This is the second of four case studies on how associations are using business intelligence, about which I presented at a recent ASAE conference. There are a lot of details to these case studies, but since this is a blog, I’m going to keep this at a high level.
When Steve Doran arrived at NACUBO, he learned that NACUBO was investing about $19,000 per conference to sell 400 registrations. With a background in direct mail marketing, Steve felt confident he could lower that investment and still fill the 400 seats. Using data that Steve gathered from multiple sources within NACUBO, he was able to reduce his direct mail investment to around $3,000, while still filling all the seats. That was a direct reduction of costs of nearly 85%! So how did he do it?
In a nutshell, Steve developed a five-tiered system that classified his customer base (by organization) by their level of engagement. Using data points from 12 different areas within NACUBO (e.g., attendance at the NACUBO annual meeting, listservers, and benchmarking studies), Steve weighted each of these points of participation and created a total score for each organization. The results were pretty remarkable. Steve determined that of his 10,000+ universe of organizations, more than half were not participating at any appreciable level. Yet up to this point, NACUBO continued to market to them as if they were good buyers.
As a smart marketer, Steve knew that this was the first group to eliminate from future mailings. And while Steve met with some resistance (“What do you mean we’re not going to market to everyone?”), the results certainly speak for themselves. As noted above, NACUBO has cut their marketing expenses by more than 85%, a net savings of over $75,000 in the first year of this program.
I should note here that Steve did not use any fancy business intelligence software beyond an Access database that he built himself. And all of the data he used was pulled from sources within NACUBO.
What I’m most impressed with about this case study is that Steve did this without any fancy software, and he was able to convince the powers that be that marketing to everyone in the same manner was costly and ineffective. By determining who his best customers are, Steve was able to cut his costs and increase his marketing effectiveness.