Using KIPIs to Account for Sector Characteristics
Individual KIPIs that Control for Organizational, Community and Sector Characteristics
Although a high-level analysis offers some intriguing insights, more useful insight can be gleaned from examining individual KIPIs at the organizational level. In this section, we again map Response to Marketing Efforts (i.e., Marketing Dollar spent per Attendee) to illustrate a KIPI’s value. We now use actual examples of anonymous organizations to demonstrate how KIPIs take into account the characteristics of the organization, arts and cultural sector, community, and cultural policy. In each figure, we map organizations that earned relatively low KIPIs (i.e., below 30), mid-range KIPIs around 50, and relatively high KIPIs above 60. To simplify comparisons, we limit the examination to organizations that spent between $100K and $1M on marketing in 2012.
We look at six sectors, starting with a focus on Other (including Children’s, History, Natural History, and Science) Museums. We show three Other Museums in the first figure below, which plots an organization’s Marketing Expenses and its Attendance and gives the organization’s KIPI score. Note that you won’t be able replicate the KIPI calculation from the numbers provided in the chart (it is a complex equation!). The low-KIPI (KIPI=29) museum spends nearly $750,000 on marketing (total budget nearly $12M). The mid-KIPI (KIPI=49) museum spends more than $300,000 on marketing (with a total budget around $4M). The high-KIPI (KIPI=73) museum spends a little more than $200,000 on marketing (total budget around $20M). These three organizations demonstrate the basic idea behind the Response to Marketing Efforts Index; that is, the KIPI goes up as the Marketing Expense/Attendance ratio increases.
A Simple Pattern of Individual KIPIs for Three Other Museums
This simple idea is complicated by the fact that the playing field is not level for all organizations. Some organizations have larger physical spaces and budgets, some are located in more or less supportive communities, and some receive greater government or foundation support. In the next section, we expand our sample to six Other Museums to demonstrate how controlling for (1) organizational characteristics such as budget size and pricing decisions and (2) community factors creates a level playing field for KIPI estimation.