Transcript

Aubrey Bergauer: [00:00:00] Hi, everyone. Welcome to another episode of the Offstage Mic. I have to start this episode with some very big news. This has nothing to do with arts management or arts administration, or even the business side of the arts. But you guys, I'm getting a puppy. So by the time this episode drops, little puppy will already be here.

So, right now, you're hearing me all super excited and chipper and probably the reality though is like by the time you are listening to this, I'll be sleep deprived and mad that I'd already destroyed however many pairs of my shoes, but I don't care. I'm super excited. I have had puppy fever for About two years now.

And last year I was just traveling so much on my book tour, promoting run it like a business that life was just like really not conducive at all to having a puppy. And now there's still some speaking engagement and travel on the [00:01:00] books, but nothing like last year. And that's by design. And this has been actually a big goal of mine.

Now, if you read my book, you know, I talked about my last dog, Molly, and I promise this starts to tie into today's episode. I use a story about Molly and her food really to introduce concepts of the membership and subscription economy and how to increase subscription revenue. So today we are going to get at subscriptions and the membership economy from a different angle.

That's from the marketing side and specifically the marketing budget side of things. Without a properly fleshed out marketing budget, subscriptions and memberships, recurring revenue, will never reach their full potential for your organization.

So today we're talking about how do you plan your marketing budget? Because this is honestly an area where I see a lot of mistakes or [00:02:00] misconceptions shall we say, and those misconceptions are leading you or your arts organization to waste money on ineffective marketing. In other words, not spending money in the right places.

And I totally get it. The marketing landscape has changed a lot in the 20 years I've been in this business now. The way that so many of us, maybe even all of us or almost all of us listening here right now, were taught to do marketing, it worked at one point. That's why we did it that way. That's why we learned to buy newspaper ads and radio ads and bus boards and things that are both very expensive and hard to track.

And We are seeing audiences decline and not selling as many subscriptions anymore, and many of you not making your marketing sales goals.[00:03:00] 

So what do you do about this? How do you approach developing a modern marketing budget, especially in a world where everyone in the arts is trying to find ways to cut expenses in their budget? And marketing is often one of those places that gets slashed, right? How do we make every dollar work hard for us so we know exactly what it's doing, why it's in the budget, why we allocated it that way, and what return we expect to get from it?

That is what we are talking about in this episode.

I have so much helpful information to share with you that I have personally used over the years to create and develop marketing budgets from when I had my first head of marketing job. To later as chief executive overseeing how the marketing budget fits into the greater context of the entire organization to when I was a VP at a large institution over all of this stuff to now with all [00:04:00] of the organizations I work with all over the place and in my own business too.

So get off the puppy pee pads, y'all. Cause I am excited about marketing budgets too much. Okay. You get the point. I'm excited to share a lot of good info with you. And I even have a free budget tool. You can download to help you with everything. And I'm going to tell you how to get that later. Welcome to episode three of season five of the offstage let's do it.

I'm Aubrey Bergauer and welcome to my podcast. I'm known in the arts world for being customer centric, data obsessed, and for growing revenue. The arts are my vehicle to make the change I want to see in this world, like creating places of belonging, pursuing gender and racial equality, developing high performing teams and leaders, and leveraging technology to elevate our work.

I've been called the Steve Jobs of classical music and the Sheryl Sandberg of the [00:05:00] symphony. I've held off stage roles managing millions of dollars in revenue at major institutions. Been chief executive of an orchestra where we doubled the size of the audience and nearly quadrupled the donor base. And now I'm here to help you achieve that same kind of success.

In this podcast, we are sorting through data and research inside and outside the arts. Applying those findings to our work in arts management and bringing in some extra voices along the way. All to build the vibrant future we know is possible for our institutions and for ourselves as offstage administrators and leaders.

You are listening to the Offstage, Mic.

Hi everyone. Aubrey here. I wanna share a quick case study with you. About a year ago, Austin Chamber Music Center knew they needed to work on identifying prospective donors and building relationships with the donors They already had. Plus, they went through a leadership transition and knew they [00:06:00] needed to fundraise more and faster.

They came to Annual Fund Toolkit, who did a comprehensive analysis of their donor base, then developed a system for the organization to connect with those donors based on their needs and giving styles. They did all of this combining in person asks with email, social media, and direct mail. By the end of the fiscal year, their year to date fundraising had doubled compared to the year prior.

And that's just the numbers. They now also have a streamlined process for tracking and maintaining donor relationships going forward. How did they do all this? They did it with Annual Fun Toolkit. Annual Fun Toolkit is not just another consulting firm. What sets them apart is their laser focus on two critical challenges.

Improving donor retention, and growing the major gifts pipeline. This can be your organization too, because this is what Annual Fund Toolkit does every day. Their founder, Luis Diaz, is one of the most brilliant minds in fundraising I've ever met. The organizations that utilize Annual Fund Toolkit's advice and assistance are [00:07:00] coming out ahead.

To read the full case study, head over to get dot annual fund toolkit.com/acmc. That's get dot annual fund toolkit.com/acmc for Austin Chamber Music Center. Trust me, your donors and your mission will. Thank you.

I wanna start off with a question I recently got from a member of the changing the narrative community. They asked what percentage of an arts organization's budget should go toward marketing. They said it's way too easy to find other ways to spend what little we have.

Now, a lot of people can relate to this question. You may be one of them. It doesn't even matter if you are at a big organization or a small organization. The temptation is almost [00:08:00] always to focus your spending on other line items that may seem more essential than marketing things like People, for example, onstage, offstage, people are always the biggest expats in almost every industry, not just in the arts.

We spend a lot of money every year on the line for programming. That includes renting or buying the music if you're at an orchestra, chamber ensemble, chorus, or other music organization. Big line item for production. That's our stage hands sets in costumes. If you're an opera or a theater, we spend money on essential things like benefits, healthcare, and all of our software and tools.

We need our CRM programs, design programs, other IT infrastructure. So you go through all of that really important, pretty much essential stuff. And then it's very tempting at the end of the day to then say. Whatever's left goes to marketing.[00:09:00] 

Like suddenly marketing becomes this very nebulous, not concrete portion of the budget, and that's often I think at least part of why it often gets cut. Hence this member of the community rightfully asked me What percentage of an organization's budget should go to marketing? And the first thing I will say is that I have never ever Approached a marketing budget as a percentage of an overall budget.

Okay, so I know that's the question they're asking But that's never been how I've approached it way more important than the amount of money or the percentage of money Is how you are allocating it? So you could dedicate 30%, 40%, 50 percent of your entire budget to marketing and you could be spending it on the entirely wrong things and now you're just wasting money.

So again, a percentage is not the answer. Good marketing isn't caused by how much money you spend. It is [00:10:00] caused by spending it where your audience is. I got to say it again. This is so important. Good marketing is not caused by how much money you spend. Good marketing is caused by spending it where your audience is.

already is. So for example, sometimes people that could be arts administrators, that could be board members, even artists think spending money on radio or newspaper ads is good marketing, or that any marketing is good marketing. And Those channels are some of the most expensive channels. And so I think that some subset of those folks at least just then assume it's a good investment or something like it's expensive, therefore it's valuable to us.

And I just said, good marketing is not caused by how much money you spend. It is caused by spending it where your audience is. So, this is totally in the category I mentioned at the top. You were likely taught this way. You were taught the belief that those are the quote [00:11:00] unquote right channels to reach your audience.

Now, there's good reason for that. I said, go where your audience is. That's where they used to be. So, no shame in the game. At one point, that was absolutely a true statement, absolutely a true belief to hold. And now, think, how many people do you know who still get the newspaper? I actually have the answer to that.

I looked this up for this episode to tell you. The answer of how many people get the newspaper is around 26 percent of U. S. adults.

That's how many report getting the news. That comes from Pew Research Center. From all print publications, so that's not even just newspaper. A quarter, basically, of adults. And at the same time, how many adults, especially mature adults who are more representative of our core audience. How many of those adults are on social media by comparison?

I looked that up too. The answer is 70%.[00:12:00] 

Around 70 percent of adults age 50 and older use social media. That's from AARP and 90 percent of adults age 65 and older in the United States use the internet. That's from Statista. Other sources online have similar stats. I'm just citing those. To give you a reference. So put this together, 70 percent of adults age 50 and older are on social media, 90 percent of adults age 65 and older are on the internet, and only 26 percent report even getting the newspaper or any print publication, let alone reading the section Where you have run your ad on the day you have run it.

So if good marketing is caused by spending where your audience already is, this is telling you that your audience is online. Note, I did not say younger audiences, [00:13:00] you know, rewind, listen to those age categories I just said. Your audience, all of it, all of them, is online way more than they are reading physical print news.

Okay. Let's talk about radio because this one is a little maybe more complicated and a little confusing for people sometimes. I was just re reviewing the Changing the Narrative year end survey results. So many of you probably got this back in December. We sent out the survey to thousands of you on my email list at the end of last year.

And some folks were asking this very question, like literally in the comments. People are saying, what do I do about radio in my marketing budget? Do I buy radio ads? Do I not buy radio ads? So here you go. 82 percent of Americans aged 12 and older. Listen to terrestrial radio every week. That's Nielsen data.

So people are listening to the radio. People of all ages are listening to the radio. So, [00:14:00] why am I not recommending spending money here? The reason is because audiences may be there, as in listening, but that's not the channel where people buy. If you have all the marketing money in the world, fine, maybe you put radio in the mix, but most people come to me, you're probably listening to this episode because you're thinking I got to find somewhere to cut or I want to make my money work harder for me.

So here's what it comes down to. You can't buy tickets to a performance on the radio. You have to buy them on the internet, or in some cases you could call, right? So, even if somebody hears a radio ad, a terrestrial radio ad, but they're in their car driving, which is where most people listen to terrestrial radio these days, they have to switch to a very different medium, like literally switch devices is what I'm trying to say.

They have to switch to either their phone or their laptop. If you show someone a digital ad, where are they? on their phone or their laptop. [00:15:00] If you put an ad in a podcast episode, where are they? On their phone. Whether it's buying online or even in the case of buying by picking up the phone and dialing and making a call, those mediums are meeting people where they are.

And where the transaction takes place. That is so important. What I'm trying to say in all of this is, stop buying more print ads, or radio ads, or bus boards. Bus boards is kind of same song, different verse. We are still having people change channels or change mediums. From the ad to the transaction, so it weakens the conversion rate.

Stop putting everyone on every mailing list. That's another one. If you listened to the last two episodes, you know this. You heard me talk about it a lot. And the reason is because all of these methods of marketing, these old best practices of yours even, they are not working anymore and they are the equivalent of sinking money.[00:16:00] 

It's like when you have an old car. You know, you keep like sinking money into that old car and you keep repairing it. But it's actually better to just buy a new car. So the old car still mostly works when you keep sinking money into repairing it. But, you know, it just doesn't run like it used to. Print, radio, outdoor ads still seem to be kind of bringing in some revenue, but it doesn't work like it used to.

So what's the new car? The new car in this analogy is patron retention, patron messaging, that's the last two episodes, plus strong digital content. And digital content, that's broken down into paid and organic. This episode is focusing on the paid side of things because we're talking about our marketing budget.

That's the new car. Note, I did not say go out and buy a Ferrari, right? A new car can be a vehicle that fits your budget and is reliable. And that's what we're talking about here, no matter [00:17:00] how many zeros are in the budget at your arts organization. Way more important than the amount of money or the percentage of money.

I'll say it again is how you are Allocating it so stop allocating it to things that don't work and do allocate it to things that do if you want to increase ticket sales and grow your audiences These three episodes are the formula. It's simple, but simple doesn't mean everyone does it. So getting back to the question of how much should we spend on our marketing?

If you're like, okay, Aubrey, I know not a percentage, not about how much, it's how we allocate it. How do you allocate what you have to spend? That is what we're going to talk about and break it down next.

Here's a fun fact. A returning audience member is worth seven times more than a first timer. Yes, I am talking about audience retention, one of my favorite topics, but the problem I hear all the [00:18:00] time from arts organizations is how to best track your own patron retention data across marketing and development.

That's why I want to tell you about Artalyze. Artelize has brilliantly solved this challenge. Their audience retention dashboard is the one stop place to access your audience data across every important metric. First time buyers, multi buyers, subscribers, and donors. I've worked with a lot of tools in data management programs over the years.

The Artelize Audience Retention Dashboard works with any CRM and it supports arts organizations of all sizes all over the globe. If you can upload a spreadsheet, within minutes you can access all your data. Your key patron segments and top retention metrics beautifully laid out and easy to read. It's just that easy.

No joke. And their tool even makes real time recommendations based on your patron data to boost conversion at each stage of the customer journey. So you can see what's working. Refine your approach and keep doubling down on what [00:19:00] drives the best results. The Artelize team brought me into their process and we had clients test the product with their own real data.

So let me tell you, I have seen firsthand the immense time, money, and effort this dashboard can. Save Arts Organizations, allowing you to finally harness your data in one place. Think. Easier collaboration between marketing and development efforts, easier for presenting at board meetings, easier to see everything in one place without running multiple reports.

If you are ready to grow, retain, and engage your audience with data driven tools that are easy and fast to use, visit aubreybergauer. com slash dashboard. Listeners of this podcast save 20%, and members of my Run It Like a Business Academy save even more. That's www. aubreybergauer. com slash dashboard to learn more about Artalyze.

today.

Okay. So getting back to the question of how much should we spend on [00:20:00] marketing or even how much do we allocate within the marketing budget? Some people even say, okay, fine, Aubrey, what is the percentage of the allocation within the marketing budget? Similar to before, I've never looked at the marketing mix as a percentage.

Instead, I have always approached developing my marketing budgets. based on what I need and then I justify those needs. So here's an example. You need to be spending on digital marketing. I'm talking meta ads. Google, if you want to level up, but start with meta for performances for single tickets. I don't know your overall budget or market, but I would say that that starts at a few hundred dollars per performance for a small organization and up to a few thousand dollars.

per performance for big organizations. And even here, there is nuance in what I'm saying, because the better you get at optimizing your digital ad campaigns, the less it actually costs you. So this is [00:21:00] hugely beneficial to this budgeting conversation. Print and radio are more expensive and have gotten more expensive over the years.

And that has to do with their own funding model, the changing nature of media. Digital ads, on the other hand, works such that the better you get at growing your digital marketing chops, your cost per lead or cost per sale goes down. So this is great news. The better you get at it, the cheaper it is. Now if it was my organization, I would say you need to have a direct mail communications plan too.

Direct mail is not dead in, even in our digital world when it's part of a multi channel strategy. So that's important. for that. Any of these channels alone, not as effective as when you combine them and put them together. People who you have addresses for should get a postcard for the performance. I say postcard because this is a low budget item.

You can spend more on fancier direct mail pieces if you want, but it's really not necessary if you were just [00:22:00] trying to pinch pennies. So I'm a huge fan of postcards. One, for the economic pricing of it, but also because People don't spend a lot of time, like reading, like when the mail, think about your own mail, when the mail comes to the mail slot or to the mailbox, people don't spend a lot of time holding the mail in their hand before deciding if the mail goes into the recycle bin.

So, a postcard can maximize like that two second chance you get for eyeballs on it. Now there's new ones here too, about when to spend more and for which audience, so. See the last two episodes on this again, but I'm getting a little ahead of myself So that's my high level take and high level approach multi channel multi medium digital with the direct mail component and then you can really make this a Strong multi channel marketing effort when you add in a couple more things.

So here you go direct mail We just talked about digital ads. We just talked about plus email Plus organic social media, [00:23:00] that right there, those four things, that is a good marketing mix for a lot of organizations for most campaigns, no matter your organization, whether that's a single tickets acquisition campaign, whether that's a subscription campaign, maybe for subscription, you want to do brochure or more, we'll talk about that in a second, but that solicitation appeals as well.

So nuance again, like I just said, subscription and annual fund. I recommend a few other things, but for now, this is the basic mix. So if you just want the baseline formula, you want to do just this mix and nothing else and really get good at that, take my word. You will see increases in sales and better ROI.

I have seen it again and again and again. It doesn't have to be more complicated than that. So next, as I'm assembling the marketing budget, once I have those items in place, next, think about your retention plan. I talked about this [00:24:00] in episode one of this season. What are you doing for new ticket buyers after every performance?

Are you sending them an email? Are you sending them a 4x6 postcard saying, thank you for coming and here's the invitation to come back? That stop alone is so huge for stopping audience churn and developing Repeat customers. This is also what I love about the planning upfront and budgeting side of it that we're talking here.

When you take a step like this to allocate some money to the follow up plan. It is definitely going to save you money later, especially in a situation like the example I mentioned earlier for acquisition.

Next step as you're thinking, what is the marketing budget need? The next step to think about is do you do season marketing? So I said we'd come back to subscriptions. This could be a season brochure, could be a subscription campaign, could be both of those things. So budget for [00:25:00] that. You could have. You know, your season brochure, or if it's a small season, you're a smaller organization, you do just a few performances a year.

It could be even a flyer or something very simple. It does not have to be this like mega multi page production because sometimes that's even very overwhelming for the customer. So bigger organizations in some ways are at a disadvantage there. They have so much product, it's actually quite a challenge to figure out how do you package it up in a consumable way.

For somebody who you're trying to acquire to be a subscriber, not just renew. So, website is next. And here's my take on this. Every year, I want to ask myself, Do I need to allocate some money to invest in some website improvement? Or this could also be true for graphic design. On the website, though, I always try to do a little each year.

Versus Wait, wait, wait. Oh, now our website's old. Oh, now we got to fix it. Oh, now we need a whole overhaul and redesign. Like, that stuff's [00:26:00] expensive. We're having this whole episode so that we're not going crazy on the expensive stuff, right? So, I really do like to allocate a little bit each year what's going to be our website project this year.

So that it becomes this semi constant state of improving little things, and making that your MO instead of waiting and waiting for this giant website project, which honestly on its own doesn't solve all your issues, all your challenges, unless you've done the work prior of the iteration and optimization to know what you want.

in the full scale redesign anyways. So, okay. That list right there, that is basically the marketing mix I recommend for most organizations, no matter your budget size.

So start with your retention plan and messaging. That's why they were episodes one and two this season. Add on your acquisition plan to that in the form of digital ads. Now, I want to [00:27:00] come back to this idea. That some people think, if they're not spending tons of money on expensive marketing, that their marketing isn't valuable, and that's just a false belief.

Likely a belief you hold because somebody told you along the way, to hold that belief, whether explicitly or implicitly. Could have been a board member saying, I read the paper, I want to see the ad in the paper, could have been, you know, somebody worked with along the way because that's how we were taught.

Again, many of us, so no shame in the game, but for anyone here making budget decisions, whether you are a department head chief executive board member, or just interested bystander. You now have a choice. You can keep sinking money into the old car. In other words, making the mistake of thinking it's about what you spend instead of where and how you strategically spend it.

And you can watch your audience continue to decline.[00:28:00] 

If you keep doing things the way they've always been done, you can absolutely expect to get the same results. And for many of you, that same result is a downward trend. So you can make that choice. Or you can make the other choice and decide that the new car, meaning patron retention, messaging, combination of using your data and digital, is going to take you farther.

And I have one more piece of very good news on all of this. Doing your budgeting and marketing this way actually costs a lot less than all of those other expensive channels, expensive mediums we talked about before I said it. I mentioned it before and I talked about the cost of sale going down as you get better at this.

But the overall spend costs less to two. So talk about allocation. I cannot tell you how many organizations I've worked in or with over the years where we reallocated what we were spending on print ads, [00:29:00] moved that money to digital ads, and it worked. Almost feels like a windfall from heaven or something.

I know that sounds like really dramatic, but the truth is the dollar stretches so much farther and you can reach so many more people with the digital ads, paid digital ads, and it's targeted. And all of those other things we talked about. So one more time, investing strategically into marketing doesn't mean you drain your budget.

It means you bring in way, way, way more revenue and have that higher ROI that everybody wants. The question is not how much do I have to spend or what percentage should I spend? It's how much am I going to gain in sales and audiences?

And I mentioned I have a free tool to help you with some budget projections. This tool helps you answer that exact question of how much am I going to gain? This is a simplified version of what I'm giving to participants [00:30:00] in my audience development bootcamp next week. It's a spreadsheet file that walks you through entering a few numbers for your organization.

Like you enter how many first time ticket buyers you had last year, how many performances are in your season, your average ticket price, and a couple of things like that. And then this spreadsheet is pre populated with all of the formulas, so it automatically and instantly populates with your revenue projections in terms of how much extra revenue you could be earning if you just focus on a few key patron retention areas.

You can get this free tool on my website@www.aubreyauer.com slash 44. That's number four four for episode 44, and use it to see how much potential revenue is on the table to you or use it to make the case for retention if you're trying to make the case to your boss or board. This tool is all yours to do all the budget math for you.

So one more time. Grab it@aubreyberger.com slash 44.[00:31:00] 

So as we bring this to a close, I hope this episode was packed with value for you on all things marketing, budgeting. Please let me know if you learned something on Instagram or LinkedIn at Aubrey Burgauer. I would love to hear from you on this. And next episode, just to share, it is a special one for Women's History Month.

We are celebrating by breaking down what's behind gender bias at our arts organizations, what's causing it, and the small and big steps we can take as arts administrators to weed this out of our institutions. I can't wait to share it with you. Until then.

That's all for today, folks. Thanks so much for listening. If you like what you heard here, hit that button to follow and subscribe to this podcast. And if you've learned something or gotten value from this, please take two seconds to [00:32:00] leave a quick one tap rating or review and return to all of you. One more time.

Thanks again. See you next time on the offstage mic. The offstage mic is produced by me, Aubrey Bergauer and Erin Allen. The show is edited by Novo Music, an audio production company of all women audio engineers and musicians. Our theme music is by Alex Grohl. Additional podcast support this season comes from Kelle Stedman, other members of the Changing the Narrative team, and social media brand management like Classical Content.

This is a production of Changing the Narrative.

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