Here is an excellent article from McKinsey Quarterly on evaluating an organization’s overall marketing effectiveness … that is, getting more bang for the marketing buck.

McKinsey boils it down to asking five questions. Or more accurately, five lines of inquiry, each with a host of questions.

If you have reason to be taking an overall evaluation of your fundraising program, these five ‘questions’ provide a pretty decent framework:

1. What exactly influences our consumers (donors) today?

Says McKinsey: “…we find that companies are aware of the growing importance of touch points such as earned media but don’t understand the true magnitude of their effects or how to influence them. The solution is usually to commission research that gets at the heart of understanding the consumer’s decision journey. Such foundational work must shine a light on the touch points and messages that actually influence consumer behavior. Marketers must be ready to use the findings to debunk accepted wisdom and legacy rules of thumb.”

2. How well informed (really) is our marketing  judgment?

McKinsey says: “Marketers often hear that the answer to improving their judgment in this rapidly changing environment is data … We counsel a return to what creates great marketing judgment: start by formulating hypotheses about the impact of changes to your marketing mix and then seek analytical evidence.”

3. How are we managing financial risk in our marketing plans?

McKinsey cites a company that “…set risk parameters that enabled some changes in the marketing mix but limited the total shift in any given year. There was a maximum percentage for spending on unproven vehicles, for example, as well as limits on annual spending reductions in some channels or increases in others. This simple allocation model ensured a gradual move to emerging media, mitigating risk while providing breathing room for piloting, testing, and learning.”

4. How are we coping with added complexity in the marketing organization?

As McKinsey notes: “The exponential growth in marketing complexity seems unending and needs to be managed. We’ve found three things that are always true in managing complexity within the marketing organization. First, you’ll require a number of specialists. You just will. You can’t get the skills and knowledge you need in just one person, and you’re not likely to get everything you need internally. Second, you’ll need somebody who both integrates marketing efforts across channels and communications vehicles and focuses on the bottom line. Finally, you’ll need absolute clarity in processes, roles, and responsibilities.”

5. What metrics should we track given our (imperfect) options?

McKinsey observes (a bit hopefully, I thought): “Metrics are rarely perfect. Yet the volume of data available today should make it possible to find metrics and analytic opportunities that take advantage of your unique insights, are understood and trusted by your top team, provide proof of progress, and lay a foundation for more sophisticated approaches to tracking marketing ROI in the future.”

The higher up you are in your nonprofit’s fundraising food chain (and I include CEOs and Board members), the more useful you will find this article. And if you’re down a few rungs, it wouldn’t hurt your standing at all to pass this up the ladder.

Tom