Channel vs. Identity: Two Go In; One Comes Out

May 16, 2018      Kevin Schulman, Founder, DonorVoice and DVCanvass

The words we use shape our thinking.  A recent study, for example, showed you can change how people want to stop crime by how you describe it (by more than the divide between Democrats and Republicans).

If crime is a “beast preying” on the city, you want more punitive crackdowns.  If it’s a “virus infecting” the city, you want more reforms to address the root causes of crime.

Unfortunately, the same thing happens when we open Excel.

Your finance department undoubtedly creates a budget section for “direct marketing”.  That’s because your board will not accept an organization-wide budget with just three lines: revenue, expenses, and net.

How then to split your marketing programs?

Naturally, you do this by channel, since that’s how you’ll be spending money.

This is a rational approach that spurs irrational implications.  Soon, you are thinking of digital donors, mail donors, telemarketing donors, as if it is the channel that defines the person who donates through that channel.

Pretty soon, that’s how your strategy is organized; zooming in on ever-smaller channel fractals (e.g., direct marketing to digital to social media to Facebook to Facebook Custom Audience to Facebook Custom Audience look-alike sectors).

Big problem!  We are letting our spreadsheets fence in our strategic thinking.  This would be fine if channels were the best ways to organize donors.  But they aren’t.  Audience identity is.

Ideal groupings of donors would have similar commitments to the organization, similar reasons for supporting the organization, and similar financial benefits.  That is, you want to segment to maximize the similarity of the people in the bucket to each other and maximize their difference from those outside the bucket.

Channel doesn’t do that.  Here’s an example from a health charity:

Channel Event giving Direct marketing giving Total giving Commitment score (out of 10)
Mail 10% 90% $404 7.6
Event 80% 20% $326 7.8
Digital 5% 95% $275 7.9

Insights:

  • Mail donors are a bit more valuable
  • People stay with a channel
  • Not much else

Looking at these data, how does your email appeal differ from your postal mail appeal?  Well, one is on a computer; the other needs a stamp.  But you are likely using similar messages, a pretty sure sign that your segmentation is a bust.

Now let’s look at this same audience, using the lens of whether they were a direct beneficiary of services, an indirect beneficiary, or have no connection:

 Identity Event giving Direct marketing giving Total giving Commitment score (out of 10)
Direct 48% 52% $489 8.6
Indirect 34% 66% $386 7.9
No connection 30% 70% $256 7.1

Key insights:

  • People who have direct experience are way more valuable than those who don’t.
  • These donors exist on different channels – your event and DM donors are far more similar than you thought.
  • Each of these donors has a mailbox, email box, and phone number. It’s just a matter of their preference by which channel they give.

When you study these groups, you find that 60% of the relationship with direct connections is their involvement with the organization and patient care services.  Those who don’t have a connection don’t care about this.  At all.

This isn’t the “change four words” identity from yesterday (although it could certainly start there).  These people need two different messages, possibly from two different people.

Yes, it’s harder to put into Excel.  But Excel isn’t the boss of your brain.  You can use your own thinking by employing “identity” — a characteristic that honors the donor and why they give.  Not coincidentally, this is also the more lucrative path.

Nick

4 responses to “Channel vs. Identity: Two Go In; One Comes Out”

  1. Tom Ahern says:

    I love everything about this. Corner turned here.

  2. Start with (define) your audience(s). Who are they? What message is relevant to each? How are we going to reach each of them? (in that order)

  3. Jay Love says:

    Amazing insights here!

  4. Thanks all! Gary, to extend your point, that strategy might — correctly — cause you to exit some channels wholesale. If your audiences are not on Snapchat or you can’t reach them with a message that is relevant for them and you there, then don’t do Snapchat. (Not to pick on Snapchat – this would be the same for Instagram or mail or phone or whatever.)