Why Good Enough Is No Longer Good Enough: Part 1

May 31, 2017      Admin

I ended my last post No One Wants More Email with the admonition, “We all need to get used to demanding more information and start challenging the status quo. Why? Because nothing, absolutely nothing is more dangerous to our future than acceptance of the status quo.”

No area of the fundraiser’s work is more deserving of serious exploration than the process of donor acquisition and the essential next steps of proper thanking, onboarding and learning the donors’ identities and preferences.

Sadly, few organizations are willing to invest the time, money and skill in this critical process. That failure screams out through the statistics of abysmal first-year retention rates.

The days of launching an acquisition campaign without setting aside substantial time and funds to properly deal with new donors finds most organizations on the decline or on a pretty flat plateau when it comes to growing donor value and net income.

Thank heavens there are folks like Lisa Sargent, who have made it their life’s work to hammer home the importance of a proper and timely thank you and the communications that follow.

But to those fundraisers who believe it’s enough to simply say “thank you” and then begin the business-as-usual bombardment of their donors, I say this:

It’s way past time our trade understand the importance of discriminating among donors at the start of the donor journey rather than wait and then resort to the tired old RFM transactional approach after folks have started giving beyond their initial gift.

There’s a growing body of evidence that waiting for that second, third or fourth gift before modifying the experiences/journey/stewardship offered donors may be too late. A growing body of research says there’s a better way.

My goal in this series is not to provide some encyclopedic list of “do’s” and “don’ts”, but rather to share what others have discovered or are discovering about the importance of focusing on donor discrimination at every step in the journey — especially at the beginning. And to also ask you to do the same.

Why should we bother? Why make life more complicated than it already is?

In Part 1 of this series I’ll focus on a point made by Nick Ellinger in his The Death of Average post on the DonorVoice blog. It’s a stage-setter for why discriminating among donors with the use of tools beyond the traditional RFM (Recency, Frequency, Monetary Value) is so valuable.

Nick writes, “There once was a time when good enough was good enough. No more. Average is treading water. Even just the difference between average and above average (the 60-80% tier below) is the difference between doubling your giving in 3-4 years and doubling your giving by your retirement party.

“Last month’s Fundraising Effectiveness Report shows us why. Here is the year-over-year gain versus loss of gifts from 2015 to 2016:

 

“As you can see, the difference between a top 20% nonprofit and a bottom 20% one is the difference between doubling gifts and almost halving them. But we should also take no comfort in the middle. The average nonprofit increased their giving by 2.2%. And the latest US inflation rate was 2.4%.

“That means it’s time to shrug off good enough and ‘best practices’ that are being done by everyone, including the average.”

Nick advises, based on the research conducted both by DonorVoice and others, to “look at every contact you have with a donor and ask if there’s one thing you can do to improve…

…The tie to a donor’s identity — who they are;

…The tie to why the donor gives to you — their commitment to your organization;

…The donor experience — making the donor happier for having dealt with you.”

I’ll cover identity, commitment, and experience in detail in other parts of this series but I wanted to surface them early on because they are what often moves an organization to above average status.

Here are some results Nick cites as examples of their importance:

  • An organization that asked two identity questions at the beginning of a telemarketing script, then played those back to the person at the end increased their giving by 15%.
  • Another organization that segmented its donors by their commitment to the organization has had three five-figure gifts from donors who had been raising their hands in the past but were not called on because transactional data alone (RFM) hadn’t identified them as targets.
  • A third organization measured their donors’ experience on their website and, with a few tweaks, increased their donation form fulfillment from 12% to 32% in one month.

Take the last example above to see how measuring donor experience can make a difference. As Nick explains:

“This organization implemented a post-donation survey and a donation form abandonment survey online, so they were getting feedback from those who donated and those who didn’t.

“All in all, their form had 50-60% of people saying it was ‘very difficult’ to use. Text analysis of the free responses that people had gave us a few culprits:
– Their email and web confirmation pages were four pages long to print
– Their form wasn’t mobile friendly
– They had a huge image on the top of the page that made it load slowly
– Instead of simple $50 buttons, you had to read through multiplier copy that read “$50.00 to send $10,500 of X”
– They hadn’t incorporated PayPal

“So, over the period of a month, they started knocking these out one at a time to the point they were all fixed. Conversion went from 12% to 32% and the people who said the form was ‘very difficult’ went from 50-60% to less than 1%.”

If we’re going to make our organizations’ fundraising programs above average there’s no escaping the reality that we must change both our mindset and our methods. We should be willing to do — and share — more experimentation, employ new metrics and, of course, invest more time, more money.

In the next parts of this series I’ll explore with case examples — especially those focusing on new donors — the importance of going beyond the usual “best practices” and explain why what we consider good enough no longer is good enough.

Roger

 

 

 

2 responses to “Why Good Enough Is No Longer Good Enough: Part 1”

  1. Joy Olson says:

    Absolutely Spot On!!!! Best Practices are so status-quo in this day and age of missile speed and accuracy learning opportunities!

  2. Excellent points all. When there’s real research pointing to what works and why, it’s just dumb to ignore it. Now we know. Before we didn’t. Shame on us if we continue to act… just dumb. “I don’t have the time/resources” is an excuse not to do the work. Which is why organizations don’t grow, and remain status quo.