff's
time for mission-enhancing activities? Is there an income stream
you're missing out on because you don't have enough people to
market/operate it? It's time to take a look at new possibilities.
One museum I worked with, for example, had abandoned its once-successful
facility rental program. Too much staff time was required to
show spaces to prospective renters and it was hard finding people
willing to work evening functions. We solved the problem by working
out a contract with a local event planner who handled all marketing
and operational details of the program in exchange for a commission.
It took some effort to find the right person and craft the right
agreement, but reviving that income source was well worth it.
Encourage More Add-on Sales
If visitors enjoy their experience at your institution they naturally
want to "buy more of it" -- so be sure to give them
that opportunity. There are probably a number of places in your
operation where you could be encouraging more add-on sales. Look
for them. Are you offering related books at classes? Selling
disposable cameras at your admission desk? Making it a point
to remind guides to always recommend a visit to the museum store?
These are small gestures, but if you initiate enough of them
they can make an important contribution to your organization's
financial health. You'll find more add-on sales tips in my article
Would You Like Fries With That?
Continued >>
Copyright © 2001 Katherine Khalife All rights
reserved.
For reprint permission, please e-mail info@museummarketingtips.com
Katherine Khalife is a writer and consultant specializing in
museum and Internet marketing, customer service and heritage
cultural tourism. See the Services
section for information about her workshops and other services
or e-mail her at kkhalife@museummarketingtips.com
