For our viewers joining the program already in progress, for the past two days, Betty (arguing in favor of better donors over more donors) and Mo (arguing in favor of more donors over better donors) have been debating. Today, the final round of the debate: intangibles.
Mo: The implications of focusing on fewer donors scares me. My thinking is that you will draw the line at five dollar donors and cut quantity and donor volume accordingly. Then, when you have fewer people on file and higher per piece costs, you’ll have to move that line up to ten dollars. And so on down a death spiral.
Betty: As we’ve established, the amount that I’ll save by not having to have expensive means of communication to donors that aren’t going to pay back helps our bottom line. If anything, focusing on higher-value donors is a way of getting out of a death spiral by cutting out the people who helped us get there.
And we know that number of donors on file is a false metric. It ignores that some people are worth inherently more to the organization than others.
My concern is that there’s only so much time and attention you can give to a direct marketing program. Too much of it goes to the Sisyphean task of trying to get $5 donors to become profitable. Why not focus on what matters?
Mo: Because bulk matters too. When we go to lobby for legislation, officials ask how many members we have. They notice if we are a force.
And upgrading got us where we are. Look at your current high-value donors. They were $5 donors 20 years ago. It was cultivation and upgrade strategies that made us what we are.
Betty: That’s fine and dandy back when acquisition could turn a profit. But every year, acquisition becomes a little harder and a little more expensive. This isn’t kindergarten where everyone has to have a turn. We are accountable to all of the donors that we have that we use their donations wisely. If we aren’t getting net money from a person, we owe it to all of our donors to let them go.
Mo: Why not just customize your donor stream for them where you can make a profit?
Betty: You should if you can, but you can’t always. And keeping them in the mail stream does something else: it starts making your pieces that win in tests the ones that are tailored toward a lower common denominator. That’s the death spiral you should worry about: the temptation to cut costs by doing things like not personalizing pieces that don’t matter as much to the most marginal segments of your file.
Verdict: I’d like to know what you think at email@example.com. Personally, I buy some of Betty’s arguments here. There always is a threshold at which you need to cut some donors off. Rationally, then, it seems like there should be a threshold at which you should try not to acquire them. What that threshold is will vary from organization to organization.
So tomorrow, we’ll talk about the implications of if and where you choose to draw the line.