Best Ask Amount? Consumer Pyschology Has Lot Answers.

November 3, 2011      Kevin Schulman, Founder, DonorVoice and DVCanvass

Theories exist for a reason – to be tested and validated or discarded.  Those theories that are borne out can provide strategic road-maps for how to engage and drive optimum behaviors since they provide a point of view on how the world works.  With a point of view, one can establish measurement and with measurement, one can steer or guide a course – i.e. manage.  Our favorite of course is Relationship Theory, which defines the key elements of an interpersonal relationship.  We used this theory to guide development of an attitudinal model to measure these underlying elements and then confirm these same elements underlie a healthy, strong (financially profitable) non-profit to donor relationship.

But there are a whole lot of other theories in the social sciences about consumer behavior and many, like Relationship Theory, that approach consensus (or as close to it as one can reasonably expect) on what makes people tick.  Many (or all) of these theories have overly cumbersome names such as Adaptation-Level Theory and Assimilation-Contrast theory but they are very relevant to understanding how donors process much of what non-profits put in front of them, not least of which being ask amount.

Here is a terrific, academic working white paper with your standard but still very useful literature review on previous work, that tests several theories among the high level lifestage segments of acquisition, renewal and reinstate.  It is worth reading, from cover to cover (ok, at least skimming).

But, here is their bottom line finding: for acquisition and reinstatement, use most recent contribution.  These two segments have very weak internal anchors on what they want to give, think they should give or gave in the past.  They need an anchor that makes sense to them and MRC is it (and better than alternatives).  For the actives on your file, average gift beats MRC handily and in fact, MRC may be detrimental.  The actives, unlike lapsed and acquisition, have very strong internal reference points or anchors, so much so that the ask amount has little to no impact on gift size but does impact overall response rate.

Study on ask amounts

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3 responses to “Best Ask Amount? Consumer Pyschology Has Lot Answers.”

  1. […] Schulman, my colleague at DonorVoice in a brilliant post on his blog summarizes the most appropriate and effective ways to calculate

  2. Perhaps I’m missing something as I’ve only read this post and not the full report but — how can you use MRC as the ask amount if you’re only acquiring the donor which assumes they haven’t given before?

    Is it based on MRC to another nonprofit? Thought that logic seems strange given they may be a long-time highly invested supporter to that group….

    • Kevin Schulman says:

      Lisa,

      Thanks for reading and posting. The MRC for acquisition is based on giving to another group and in this study, turned out to be the best way to maximize giving to the requesting organization. They found this to work best relative to the tested alternatives, including average gift on the house file. I think the reason is that it is all about anchors and the most recent gift to another org is a powerful anchor – i.e. has relatively high recall in mind of donor, makes sense to them as an amount to give…