I’ll get to Coca-Cola in a moment.

First, I want to report on a wonderfully hopeful undercurrent of innovation and change that I sensed at last week’s Direct Marketing Association Nonprofit Conference in Washington, D.C.

Although the undercurrent has not yet reached tsunami or even riptide proportions, it is increasingly evident that concepts long talked about but seldom acted upon (for example, loyalty, commitment, donor engagement) are finally being translated into practical applications to improve retention and revenue. Improvement that goes far beyond simply adding an additional three or four appeals to the schedule.

The dots are finally being connected. By that I mean the dots between ‘concept’ and ‘practical or applied tactics’ that fundraisers can put to work immediately to raise more money and build stronger donor engagement.

Here are the signs of the ‘Innovation Spring’ I sense emerging.

• The Conference theme itself – Fresh Track… Ideas. Analytics. Results – seemed to reflect many of the conferees’ own attitudes. A significant number of thoughtful attendees I’ve known over the years were openly challenging business-as-usual-practices. Among the issues: The long term value of premium-based programs … ways in which to finally tackle the retention problem … the use of donor services outsourcing to create new profit centers for nonprofits … a new generation of predictive analytics, and much more.

• What pleased me most is the fact that some pioneering organizations and consultants have gone beyond just paying lip service to increasing lifetime value, retention, upgrading and, of course, net income;  they’re actually doing something about it as summarized in the next two sections.

• ‘Donor Behavior’ and the analysis of contributions and other actions by the donor has now clearly gone far beyond the primitive RFM stage where the most sophisticated and efficient organizations are concerned.For example, where housefile improvement is sought, DonorTrends, our sister company, has developed a series of seven DonorScores™ that predict donor behavior at every level of the donor pyramid. At the DMA I heard several success stories about this scoring system, including one from one of the nation’s largest Children’s Hospitals, who tripled the number of monthly donors compared to the traditional RFM select. Case study here.On the acquisition side, the first day of the conference Blackbaud announced Loyalty Insights and Lapsed Insights, two data services designed to segment acquisition prospects based on behavior.

• “Donor Attitude” is the far too long-neglected, yet equally valuable, flip side of the fundraising coin. It is the donor’s ‘attitude’ that drives the donor’s ‘behavior’.  Important, and also little understood, is the reality that donor ‘attitude’ is determined by the actions an organization itself takes – actions the organization completely controls. These actions – negative and positive – go far beyond appeals and frequency of mailings.For most fundraisers, conditioned only in behavioral analysis like RFM, the concept of donor attitude seems new and strange. But in reality it’s been the mainstay of consumer marketing in the commercial world for nearly 20 years.So I was delighted to see sessions at this year’s DMA devoted to explaining donor attitude and its financial value.

• In a session on “Understanding Satisfaction with the Donor Experience”, Anie Moore of Merkle, Alia Hamilton of CMI, and Craig Wood of the Clarity Group, revealed a just completed study on four health charities and how improvement in key areas of satisfaction leads to increased retention … and how this information is used to prioritize marketing investment for the greatest gains within specific segments.
• The U.S.Olympic Committee’s Jeffrey Hunt led off the second session on attitude with a focus on identifying the best core donors. Merkle’s Josh Wichard demonstrated how the Pareto Principle is used to identify the small minority of donors who drive the majority of income at the Committee.
• Finally, Kevin Schulman of DonorVoice revealed the results of a Donor Commitment Survey conducted by DonorVoice for the USOC demonstrating how attitude not only affects the level of giving, but how it can be used to identify prime donors missed by conventional behavioral segmentation.

In future posts I’ll come back to many of the exciting and practical innovations I learned about at the DMA Conference and will also tackle some of the concerns I heard expressed about the dangers of continuing some business-as-usual practices..

Meanwhile, “What about Coca-Cola?” you ask.

As I witnessed the long overdue evidence that some of the commercial world’s most effective tools are finally being employed by our sector, I was reminded of a thought provoking presentation given 18 months ago by Melinda Gates, Co-Founder of the Bill & Melinda Gates Foundation. Presented at TED and titled “What Can Non-Profits Learn from Coca-Cola?”

Regardless of what you think of Coca-Cola products, the company’s marketing – especially how it taps into the aspirations of its customers — is world class. While you might not aspire to global domination over the soda market or over AIDS and malaria, this 16 minute video is well worth your time in understanding the potential applications of commercial marketing to our world.

What business-as-usual practices bug you the most? What innovations are you exploring or thinking of exploring? Please share them with us.

Roger

P.S.  On a note not unrelated to change and innovation, George Smith,  a Fundraising Great, died on Friday, March 2^nd in the U.K. A creative pioneer, constant guardian of good English, good sense and fundraising good taste, George set high standards to which every fundraiser, every non-profit executive and board member should aspire.

I placed him in my Pantheon of Fundraising Curmudgeons and his selected writings in the book Up Smith’s Creek are must reading.

A moving and bittersweet tribute to George and his final days, written by his longtime friends and colleagues Ken and Marie Burnett, appears here.