{"id":4318,"date":"2015-10-21T02:00:08","date_gmt":"2015-10-21T06:00:08","guid":{"rendered":"http:\/\/www.artsjournal.com\/engage\/?p=4318"},"modified":"2016-05-31T15:13:45","modified_gmt":"2016-05-31T19:13:45","slug":"measure-revenue-differently-cultivate-loyalty-collaboratively","status":"publish","type":"post","link":"https:\/\/www.artsjournal.com\/engage\/2015\/10\/measure-revenue-differently-cultivate-loyalty-collaboratively\/","title":{"rendered":"Measure Revenue Differently. Cultivate Loyalty Collaboratively"},"content":{"rendered":"

By Jill Robinson, TRG Arts<\/strong>
\nThis post is part of a series of collaborations with TRG Arts and is cross-posted to their blog <\/em>Analysis from TRG Arts<\/em><\/a>.<\/em><\/p>\n

\"Photo

Photo by Neo Wang<\/a> (CC BY-NC-SA 2.0)<\/p><\/div>\n

Arts Journal<\/em> blogger Doug Borwick recently wrote a post on the role of marketing and development departments<\/a> that captured my attention. In the following quote he summarizes an issue that I\u2019ve been thinking about for a long time:<\/p>\n

In the nonprofit world, marketing and development have been viewed as two different disciplines. Marketing has focused on messages to external publics and sales. Development has focused on messages to external publics and contributed income\u2013grants and donations\u2026<\/em><\/p>\n

Do you see what I just did? It\u2019s an old professor thing to set up a question in the listener\u2019s mind. \u201cSo, if they both begin with \u2018messages to external publics,\u2019 aren\u2019t they pretty closely related?\u201d Bingo.<\/em><\/p>\n

Marketing and development are closely related. But there are differences. In strict transactional terms, marketing departments largely manage Business (arts organization) to Consumer (patron) relationships. On the other hand, development department work is both \u201cB-to-C\u201d (where the consumer is in the form of donors\/members) and<\/em> \u201cB-to-B\u201d (Business to Business, where the organization is managing relationships and income from foundations, sponsors and other funding agencies). Talk to any marketing or development professional and they\u2019ll tell you: the work is different in managing these different kinds of relationships and revenue streams.<\/p>\n

Business relationships versus consumer relationships. We work<\/em> differently based on the relationship type, but don\u2019t necessarily organize our teams or measure these differences in this way. Arts and cultural organizations budget for and measure earned income separate from contributed income. Why is this? Because we measure and manage the type<\/em> of income rather than its source.<\/p>\n

Usually marketing departments are wholly in charge of earned revenue and development, contributed income. But both departments have responsibility for revenue that is generated from individual patrons<\/em>. Any initiative to cultivate patrons becomes either a \u201cmarketing\u201d or \u201cdevelopment\u201d initiative. Budgeted separately and managed departmentally, there is no incentive to work together; often competition for resources, and even patrons, results.<\/p>\n

Is there another way? It\u2019s a good question\u2014one that TRG is getting more and more as leadership is challenged to work smarter in a changing market.<\/p>\n

One starting place might be this: Measure revenue differently. Splitting up revenue into earned vs. contributed further institutionalizes the marketing-development split. We\u2019ve recently written about a metric that we recommend tracking to honor patrons wherever and however they are investing in an organization. We\u2019ve deemed this \u201cpatron-generated revenue\u201d. More on that in the video below:<\/p>\n