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

2

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.

3

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.

4

What are key performance

trends?

5

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.

6

Case Studies

7

National Museum of the

American Indian

8

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.

9

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:

10

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

11

$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.

12

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

13

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

14

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

Email

DM andEmail

DM, TMand Web

DM andWeb

DM Only Email andWeb

DM andTM

Income/Member Average Gift Retention

15

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.

16

National Museum of African

American History and Culture

17

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.

18

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

19

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

20

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.

21

-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.

22

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)

23

• 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

24

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.

25

Friends of the Smithsonian

26

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.

27

• 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

28

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

29

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

30

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%

31

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

32

$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.

33

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.

34

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.

35

Wrap Up

36

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?

37

Questions?

38

Thank you!

David SaundersDirector of Membership

National Museum of the American Indian

saundersdf@si.edu

202.633.6602

Edison WatoDirector of Membership

National Museum of African American History

and Culture

Watoe@si.edu

202.633.9539

John PerellDirector of Direct Response and

Shared Services

Smithsonian Institution

PerellJ@si.edu

202.633.2042

Allison PorterPresident

Avalon Consulting Group

allisonp@avalonconsulting.net

202.429.6502