Are You Abusing Your Donors?
Over the weekend I read a piece by Gerry Adams on his New Thinking blog that got me wondering whether in the name of ‘donor engagement’, ‘donor experience’ and ‘multi-channel marketing’ many nonprofits are in fact abusing their donors.
Let me explain.
Using a 2014 Ernst & Young study of 24,000 insurance consumers, Gerry noted that “consumers trust insurance companies less than they trust bankers.”
“Further”, Ernst & Young “noted that the survey results reveal that far more insurance consumers actually switch insurers than express an intention to switch — an almost unprecedented finding in market research.”
This came as no surprise to Gerry, who noted that “ripping off the loyal customer is standard insurance industry practice. New customers get wooed with discounts and special deals, while the oldest, most loyal, best customers are ‘thanked’ with bills that escalate over time.”
What conclusion did Ernst & Young draw from their study in terms of stopping insurance churn?
That “stronger, two-way relationships may be the key to future market leadership in insurance. Insurers must master both product and customer experience design. Operationalizing customer engagement means designing the products, processes and experiences that satisfy — and even delight — customers across a multichannel sales and service ecosystem.”
Gerry correctly notes, “Unfortunately, Ernst & Young draws absolutely the wrong conclusion. “If you’re dealing with an abusive relationship you don’t encourage the abuser to start texting so as to embrace a multichannel approach.” [Emphasis mine.]
All of this got me wondering how much of this pertains to a lot of fundraising practices in vogue today. Are we attempting to ‘multichannel’ our way out of a business model built on abuse, where the addition of an extra channel is simply adding more abuse?
I don’t know the answer. In fact over the years I’ve come down firmly on the “You can’t ask often enough” side of the ledger. (See Dangerous Myth #1: Over solicitation)
But, in a world where growth is the exception not the norm, is it time to finally — after decades — reconsider and evolve the direct marketing playbook rule: “The more you ask the more you raise”?
Is that really the whole story? Does it apply over the long haul? And what if it is still largely true, does that mean there aren’t important corollaries that, if we could see or appreciate them, would change our present reality of little or no growth?
How many direct marketers measure their failure? What does it cost? How many recognize the diminishing returns that exist? Do we live in denial over this or am I wrong? Does someone out there think the relationship between asking and revenue is linear or even bolder, that it is convex?
Do fundraisers out there actually think the lousy retention rates are wholly unrelated to the ‘stop sending so much stuff’ sentiment we’ve all heard? That people still respond on appeal number 18, 19, 20 is hardly a satisfying retort, is it?
Again, I’m askin’ not tellin’.
But if we can accept that donors give at different frequencies and amounts, can’t we also accept they have different tolerances or preferences for how many times we ask?
Too many direct response fundraisers treat everyone as if they have the exact same preference and tolerance. Even if we ignore the preferences, the complaints, the donor experience, and focus just on the transactional performance data, it isn’t crazy to argue that the current model results in massive over-mailing, over-asking, waste and even abuse. Or is that crazy?
I know it’s fashionable these days to focus on ‘donor-centricity’ and I’m all for it. I’m simply asking — or maybe I’m warning — that a lot of other sinning, some of it dangerous, may be occurring in the name of creating more ‘experiences’ and ‘engagements’ for donors … as reflected in the ‘ask more, make more’ philosophy
If that’s the case I’m pretty sure we can’t ‘pronoun’, ‘indent and underline’ and in 14 point copy ‘Donor Love’ our way out of abuse. No matter how many channels we’re using.
Would sure welcome your observations and questions, ‘cause I’d like The Agitator or someone to dig into this some more.
Roger
8 responses to “Are You Abusing Your Donors?”
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Thanks for this thoughtful piece, Roger. My clients tend to be the organizations that are still asking only once… that annual, annual appeal. I’m just trying to get them NOT to freak out about asking more than once. I’m still trying to help them communicate as much as once per month with their donors…e.g., newsletter where the donor is, truly, the hero; invitation to an insider update (live or via telephone); solicitation; curious tidbit maybe via email; etc. etc.
Of course, they always ask about the donors who don’t want more than one solicitation – and say so. “Put it in the database! Follow the donor’s direction,” I say. “It’s judgment,” I say.
There’s a continuum. There’s thinking not just rigid rules and no thinking.
Perhaps the abuse you speak of begins with… Not thinking – just transacting. Ignoring research – just following personal opinion from some ignorant boss or board member. Treating everyone the same – not listening. Not thinking. Not monitoring. Not….
Those are my thoughts at 5:45 a.m. Tuesday morning.
Stop playing with my head, Roger. I’d just gotten to the point where, “OK, whatever…”, I’d accepted that “just send them more” was a flagrantly dumb was clearly effective strategy. Now you’re telling me that there’s a black hole in this dumb-but-effective universe, a black hole sucking away donors, a black hole SO powerful that even the wonder-pronoun, YOU, won’t plug it? Phooey. I thought this was supposed to be easy stuff. In my view (no data was harmed in the making of this opinion), donor-centricity IS the cure. Because, in my view, it isn’t a gimmick. It is donor love. It is donor respect. It is donor worship. And it is STILL as uncommon as two horns on a unicorn. Happy St. Paddy’s Day! By the way, brilliantly written. This might be my favorite article.
Do readers think this is testable? If so, how would you construct the experiment?
We have a group of members who have called and requested less mail. In response to this request, we code these people and mail them (roughly) half as many pieces of mail.
Ya know what? These people give more as a group of people on our file so there must be at least some correlation between the request and the resulting behavior. (We just backed into this knowledge we did not set it up as an experiment.)
It seems to me it’s quite possible to “over communicate” with people … especially when you move to channels they don’t like or are not particularly interest in. I don’t think the old axiom about more is better always applies.
David Krear
Are we saying that every communication has to have an ‘ask’?
Can the various communication channels provide us instead with opportunities to demonstrate the value and effectiveness of the donor’s actions, a kind of 21st century stewardship that fits the donor’s lifestyle?
Done right, this could result in the donor reaching the Tipping Point at a time that is convenient for them, or as a result of a powerful set of ‘connected dots.’
We all get to a point where we say, “Enough is enough!” but unfortunately, that line in the sand changes just as quickly as our moods change. Yes, modeling helps, but only for so long and then the model expires. I think it’s a question of remaining relevant, doing good work that donors want to support, and never ever taking those relationships for granted.
This one got me thinking so nice I want to comment twice. And in honor of St. Paddy’s Day, I’m going to do it in Irish and channeling Alan Clayton: “It’s not about the fookin’ money!” The more we become a Church of the Blessed Donor, the more money comes in. So quit your fookin’ scheming and get with the full-body hugging.
I agree, Tom! So much of the “ask more” comes from the transactional, do-this, get-that side of our thinking. If we’re not only pushing stuff out, but listening to donors and treating them as they ask to be treated, if we’re communicating what they want to hear, not what we want to say, then I think we’re on the right track.
As Simone says, if someone wants less mail, you mail them less often! If someone dislikes email, then send them a letter. Maybe more donor choice is part of the answer – despite the extra work it might take to make that happen.
Also, I think we need to remember that part of that communication needs to be flat-out gratitude, not all solicitations. And some information keyed toward donors’ wants – like great newsletters – with softer asks.
I’m not going to be moved from donors first, myself. And like Simone, mostly I’m not campaigning to get clients to mail/email more than once or twice a year!
Great piece today. Thank you!
Our most effective client (hospital foundation) touches their donors 14x/year. 10 of those are “hot sheets” which is a 2 sheet/1 page 4 color newsletter that is short, informative, and inspirational. It has connected their donors to become family. There is no “ask” but a reply envelope is included.
There are 4 donor renewals per year and 3 acquisition appeals.
There is a concierge service for $10,000 donors who are given a foundation employee’s cell phone # to pick up laundry, walk the dog, or stop by Wendy’s to bring a frosty.
Donor lifetime value is 3x greater than industry standards.
“Annual fund” is a horrible disease!