Thoughts for Dave Strauss

There won’t be one big thing, lots of little things that, combined, make the way we fundraise look very different from today or we don’t and we continue the very slow grind downward.

But the little things aren’t random, they are evidence based and coordinated.  As Eistein said, if the facts don’t fit the theory, get new facts.  The incremental, one-off test world that you note has no guiding theory of change or evidence base and it routinely violates this maxim which can be restated as all tactic, no strategy.

We either change because we see the light or feel the heat.  There is also a first-mover advantage for some of these ideas.  Economics gets a (deserved) bad rap but it’s undefeated in predicting that if there is a profit to be had, you’ll get enough new entrants into the market to drive that profit to zero.

Case in point: SMS lead gen via advertising in public transit – e.g., the Tube in UK.  Years ago, this was a new thing. We worked with a small(ish) charity that was the first mover.  The leads came via SMS and those people were instantly called to ‘convert’ to monthly.  For the first six months their cost to acquire a new sustainer was $60.  It increased by a factor of 10x in the next 6 months.

But the more things a brand does differently and well as part of this proposed, new approach, the harder it will be to replicate and ‘steal’ margin.  The lane for winning might look something like this:

Direct Mail becomes Indirect Mail

50-65 yr olds.  There are some period and cohort effects here. A smaller % of 50-65 crowd today have checks, far fewer use them as compared to the 66-80 crowd of today and certainly as compared to when that cohort was the same age.  Plus, there is a 50-65 cohort effect as those 50-65 yr olds before them were only moderately overexposed vs. today’s group that is extremely overexposed.

This is “unfixable” and will only become more of the case – people do not have paper checks and/or don’t use them.  There will be a time when nobody has paper checks, that day exists.

Direct mail has always had an indirect effect, this will grow at least linearly.

• This necessitates making indirect attribution measurement and reporting standard fare.
• There is need for new, innovative, test and learn thinking on how a piece of mail can serve as brand build impression, like a CTV or digital ad. Format is one thing but that’s scratching surface
• The precedent for this exists in spades now. Commercial mailers don’t have reply devices.  When is the last time you saw an order form in a consumer catalog?

Direct Mail Activation.

• The reply device has been in dire need of a rethink for years now.
• How can I get beyond the QR code thinking?
• Imagine there is no return envelope. The testing on this needs to start now – SMS text, phone, QR code next gen.
• Direct Mail as lead gen. Financial services do this already.   They operate on LTV and know that it’s ok for a lead to cost $1000 or more.

Personalization

We do real personalization at scale – Identity and Personality.  If part of your message isn’t aimed squarely at who they are, independent of brand and Issue X, then it is forever sub-optimum.  I am not pollyannish or hubris enough to think that this alone saves the sector from itself but to ignore it is to leave money on the table at a time you can least afford it.  The sector does almost none of this now.

 Retention is new acquisition.

I want credit for coining this phrase years ago.  I probably stole it but that’s beside the point…

A small increase in first year retention rates is the gift that keeps on giving.  To do this we must challenge the fact pattern – we send asks right away, see that only those who give, do so right away.

We miss the negative effects of this, plus ignore the likelihood that those 2nd gifts go away from that small sliver if don’t ask right away.   People give in spite of the asking, not because of it.

The only place to spend time with new, different thinking is newly acquired. This is the only thing that matters and this can be further reduced to the first 0 to 3 (or 6) months.  What happens in one-off giving is identical to what happens in sustainer giving, we just measure the latter and see the loss more acutely and accurately.  My decision to give again or not is made early.

What is the psychological need in the early days?  It’s not ‘thank’ and ‘report back’, those are too superficial.   We have lots of insight here, the new journey should reflect it.

Part of this is recognizing that Engagement is mostly bullshit.  I wrote about this already but we’ve turned this mental state into an mouse clicking outcome.  Most people are giving passively, they’d be highly satisfied with a certain experience that is minimal, not maximal.  If only we’d let them.

Auto-pay

This is partly mechanical, partly context effect testing.  The only thing that matters is getting people on auto-pay.  The % who are monthly should be dwarfed by those who are auto-pay once or twice a year.  That is the measure of success.

Direct Mail testing needs to include a heavy focus on getting auto-renew of the one-time gift, among other things.  The response form, context, etc.

Most charities get 1.6 gifts per yr/per donor.  That’s the average, plenty of groups suck wind at 1.3ish and a select few are closer to 2 gifts per yr/per donor.   In what world would one set out to get someone to do something twice a year by mailing them 15-24 times, sending 70 emails and serving up dozens of digital ads?

If you get a semi-decent sized minority of new donors on auto-pay, even 1x a year, you will start solving most of your problems.

 Reach vs. Frequency

Your ideal for any multi-mode, comm spending in an “on” period is a frequency of 1.  Every dollar that goes from reaching a person and moving them from zero exposure to 1 has a huge impact on immediate sales and longer-term brand.

Going from 1 exposure to 2 suffers from major diminishing returns, anything over that is, at best, having no effect.   There was data from a huge mailer, many millions in acquisition pieces and mailing every month.  It showed the response rate broken out by exposure over course of a year.  After two exposures response rate effectively went to zero or so low that you’d never get a return.

Having frequency of 1 and huge reach is impossible to achieve (especially with the digital hell of ad platforms) but nobody is even aiming….

The time for pulsing is way past due for large brands to test over time.  It’s playing out every day with smaller charities who choose to only mail 4-8 times a year and their retention is much higher.

Their response rates would make a nun blush.  Folly is thinking that diminishing returns are linear, they aren’t, they’re always hugely concave.  There is massive cannibalization of shifting dollars forward and irritation, this isn’t conjecture, it’s modeled out.