Why convert?  And to what end?

To quote Tom Harrison, Russ Reid CEO, why are nonprofits mad at about 50% of their donors at any given time for donating (in the “wrong” way)?

In its attempts at conversion the sector either makes too many assumptions or too few and too many attempts to convert the wrong donors to the wrong something and not enough trying to convert the right ones to a convertible something.

So what gives with all the effort, time and waste trying to convert donors who give in one way, even predictably so, to another way?

Having worked with every consumer sector one can reasonably think of we simply don’t ever remember being a part of a conversion conversation EXCEPT in the case of getting non-payers to be buyers.  For example, converting abandoned virtual shopping carts to sales, converting brick and mortar showcase browsers to buyers or converting free users to paid.  The free to paid conversion is the freemium business model that is increasingly the norm with mobile apps (especially gaming apps) and SaaS based software.  Hook them on free and include lots of incentive for them to move to a paid version.

But none of these dynamics mirror what is happening in the non-profit sector.  The donor/buyer/customer develops a modicum of a relationship with a non-profit around one product and is then barraged with inordinate amounts of direct mail (from the org they gave too AND the direct competitors offering the exact same thing to whom the name was sold) that assumes they are all the same AND has no connection, unless by chance, to the event/experience/product they already bought.

Why?  This is not us just being contrarian.  It is questioning what appears to be an act of crazy.  And the conversion rates in the sector support our assertion that this is a misguided and incredibly expensive exercise.  If that same energy, resource and time were put against building legitimate product extensions and upgrades – a mainstay in the commercial sector – then the sector and causes supported by it would be immensely better off.

Here are a few classic examples of the folly of conversion if the goal is net income and lifetime value.  If the goal is headcount of “good” donors by some internal definition then by all means continue the misuse of funds to produce woeful conversion rates.

Event to “mission” donors.

Here is what we’ve learned about event donors.  The number one driver of their Commitment to the organization is a good experience at the event.  This means delivering a brilliant event experience – from the parking to port-a-potty logistics to quality of the sound system – is the absolute best way to support your mission to ensure repeat participation and positive word of mouth to lower your recruitment costs the next time around and create a pool of event donors who are ripe for upsell and cross-sell to OTHER EVENTS or event-like activities that closely resemble the experience these donors assign value to and are willing to pay for.

Whether event donors are connected to the organization and mission by some internal definition is immaterial.  If a person consistently participates in events year over year and is engaged in word of mouth that lowers subsequent recruitment costs why are they necessarily any less worthy or profitable then the direct mail donor?   And on what basis is it assumed the participation in the event is not mission in the first place?  Because they don’t respond to a subsequent, unrelated direct mail appeal that internally is defined as “mission-oriented” but to the event participant is either the wrong ask, at the wrong time or so incongruous with the most recent experience that they simply tune out?  Why aren’t we trying to convert direct mail donors to event participants?  The idea that the direct mail donor is the gold standard is a dangerous mindset but one that is firmly implanted in the sector.

That the pool of event donors is considered a warm prospect pool that potentially yields a better return than cold list acquisition is an indictment on the latter, not a validation of the former.

If better yield for the fundraising dollar is the goal then why not focus on having an event donor do more events (cross-sell) or agree to a higher fundraising target (up-sell) for the next event?  Or, how about some innovation and product development work to come up with “event-like” options for further cross-selling?  Cross-sell and upsell make a ton of sense.  “Conversion” because somebody somewhere has decided that making everybody a direct mail donor is the goal is misguided at best.  The last time we checked, the money all spends the same.

Disaster donors to “mission” donors.

These donors are not at all connected to the organization.  They don’t convert well at all.  They are almost more hassle then they are worth.  These are the assumptions and mindset in the US non-profit sector.

In the UK they are having significant success “converting” one time, mobile text2give donors who skew WAY YOUNG to regular, monthly donors.  They are doing this by re-soliciting in the exact channel and by the exact method that got the relationship started in the first place – the mobile device – with a text based upsell attempt and then a phone call to the mobile device.  The monthly ask is tied to the disaster at hand as an illustration of what the money can be used to help support.  The monthly ask is very low – about $3.50 a month – to account for financial realities of these much younger donors.

The list of reasons that would be supplied by most in the US fundraising world as to why this scenario won’t work is too long to cite.  We would argue the main and perhaps only reason it won’t work here is that it won’t be tried.  What will be tried with reckless abandon in spite of repeatedly lousy results is putting these same disaster donors into the direct mail stream to “convert” them.

Converting from premium to non-premium or said another way, from product to mission. 

The base assumption here is that premium donors are not real donors and that they are too expensive to maintain since they always require (increasingly expensive) premiums.  This begs the question of why start with the premium in the first place but we know the answer so we can skip the digression.

Back to the conversion question of premium to non-premium.  At least this effort typically stays within the same direct mail channel and so much like using mobile to convert from 1 time to monthly it benefits from that tactical consistency.

But, who says the product buyers (or premium responders) aren’t supporting the mission with their purchase or premium induced gift?  Why do we feel compelled to make them non-product buyers?  What about getting better product and more product and better margin to increase the average purchase size and lifetime value?   The “ask” in the premium or product business never changes and is almost always low dollar.  Why?  We have evidence and data showing donors assign more value to a hooded sweatshirt than a t-shirt and yet we charge the same for these products (i.e. ask for the same amount) even though they have different pricing curves AND differential cost to the charity.

 P.S. We are certain some of those reading this will cite the diatribe about the fundraising pyramid and that “converting” donors to the base of the pyramid is what provides the necessary volume to assure some work their way to the top of major giving and planned giving.  This is dangerous folly.  The requirement of massive volume to feed the mythical direct response pyramid is killing the sector. 

The American Cancer Society is almost a 1billion in revenue and yet the direct mail base of the (non-existent) pyramid is only 5% of total revenue and has now been eliminated.  Surely others will follow.  Might this have some impact on the top of the non-existent pyramid?  Sure, in the short term it might.

But the truer reality is that non-profits have, almost in spite of themselves, different lines of business and product lines – including major givers and planned givers who are NOT organically grown from the pyramid base.  That they can be “grown” is not an argument against the existence, in abundance, of “non-organic” giving to these separate lines of business. 

The problem is the sector has to manage these product lines in ways that work – namely cross-sell and upsell of rationally “connected” (based on donor feedback and research) product and offers.  Instead, the sector tries to merge and blend the lines of business into a mythical donor pyramid that is built and defined by response to direct mail.