Yesterday Roger outlined the failings of alleged-segmentation systems that aren’t customized to your organization.

Today, I’d like to suggest a proven, low-risk approach to dramatic improvement through better segmentation.

It’s hard to get away from the significant advantages that come with being a mature nonprofit brand: you can get very good at delivery, incremental efficiency, and volume.

Delivery is about exploiting what we know to get something close to what we expect; it is the origin of efficiency.  After all, if you know next year’s acquisition package is going to look pretty much like this year’s, you might as well order in bulk.  Your testing will likely reflect this: inoffensive tweaks done one at a time designed to gain a percentage point or two.

From this, you get predictability – you know what each telephone call, mail piece, or email will bring in before it is sent, minus a little bit of decay each time.

The challenge is how to help an organization make leaps forward.  Incremental tweaks and micro-gains  can efficient your way out of business, fading – albeit very slowly – into irrelevance.  In the for-profit world, about half of the S&P 500 will be replaced in the next decade – this level of change is coming to the nonprofit world as well.

Discovery is about exploring, which implies fighting against established habits, about visiting other ‘realities’ to find new horizons; this is the origin of innovation.

So you know you need innovation to grow and achieve your mission.  But you also don’t want to risk a leap that, if misjudged, could be fatal.  This isn’t about choosing one of the other, it’s about finding the proper balance between the two forces.

This is what faced the United States and the world in 1943. With an ocean to protect it, North America had dealt with its own problems, avoiding direct action in Europe until shocked into action by Pearl Harbor.  By then, German advances in jets had thoroughly overtaken anything the allies could put in the sky.  Lockheed, the aircraft manufacturer, at the semi-desperate plea of the US War Department – had the challenge of getting its large organization to continue churning out the existing munitions inventory while simultaneously taking on this new threat and delivering in a seemingly impossible 150-day mandate to produce a jet fighter.

Senior management echoed the seemingly impossible nature of this effort and if it needed to be done within the confines of exploiting what they knew, they were right, it was impossible.

A young engineer named Kelly Johnson took on that challenge by setting up a select group of people outside the bureaucracy – literally.  They set up shop in a rented circus tent next to a foul-smelling manufacturing plant whose odor gave the corps its name: the Skunk Works.

This team built the XP-80 jet fighter plane from scratch in 143 days – a week to spare.  This was not the only such project the Skunk Works took on.  For every project, Kelly applied a few key rules to cut through bureaucracy and stimulate innovation:

• Quality, not quantity, of people. He said, “The number of people having any connection with the project must be restricted in an almost vicious manner. Use a small number of good people.”

The next time you meet with your direct marketing agency, ask yourself who among them is truly an expert in their field.  Then, remember you are paying for all of them, not just the expert.

• Questioning assumptions. The physical distance of the Skunk Works tent also signaled a mental one. The physical and mindset difference between the business-as-usual Lockheed bureaucracy and Kelly’s young engineers.

What if your brand book is a tool to keep you on message, but potentially is also blocking  your ideal message?  And what if the very item given all the credit for bringing in the money – i.e. the solicitation – is also responsible, in part, for donor attrition?  And what if that ask deserves only a small part of the credit but our way of attributing success (and failure) is the limiting factor?

• Rapid prototyping. Kelly argued “A very simple drawing and drawing release system with great flexibility for making changes must be provided.”

The same needs to be true for your nonprofit communications and donor journeys – you need ways to explore a variety of ideas without crashing your program.

Creating a Nonprofit Skunk Works

So how do you create your own Skunk Works to prototype and test strategies aimed at the often ill-defined but coveted ‘donor-centric’ journey?

Here are several requirements:

• An evidence-based approach. Too often, we guess or “blue-sky” or (heaven help us) “ideate” for lack of a better approach.  Why guess when, with the right subject matter experts using methodologies to reach a deeper understanding of the “why” of human behavior, we can know what is currently unknown.
• A long-term pilot based on financial metrics.  This means a test environment where you mitigate risk by limiting the number of folks in the pilot program – large enough to get significant results; small enough that failure would not cripple your program.  It should be at least a few months and ideally at least a year to capture retention metrics.  We’ve also found the “pilot” term delivers an almost magic, elixir quality to internal objections since this is, after all, only a test and every change has evidence and rationale to it.
• Planning for strategy and implementation simultaneously. Every change needs to be documented, including what is required, what steps are needed, and what barriers need addressing, so when a test wins or loses, you can put the results into practice.
• Rapid prototyping, like Kelly recommended. You cannot have innovation with layers of copy review and subjective decision making.  Decisions must be made quickly and based on new evidence, not historical assumptions.

Here’s how a couple organizations have done it.

Catholic Relief Services: the prototype program.  CRS is one of the 50 largest nonprofits in the United States, so it would be easy to keep with the well-trod path.  But they wanted to change their donors’ experience without risking harm to their full program.

So they held out a test segment of donors to receive a different experience: more feedback, 20% fewer mail pieces and emails, and greater donor focus in the communications they did get.  What started as a test is now their control communications stream. Now they are testing segments of new donors to the organization and different strategies to convert donors to recurring giving.

Royal Society for Protection of Birds (RSPB): the value of identity.  This year-long pilot involved testing a “control” of one-size fits-all against two very specific identities (i.e. motivations for support) – birder and general nature enthusiast – and within each identity, specific needs from the organization to support and reinforce these identities.  This led to 9 different journeys with changes that ranged from entirely different touchpoints to versioning of copy tailored to a given, well-understood audience (e.g. birders with a general preference for the indoors who were involving their kids in the membership and with some openness to advocacy actions).

Importantly, most of these touchpoint assets existed already. What was missing was any way of knowing the segments that had different needs and preferences that could be mapped to these assets and tailor journeys accordingly; hence a default of one-size-fits-all and send-everything-to-everyone approach.   This pilot delivered greater conversion on the main, membership ask and greater levels of ‘engagement’ (e.g. open and click behavior) than the control.

These are all steps that you can take within your organization.

This isn’t a call to abandon goals of efficiency and incremental improvement.  Rather, it’s a call to also work on creating donor journeys that can put your current control program out of business.

Kevin