Any discussion of metrics in The Agitator must include a nod to “The Curse of Fundraising Innumeracy” about an Agitator reader who tried to keep a straight face when someone said they had a 95% retention rate.  And clearly there is a problem when otherwise smart people with big budgets don’t “do” numbers.

But I’d like to talk about something else today that I’m guessing bedevils many an Agitator reader: you are numerate, but you report to someone who isn’t. Or the person you report to reports to someone who is innumerate.

I heard from an Agitator reader recently who was trying to convince her boss to keep the direct marketing program.  The program cost $600K, made $900K, and thus netted $300K.

The boss believed he could cut the direct marketing program and put an extra $600K toward the mission, since that was the cost of the program.  After much educating, he saw there was a $300K net, then said, “OK, we’ll only put $300K toward the mission and the extra $300K will cover the net.”

I wish I could say I’m joking, but I’m just anonymizing.

So, at the end of a week of metric discussions, it seems appropriate to ask how we explain numbers to the innumerate?

It’s blasphemy, but sometimes the answer is “without numbers.”

The good news is that we are well equipped to answer the bell on this.  What are our fundraising appeals if not ways of using numbers to summarize outcomes.  As in:

“We took your $20, combined it with a bunch of other peoples’ $20, paid ourselves, paid for the fundraising that helped you give $20, put the rest through a scientifically validated logic model for impacting change, and helped 198,209 people to various degrees last year.”

and turning that numerate description into:

?“You saved Sarah’s life. Thank you!”

So here are some of the stories I’ve told over the years.  They are oversimplifications.  You may need to shower after telling them.  But they are ways of explaining the business we’re in to direct marketing Muggles.

The leaky bucket.  Starting off simple, this is the answer to why we must invest in acquisition and retention.  You have a bucket with holes in it (I used to talk about just one hole in it, but that connotes that the water level can drop to a point below the leak – it can’t.  Multiple holes also shows that the leaking is lower when volume is lower – it’s easier to defend one thousand than one million donors).  That’s your donor file.  To get more water in the bucket, you must fill it faster than it’s leaking out.  So you can and should both fill from the top and get the holes as small as possible.

The magic box.  Why should we put $2,000,000 into direct marketing to get $3,000,000 out?  Isn’t that a bad ROI?  Sort of, and we are working to be ever more efficient.  But picture that you have a magic box where you could put $1 in and get $1.50 out.  Would you say “that’s not a very good ROI?”  Or would you put dollar bills in there like a lab rat who learns it can stimulate its own pleasure centers by hitting a lever?

The saggy mattress. The idiot you replaced cut acquisition for three straight years to try to make net numbers.  You’ve restarted acquisition, have a decent record over the past year, and have a good five-year-plus file.  But you still have a saggy mattress problem – fine on each end, but it dips in the middle.  (The opposite of this – when you have large spike of acquisition that moves through your donor file – is the sated snake digesting a meal.

This is usually good when accompanied by a graph that shows the value of donors acquired each year, so you can see how usually you have a large cohort of recent initiate donors to work with and, in this case, you don’t.  See an example of this type of graphic representation of the soggy mattress problem here.

Racing sailboats. In direct marketing, we obsess over getting small gains – a four percent increase in average gift here, a seven percent increase in response rates there.  You could try to explain your crowning moment of awesomeness to your boss by multiplying the 7% response rate increase times your entire program and giving them a raw number.  But humans – even the numerate ones – have trouble processing large numbers.  For example, people will donate the same amount to help 3,000, 30,000, or 300,000 birds.

Rather than with numbers, I like to explain it, as with so many things in life, with The West Wing:

Stacey King. Stacey King was a Bulls forward playing on the night that Michael Jordan scored 69 points.  Stacey King scored one point. After the game, King said “I’ll always remember this as the night that Michael Jordan and I combined to score 70 points.”

Why do you drop the outlying gifts when you are doing A/B testing?  They are Michael Jordan; you are marketing to Stacey Kings.

Why do you care about the transition from direct marketing to mid-major donors?  Because Michael Jordan matters more than Stacey King.

And this is adaptable to the sports leanings (if any) of the person you are talking to.  Because of my Packers heritage, I once modified this story to fit my leanings and crimes against retention calculation:

One presentation I saw earlier this year used a 75% retention percentage that was “retention + reactivation.” In other words, they combined two rather different activities – retaining the active donors you have and working to regain the ones that you have lost – making it more difficult to understand which activity led to their success (or if it even was a success).

Talking about these two things together is like talking about how Aaron Rodgers and I combined for 326 passing yards last week – a way of camouflaging that one of the two things may not be pulling its weight. (I’m not naming any names…)”

The magic letter. “Double your acquisition spend and you should be able to double the number of donors you acquire”, says your innumerate board member.  Ask him to picture what the response rate would be if you sent one letter to one person.  You’d pick that person very carefully and customize it to that person.  You’d probably follow up with them after to make sure they received it.  In short, you’d probably work it so you could get a 90% chance of them responding.

 Now, picture sending out two letters.  You’d hit the person who barely missed the cut for letter #1 – maybe an 89% chance of response.

And so it goes.  Each person you add to an acquisition mailing gets that much less likely to respond and less worth customizing your pitch to their individual desires.  And that’s why returns diminish as volume increases.

(If that board member was nodding and smiling during the Stacey King story, remind him what preseason football looks like – that’s what happens when you take the 22 best players off the field.  Now you are taking the best donors off the field – same thing.)

Dating analogies. Would you ask someone to marry you after the first date?  No, you’re best off using that time to get to know the person and seeing if this is a good fit.  Dating analogies are also good for explaining why you don’t want to come on too strong at the beginning of your relationship with a donor.

 What other stories do you tell when metrics aren’t getting through?

Nick