Less contact, more revenue? Some for-profits think so

July 20, 2017      Kevin Schulman, Founder, DonorVoice and DVCanvass

The nonprofits who have made the decision to mail less frequently must think they are going nuts. Organizations like Union of Concerned Scientists, the U.S. Olympic Committee, and others have seen positive net results by communicating less frequently and with more focus on the donor. Yet I have heard three different people from three different agencies opine they have never seen a case where fewer communications means more net revenue in the short or long term.

Am I taking crazy pills?

(As a side note, all three agencies to say this either were getting paid per piece or owned their own printing presses. I’m sure this is entirely coincidental.)

This “I’ve never seen it; therefore, it can never happen” is one of the three most frequently marshaled arguments against trying what donors are most frequently asking for – fewer communications asking for donations. The other two are:
1. If fewer communications made more money, then the most money would be made by people who don’t communicate at all. This argument is easily set aside.
2. If this were successful, then for-profit companies would do it.

Setting aside that many retailers don’t mail you 20-30 times per year and have customized their marketing to you (see also: Target knows you are pregnant), this latter argument has more heft. It would be compelling if for-profit companies would not “leave money on the table” by decreasing frequency. After all, many sites right now have so many ads on them, NASCAR drivers are asking them to tone it down a bit.

That’s why it was great to see the Wall Street Journal’s piece entitled “Online Publishers Try Reducing Ads to Boost Revenue” (thanks to the This Old Marketing podcast for making me aware of the article).

In it, they say “some publishers say they’re now taking a “less is more” approach when it comes to placing ads across their sites. Stripping out irritating ad formats and limiting the number of ads forced on visitors can actually result in more engaged consumers and ultimately increased ad revenue, they say.”

But is it working, or is this one of those trend pieces that tries to tell me that hip young men will be wearing jodhpurs this fall (according to the American Jodhpurs Council)?

Spoiler: it’s working. Publisher LittleThings removed a form of advertising from its site every quarter. And the results? The site generates less revenue from each page, but more revenue overall. The CDO there says “Users view more pages, share more content and are generally more engaged.” The same thing holds true for donor experience and engagement – people are more likely to want to stay your donors if you are using their time and attention wisely.

LittleThings also found that fewer ads help the ads that remain. That’s what we’ve found as well when removing communications: you lose the revenue from the communication itself, but because most of that revenue was cannibalized from other communications, the performance of the surrounding communications increases 10-30%. This (plus the decreased costs from not mailing) increases net revenue.

Yes, this is just a few companies trying this. And, yes, online ads are not quite the same as nonprofit communications. But the direction here is important – for-profit companies are noticing that they can increase their long-term revenue by trimming the marketing and customer experiences that subtract value for their customers.

We know it’s tough to tell, though, what is adding value. That’s why we combine commitment and experiential data – survey results that aren’t in your CRM – with the results data that you already track. From there, we can figure out what matters, how much, and what people think of the experiences that matter. If this interests you, you can learn more here.

Are you doing your own experiments to mail less and make more? Please let us know in the comments – there’s strength in numbers!