‘The Agitator’ Articles

By Sean Triner This article was first published by F&P Magazine in February 2011

Time to rethink appeal frequency?

By focusing only on the traditional appeal times around tax and Christmas, Sean Triner says charities are missing out on seven months of the year.

We direct marketing fundraisers are kept busy – but we have the times, like after Christmas and tax where we seem to really lay off a little. Well, according to figures from Nielsen’s ‘Who Mails What’, anyway.

In some ways it makes sense – look at the giving patterns of major donors for example. Figure A shows when people gave specific donations of $1,000+ to 33 Australian and New Zealand charities. Tax-time clearly seems to be an important factor.

But considered in isolation, this doesn’t tell the whole picture. January is not generally considered a good fundraising month, yet $200 million was raised for the Queensland Flood Appeal. I wonder how this chart will look for 2011?

Figure A: Cash gifts $1,000+ by month, 2004 – 2009

It’s about more than the month

My point is that there are bigger influences over when people decide to give other than the month. And of course, when you ask them for money is one of those influences. So when should you be contacting donors?

The key is to think about direct marketing strategy in these terms: • Maximising life-time value • Net income over a year – not an appeal • Number of donations received

If you or your board use these terms, you must abandon return per appeal as a measure – it is destructive and unhelpful. There are lots of articles on this issue, and a couple of books too – ‘The Life You Can Save’ by Peter Singer and ‘Uncharitable’ by Dan Pallotta.

There are many arguments about why it is the wrong measure, but the one most relevant right now is that it is better to raise $1,000,000 at a cost of $400,000 than it is to raise $650,000 at a cost of $50,000. Even though the net is the same, and the ROI raising the $1 million was worse, the reason it is better is that there is likely a higher number of donors, which means long-term income is ‘safer’.

Put bluntly, the more often you get people to give, the more they will give.

Ask more often The basics of marketing teach us about RFV (recency, frequency, value) – and the example above – use the arguable fact that RFV targeting applies to charity donor bases as much as any other customer base.

Someone who gave six months ago is more likely to give than another otherwise identical donor who gave seven, eight, ten or twenty months ago.

The best way to reduce attrition is get a gift, and the best way to get a gift is to ask. So the best way – across a database – to reduce attrition is to ask closer to when someone last gave. In other words, ask more often.

This all makes sense for donors rather than prospects – but when is a donor a donor? Is it with their first gift, or their second? There will always be some people who only ever give one gift. But those that go on to give a second are much more likely to give a third, and so on. So it makes sense to try and get a second donation as quickly as possible.

All in the timing We usually time an appeal to maximise response rates. But really, we should measure the overall response rate over a year – i.e. the number of people (and the number of donations) that we retain every year. This is a more useful measure than the response rate to a single appeal. Few charities in Australia measure appeals like this, but it is standard practice for many American charities.

To maximise this overall response rate, we need to plan appeals around response rate and subsequent behaviour.

For example, only sending acquisition mailings at tax and Christmas – the time many charities run big appeals – may seem to make sense, but the medium-term impact is that the new donors may have to wait an average of six months for the next major appeal.

And, on the other hand – letterboxes are absolutely packed out with charity appeals in late October to mid-December, and late April to mid-June. That leaves about seven months with much less competition. And it gives you better test times. Yet another benefit is that you can go to smaller, more tightly selected prospects more often, rather than trying to make up the numbers with some mediocre lists.

Running acquisition campaigns across so many different charities, over so many years has not revealed any data to suggest that there is any long-term advantage from concentrating acquisition in the two big appeal times of Christmas and tax. But it puts workload and cash flow pressures on organisations. I think we do it because that is how we always did it. Let’s break the mould and test sending our acquisition out more evenly, and mailing warm donors more often.

By Sean Triner This article was first published in Fundraising and Philanthropy E-bulletin in November 2010

I saw this great article from Jeff Brooks of Future Fundraising Now: ‘You’re Not Nike – Get Over It.’ Jeff is much more of an agitator than me, and he starts the article with this quote from the marketing director of a nonprofit:

“Our fundraising results have dropped since we put our new brand standards in place, but that’s OK because the new brand so brilliantly articulates who we are as an organisation.”

The moment ‘branding’ is mentioned I often get worried. Luckily it rarely turns out as badly as in the quote above, but branding exercises do need to be carefully managed and fully integrated with fundraising.

Clearly, brand awareness is not a bad thing: the higher your overall brand awareness (providing it is positive), the easier it is to fundraise. If two nonprofits went head to head that were doing identical work and promoting it in the same way using almost identical language – the one with more brand awareness will likely have a lower cost per acquisition.

However.

This month, I am agitating that ‘brand awareness’ can damage your nonprofit. Here’s why: it’s not the brand awareness that causes the damage directly – it is what we do to ‘grow’ this awareness, such as misdirecting budget and effort from fundraising or services, reducing fundraising effectiveness and alienating donors.

Hope and solutions vs problems and need

Let’s say a nonprofit works with a brilliant branding agency to develop a new brand. New brand guidelines include a new font, look, feel and ‘voice’. The ‘voice’ reflects the fact that donors say in focus groups that they would be more likely to respond to positive images and stories of hope and solutions – not problems and need. Consequently, internet and direct mail appeals don’t work as well.

Donors really do say they prefer positive stuff, but test after test after test shows that donors respond better to need: how can I help!? And these tests show that this continues to work.

No nonprofit wants to ‘brand’ itself as negative or always needy. But … you are needy. Be honest; demonstrate why you need the money, and what will happen if you don’t get it. It might not be a pretty picture, but it is the truth.

Beware of abstractions

Another trap in brand development, particularly from agency people, is the introduction of abstractions and taglines.

Nonprofit work is really pretty simple to sell:

1. There is a problem. 2. Some good people want to solve it and set up a process to do so, but 3. they need money. So, 4. please give or the problem won’t be solved.

Taglines can be useful to underline points (provided they don’t become central to the campaign), but abstractions are never useful.

Budget distraction

Time for a bit of maths.

Effective, large-scale, public fundraising, such as face-to-face programs, direct mail, multimedia and phone programs, can raise money and awareness. Effective, large-scale public awareness programs (such as outdoor advertising, bus-backs, press launches and publicity events) only raise awareness. They don’t raise money.

But since awareness makes fundraising easier, and a public awareness campaign worked well – would it be best to do both?

The answer is “Yes, but …” and the ‘but’ is where the maths comes in.

There is a simple formula here: the cost of the awareness campaign needs to be less than the increase in income from the fundraising. It rarely is.

For example, take a fundraising acquisition campaign costing $100,000 which recruits 300 new regular donors. Then spend $50,000 on pure awareness. The effect is amazing, with donors now 10% more likely to respond. So the next $100,000 acquisition campaign will get 330 donors.

This would be an extremely fantastic result … until you think, ‘What would have happened if I spent $150,000 just on the acquisition campaign alone?’ In theory – you’d have got 450 donors.

Any spin about the long-term nature of brand awareness should not be ignored, but considered carefully. New donations also have a long-term nature, because a donation now is the best indicator of a future donation. Of course, I am simplifying this, but the theoretical formula still applies.

Full-on, integrated campaigns appear to work brilliantly – just look at The Smith Family’s integrated approach to their Christmas campaign, and World Vision with their 10,000 new sponsors campaign. But those campaigns are not awareness campaigns; they are clear fundraising-led campaigns with everything pointing towards transactions.

Hopefully, all media are being tracked against outcomes.

Too many cooks in the brand kitchen

Going through a rebranding process usually involves lots and lots of people. In my last job before setting up Pareto with Paul Roberts, I project managed the rebranding of UK mental health nonprofit, Mind. In that exercise I had to involve all stakeholders – which included national and regional staff, all regional Mind associations (Mind effectively franchised its brand to them), donors and more. As well as the direct costs, tens of thousands of pounds were effectively spent in staff time.

When it comes to branding, everyone wants a piece of it. Everyone gets especially worried about the logo – many confuse brand with logo. Consequently, everyone puts in a word, and the end product is a camel*.

Be well-known where it counts, not everywhere

Nonprofits often believe they have lots of target audiences, ultimately concluding with the ‘general public’. Let me tell you that short of having $20 million to invest in brand awareness, the general public is not your target audience. You really need to narrow it down. You may well have two key audiences: service users and donors.

Your service users should be easy to define (for example, deaf people or pet owners or your congregation). Your donors are older people. From there you can start breaking down by state, country v metro, suburbs, wealth indicators etc. Age is still by far and away the best indicator of a good donor, with only one exception – face-to-face (F2F) fundraising sign ups. F2F activities are also brilliant for brand awareness.

Back in 2005, managing director of Triumph Communications, Tim Matthews, wrote an article for Fundraising & Philanthropy Magazine entitled ‘Brand power – the hidden lever for fundraising success’. In it, he said that “… to develop a strong brand reputation, you don’t need to spend millions of dollars in television advertising. In fundraising, it is better to have a strong reputation amongst a few, than to have a weak reputation amongst many.”

Questions to ask before ‘the branding exercise’

In his article, Jeff Brooks says that “… nonprofits that have never been through the branding exercise often have stronger brands than those who have. They aren’t making high-flown, abstract statements about who they are – and promises they have no ability to fulfill. They just put out fundraising offers.”

I told you he is more of an agitator than me.

I do think that if you are going to go through that exercise, you should ask these questions:

1. Why? What would success look like?

2. Do I just need a new ‘look’? Maybe the logo is just tired?

3. How much am I willing to spend, and how can I justify that expenditure by increased income or better services?

4. Do I need external help? If so – you are better off paying for it. If someone is willing to do pro bono then ask them if you can pay them and they can donate the money back. This way you are still a customer, and shouldn’t slip down their priorities.

5. Who is our target audience? a) For services b) For fundraising

6. Could I achieve the same goal by stripping out all the fluff and just concentrating on what we do, why, and what you can do to help?

Making the right decision

The right decision for some organisations may be that you do need a re-brand exercise. You may well decide to use an agency. If you do, then all agencies will recommend qualitative and quantitative research including focus groups.

Make sure you sense check that research against actual donor behaviour. Ensure it is congruent with your own data analysis (if you have more than 3,000 donors). If research shows that donors say they like positive messages – check to see if your most successful campaigns were ‘needy’ or ‘positive’.

You need a level-headed project manager, someone who keeps it all real, avoids abstractions and doesn’t confuse awareness or brand voice with success. You only have one measure of success – helping your beneficiaries.

* A camel is a horse designed by committee.