Not-for-profits tend to use digital marketing a lot in their marketing activities. It can be a cost-effective way to extend their audience – in fact, it’s mostly free. But measuring your return on investment (ROI) if you don’t make a profit can be challenging. Many of NZIE’s graduates could go on to work for not-for-profits. So, how do you measure the success of your digital marketing if you don’t make a profit?
Measuring ROI when you work for an NGO
When you work in digital marketing for an organisation that is engaged in eCommerce, calculating the success of your marketing activities is often based on one important factor: sales. Ecommerce brands use formulas to work out their ROI. However, it’s not quite as simple to measure your success when you work for an NGO (Non-Government organisation) or not-for-profit.
If you’re a NGO that receives donations or sells second-hand goods, you could measure your ROI based on donation growth or sales from your stores. But for many not-for-profit’s that’s not their only goal. Here are a couple of ways you can measure the success of your marketing at an NGO.
#1. Donations or Sales
If you’re a not-for-profit organisation that receives donations or sales from second-hand goods, you can use the same formulas as eCommerce brands. Ecommerce brands use formulas like sales growth minus marketing costs divided by marketing costs. Generally speaking, if you spent $200 on marketing, but made $2000 in donations or second-hand good sales, then you’ve made a pretty good return on your digital marketing investment.
Conversions are a good way to measure your return if you are a not-for-profit that doesn’t receive donations or sales. For example, I worked for the Problem Gambling Foundation. Their main purpose was to raise awareness of gambling harm and get client’s in the door so we could provide a counselling service. And as we were still accountable to our stakeholders who funded us, so we used conversions to report on the success of our digital marketing. Conversions or click-through-rates (CTR) to your website can give you a good idea of the number of referrals you’re getting from your digital marketing efforts.
Using tools like Google Analytics can help you understand what percentage of traffic is coming to your website from your digital marketing channels. It can also tell you how long people are spending on your site, and what they are doing while they are there. It’s not an exact science, but you could look at the number of people who came to your site during a digital marketing campaign and divide that by the number of people who came to your site through your digital marketing channels. This can be an effective way of understanding how your digital marketing efforts affected your conversions. Furthermore, many digital marketing platforms have implemented processes that help with this. Check out Google Tag Manager and Facebook pixels.
#3. Reach, Impressions and Engagement
Many not-for-profits are time-strapped and often short-staffed. And many rely on volunteers to do their digital marketing. If all of the above is too complicated, you can take it back to basics and focus on the important metrics. Consider reach, impressions, engagement, open rates, and clicks.
Put simply, if people are engaging with your social media campaigns then you probably will reach a higher number of people with your content. Although, that’s not necessarily the case with Facebook’s algorithm. But I’ve always thought that engagement is a better metric to understand how your audience is perceiving your content and what they want to see, as opposed to reach or impressions. The same goes, if people are opening your email campaigns and clicking to read your content, then this is an excellent indicator that you’re providing your subscribers with content they are interested in.
It can be challenging for not-for-profits and NGOs to measure the success of their marketing activities. But nowadays, thanks to digital marketing, NGOs have a whole range of tools at their fingertips. They can now increase engagement, reach, and awareness in a cost-effective and measurable way. The beauty of digital marketing, as opposed to traditional marketing activities, is that you can see real-time results so you know what’s working with your marketing and what isn’t. This means for cash and time-strapped NGOs you can best direct your marketing budget and efforts on the marketing activities that are most effective for your organisation.