A couple of months ago, we published a blog titled “What is the Right Amount to Pay a Fundraiser?” It was much more successful than we would have imagined. We immediately started to get requests for salary studies on other positions. The most common request was that we do something similar for the head of marketing.
(If you did not read “What is the Right Amount to Pay a Fundraiser,” stop reading now and go read it first. The rest of this post will make much more sense.)
Explaining how to price the head of marketing causes me a lot of consternation, but I ultimately agreed to answer it. The source of my consternation is that, in the world of nonprofit, so many people use the word “marketing” wrong! So, before we talk about how to determine what to pay a marketer, we need to get our terminology straight.
What does marketing mean and how do nonprofits get it wrong?
The source of the confusion is a fundamental lack of understanding in the nonprofit sector about what marketing is. Oxford’s definition is that marketing is “the action or business of promoting and selling products or services, including market research and advertising.” Investopedia has a much more detailed explanation of it which I will summarize as follows.
“Marketing as a discipline involves all the actions a company undertakes to draw in customers and maintain relationships with them. At its most basic level, marketing seeks to match a company’s products and services to customers who want access to those products. Matching products to customers ultimately ensures profitability.”
I will add Dave’s corollary to this: because marketing is concerned with the sales of a good or service, marketing is therefore concerned with the production of revenue.
In the 1950s, Neil Borden popularized the idea of the marketing mix and the concept of “the Four Ps.” Marketers are responsible for product, price, place, and promotion. The Four Ps collectively make up the essential mix a company needs to market a product or service. Product refers to an item or items the business plans to offer to customers. Price refers to how much the company will sell the product for. Place refers to the distribution of the product. Promotion includes a variety of activities such as advertising, selling, sales promotions, public relations, direct marketing, sponsorship, and guerrilla marketing.
Nonprofits make two mistakes when it comes to their marketing functions.
First, they take a small, non revenue-focused aspect of the job such as communications or social media and call it marketing. Worse, many have anointed someone as the Chief Marketing Officer, yet they have no responsibility over revenue. Sometimes, not even an interest in revenue.
Marketing is always concerned with revenue production.
The second mistake, if they do get that marketing is about revenue production, is that they limit it to sales revenue. This is especially common in performing arts organizations, museums and other admission-selling organizations. Let’s pick on performing arts.
I was once the chief marketing officer of a major American orchestra. My colleagues in that field all believed that their job stopped at selling tickets. So, they measured themselves on ticket buyers, repeat ticket buyers, ticket-buyer-to-subscriber conversions and subscription renewals. A renewed subscriber was their ultimate measure of success.
On the other hand, I argue that they were only doing half the job. My job as a Chief Marketer did not end with a subscription renewal. Instead, it stopped when we had created a repeat donor. We have a term in the for-profit world: brand advocate. Brand advocates are customers who love your business and tell others. Essentially, they promote the business for you, uncompensated. Their positive reviews about the company’s products or services help to promote the company to new customers. Marketing’s job is to create brand advocates.
In the world of nonprofit, we have it easier because we know who our brand advocates are. They are donors. They love the organization so much that they give us money for nothing in return. So, the job of marketing in a nonprofit is ultimately to produce donors for the organization.
We now pause to address those I have just offended.
I know that there are colleagues out there who I have now offended. I know people with the title “Director of Marketing” or “Chief Marketing Officer” who are exclusively social media managers, public relations managers, customer experience managers, etc. I am not, in any way demeaning your jobs. You are still important to the organization. But marketing is a larger, and more strategic role, and must be concerned with revenue production.
Nonprofit marketers generate revenue for the organization through making and implementing strategic decisions about product, price, placement and promotion with an eye towards creating donors (aka, brand advocates).
The reason that distinction is important is because chief marketing officers in both for-profit and nonprofit need to be paid in alignment with the value of their jobs. A job that produces revenue for any organization, especially nonprofits, tends to be more highly compensated because it is hard to do and not a lot of people do it well. In my next installment, we will talk about how to determine marketer compensation.