It’s time to stop… the donor pyramid

All pyramids are lies.They have a dishonest scheme named after them.  They will not keep your razor blades sharp or apples fresh.  They messed up the four food groups.  Maslow’s Hierarchy of Needs isn’t really true (in the sense that there are fundamental needs, but there isn’t a hierarchy).  Even the Egyptian pyramids were really built by aliens.  I know that last one is true because I saw it on the History Channel and you can’t have lies in history.

They have a dishonest scheme named after them.  They will not keep your razor blades sharp or apples fresh.  They messed up the four food groups.  Maslow’s Hierarchy of Needs isn’t really true (in the sense that there are fundamental needs, but there isn’t a hierarchy).  Even the Egyptian pyramids were really built by aliens.  I know that last one is true because I saw it on the History Channel and you can’t have lies in history.

i-am-not-saying

It’s time to give up the donor pyramid as yet another three-dimensional-triangle lie, something that desperate presenters shove into PowerPoint slides to give the illusion of intelligence.  (See also: clipart of stick figures doing things, photos of people shaking hands, any time arrows make a circle.)

So let’s see and know the enemy:

pyramid-12

It looks innocent enough.  But do not be drawn in by its tetrahedral lies.  These include, but are not limited to:

Steady steps up the pyramid.  Some illustrations even have a person climbing up the side of the donor pyramid like Yodeling Guy from The Price Is Right (I’m sure Yodeling Guy has a canonical name and such, but hopefully the description suffices).  In reality, steps are so frequently skipped as to render the metaphor useless.  Think of the little old lady who gave your organization $10 each year at Christmas, then left you a bequest of $400,000.  She skipped all of the steps.  You didn’t even try to get her to be a monthly donor, because your modeling indicated that she probably refers to going online as “The Google.”  And major donor?  Fuhgeddaboutit.  $10 per year.  She was probably the last person you were going to ask.  Literally, the last person.

I will bet the contents of my wallet (two dollars cash and seven receipts from my trip to DMA) that this experience happens more often than someone stopping at every step of the so-called donor pyramid.  At the point that the worst-case scenario for your metaphor is more common than your best-case, you have a metaphor problem.

More mundanely, it’s probably counterproductive to think that you are moving someone up one step at a time.  Take a look at monthly givers versus major givers.  Yes, you are probably going to invite your monthly donors to make major givers.  But if someone is giving you a thousand dollars through the mail and comes in high on wealth screening and affinity, you are going to start personal cultivation with that person (while not removing them from direct marketing, because you are not an idiot).  That will come at the expense of, and rightly so, an invitation to, and stop off in, monthly donor land.

The donor experience pinnacle is death.  If this is true for your organization, take a good long look at your donor relations processes.

Progress.  The donor pyramid has never heard of a lapsed donor.  When the donor pyramid thinks someone is about to say “lapsed donor,” it sticks its fingers in its ears* and says “lalalalalalalalalala” like a recalcitrant seven-year-old.**  The idea that you would have to get a donor back doesn’t occur to this pyramid – its donors are too busy ascending.

Meanwhile, in reality, lapsed donors are valuable.  They are less valuable than multi-donors, but more valuable than person-off-the-street.  But they don’t fit into the pyramid power’s progress.  So they are left aside.

This last point also shines the way to the better analogy: the donor flowchart.  It isn’t as aesthetically pleasing, but it is true.  In being true, it also helps us better conceptualize our process.  We need to differentiate major donor versus monthly donor asks.  We need to try to get our lapsing donors back.  And death is not the only way the donor story ends.

So congratulations, donor pyramid.  You make our list of Things to Stop Doing.  Now, if someone asks where your donor pyramid slide is, let them know that aliens took it.  After all, aliens are far more plausible than the pyramid-y version of the donor story.

* Yes, in this analogy, pyramids have fingers and ears.

** This author has a seven-year-old and knows of what he speaks.

It’s time to stop… the donor pyramid

Do do-gooders do good deeds?

Good deeds are an odd thing.  You would normally think that a moral choice would make one more likely to follow the path of virtue in the future.  And research has shown that that when people are told they are good people, they do good things.

On the flip side, researchers describe the licensing effect — the thought that a good act gives you the license to do a bad thing and still be balanced. .  

This is well described in a New York Times piece creatively entitled “How Salad Makes Us Fat.”

Researchers tracked shopping carts and found that selecting a virtuous product make one more likely to subsequently pick a “bad” product.  

strawberry_26_apple_salad

This is your meal? Clearly, you are going to hell.

Other studies have shown that people who have eaten something indulgent are more likely to do good deeds — compensation in both directions.

How can both of these be true?  Would you rather catch your donors coming back from the gym or the Krispy Kreme?  And is it better to remind your donors that they are good people, or remind them that it’s been awhile since they last gave?

One study has worked to reconcile these in the context of donor communications.  

In the study, people were sorted into three groups.  One group was asked to write about good deeds they’d done.  A second group was asked to write about bad things they’d done.  And, not surprisingly, the third group was asked to write about neutral things.  Then they were asked whether they would like to donate a part of their fee for participating in the study to charity.

Significantly more people donated, and donated more, from the people who were asked to think of good deeds than either bad deeds or neutral things.

This is consistent with the idea that people who think of themselves as good people are more likely to do good things.  People act in relation to their self-conception.  But how does this explain moral licensing?

The study discusses this as well.  It finds that more licensing happens mostly not when we see ourselves as good or bad, but when others see us as good or bad.  For example, in the study of shopping carts discussed above, we would be judged by the person checking us out.  And if you think this doesn’t happen, you have never worked at a grocery store.

This fits with our study on slacktivism: people who did good things to help people are more likely to donate; people who did good things to get recognition as a good person are less likely to donate.

This can be well summarized in the old saw “I’m not a racist — I have plenty of friends who are [name of target group].  But…”  The person is working to establish positive external conception before saying whatever is going to follow.

(Fun fact: in the history of humankind — literally tens of thousands of years of human speech — not one thing that came after the phrase “I’m not a racist, but…” has ever been good.)

So, in an ideal world, when your donor receives your communication, they would feel like they are a good person, but feel like everyone else thought they were a bad person.  A tough balance to achieve.

I believe this comes down on the side of reminding donors not only of the good they have done in the past, but also tying it directly to the good they aimed to do.  So it would never be “you’ve given to be a part of our Founders Circle;” it would be “you’ve given to save lives and help people.”  You are telling them that they only did it to do good, not for any greater glory.

Similarly, in your lapsed communications, you would be better off establishing that clearly the donor is the type of person who gives to appeals like this one than you would be reminding them that they had lapsed.

Thus, this framing isn’t of donations like the previous few; it’s a framing of the donors that can help your appeals.

Do do-gooders do good deeds?

But you are free not to read this post…

This week, we’ll talk about some framing that can help increase your donations or your likelihood of getting donations.

Some examples we’ve already covered:

  1. Framing your gift against a hedonic good works. That is, you can increase giving just by saying things like “that’s less than the cost of a Starbucks venti coffee.”
  2. Referring to something as a “small” fee can make people more likely to pay that fee. 
  3. Framing gifts in the context of social norms and social proof (e.g., circling a gift and letting people know that’s the average gift for the campaign) can increase the average gift significantly.
  4. Anchoring is just a pretty pretty frame you put around your desire to get larger gifts. 
  5. People are more likely to give to prevent losses than secure gains

The first one we’ll discuss this week is giving your potential donors freedom and agency.  It’s great in large part because it has a meta-analysis* behind it.

You can set up this freedom with a phrase as simple as “…but you are free to say no.”  Psychologists have a few different theories as to why this works.  One hypothesis asserts that as humans we crave control.  When someone asks us to do something (and, let’s face it, in a lot of our nonprofit communications, we lay the “why” on thick, as we should), we believe they are working to control us.  Refusal, then, is a reassertion of control.

Another hypothesis asserts that by telling someone that they are free not to do something, it feels as though we are giving them something. Reciprocity influence then demands that the donor give something in return.

I think it’s probably part of both of these, combined with a little bit of the unspoken “…but what type of person would you be?” at the end of the free to say no line.  Regardless of the exact mechanism, this technique has been shown to:

  • Increase donations face-to-face from 10% to 47.5% (study here
  • Increase face-to-face surveys completion from 76% to 90% (study here
  • Combine well with foot-in-the-door techniques (study here

And that meta-analysis says that the technique is effective across a variety of platforms. However, it did find that the effectiveness was slightly less in non-face-to-face ask situations; it also found that it is better if the thing you are asking a person to do (or not to do — it’s up to them!) is immediate.

So this is a technique you can add to your copy to increase donations.  If you’ve tested this, I’d love it if you can let us know your experience in the comments or at nick@directtodonor.com.  Also, if you enjoyed this, you may enjoy our weekly newsletter that covers topics like this in more detail.  But, of course, you are free to say no…

 

* A meta-analysis is research-speak for “we’re going to read all of the studies and summarize them for you in one paper.”  Think of it as the Cliff Notes if Cliff weren’t lazy and condensed all of Shakespeare down to one volume.

 

But you are free not to read this post…

Welcome step three: Ask again

Now you have thanked someone for their gift, you’ve used both asking and revealed preferences to learn about your donor, and you have given your donor opportunities to learn about you.  Once all of this is established, you should ask again.

I’ve said earlier that the welcome series time doesn’t matter too much to me, as long as you are accomplishing all of these objectives.  I’m going to give lie to that here to say that you should be trying to get to this point fairly soon (within 15-30 days online; within 30-60 days offline).  Contrary to your intuition and the indignant cries of your board members that they would never give again so soon after making a first gift, this window is actually your best opportunity for getting that second gift.

And it is critical to get that second gift, for a couple of reasons:

  • Your likelihood of retaining a donor goes up significantly after a second gift.  This is why I advocate not looking at a monolithic retention rate.  Instead, it’s best to break down into retention among new, first-year, lapsed reinstated, and multiyear donors; the retention rates among these are really that different.  Indeed, that’s why on Monday I said that a one-time giver is not really a donor.  Retention rates after first gift are really that low.

  • The second gift sets the tone for the rest of their relationship with you.  Looking at one of the studies we’ve discussed on ask strings, you can see that first-time donors are fluid in terms of their giving. They are in a place where it is literally better to ask them for anything but what they gave previously.  Multidonors, on the other hand, need to be asked for what they were asked for previously.  Ask them for too little and they will downgrade; too much and they will not give.

1280px-Blacksmith_workingImage source here.
It’s a metaphor for a reason: cool metal hardens — only when it is hot is it pliable.

If you have done your welcome series/letter/email/whatever well, this ask should be natural.  You’ve learned about them, you’ve customized your ask to specifically what they want to hear about and who they are, and you know that what you are asking them for is something they will support.

Because of this, and because of the fluidity of first-time donors, I strongly advocate that this second ask be an upgrade in amount or degree.

After all, your ask now should be improved from your semi-blind graspings in acquisition, where your goal was to cast your net far and wide.

And you can drastically increase the value of your donor (to you and hopefully to them) by upgrading them to a monthly giver.

There are some who advocate for acquiring with a monthly giving ask (and, in fact, acquiring with only a monthly giving ask).  As I’ve mentioned, I don’t have the guts to try this yet, other than in means like DRTV where the medium is too expensive to try anything else.  (If you’ve done this, please write in the comments or to nick@directtodonor.com.  I would love to share your experiences with the readers of this blog and/or to read them myself).

But post-acquisition, you may have the perfect storm of factors to lead someone to become a monthly giver:

  • They are still in the glow of their first gift
  • You’ve created a customized experience for them
  • They have not yet become set in their ways of how they give to you.  We’ll talk more about mental accounting at some point, but suffice it to say that people have different boxes of finances in their heads.  Once you are in a box, it is difficult to break out of it unless the person’s finances or perceptions of you change.

We’ll dedicate a week to monthly giving, but you’ve already seen some of the tactics you can bring to bear in this upgrade ask:

It’s definitely worth testing against a more traditional upgrade strategy that would ask for a larger one-time gift.  So test away, but make sure both versions incorporate what you know about the donor.

Welcome step three: Ask again

Welcome step two: Learn more about your donors and engage them

You’ve now created a gap between now and your normal communication stream for your new donor.  What do you do next?  As any Londoner can tell you, you now need to

bakerloo_line_-_waterloo_-_mind_the_gap

We know in case after case that personalization increases the effectiveness of direct marketing.  And not just making sure the person’s name is spelled correctly: it’s about making sure you know why they are giving and are thanking and soliciting them under those auspices.

With a new donor, you will have a single data point with which to start.  They responded to theme A through medium B.  You can leg your way into donor knowledge as we recommend by changing one thing at a time, but that won’t help you get that second gift.  And even if you are doing well, 60-70% of the time, you won’t get that gift.

Previously, I’d talked about the two ways of getting information about your supporters: watching their behavior and asking them.  It turns out those are the two things you should be doing in your welcome communications as well.

The critical step, and the one most often missed, is setting up opportunities for behavior watching and for feedback.  Or sometimes we go to the opposite extreme and send an email for every little bit of our mission we can think of, drowning the donor or prospect with a deluge of did-you-knows.

The way to maintain that balance with your supporters is to give them three major opportunities:

  • To use you as a resource.  People are more likely to support organizations that solve their problem.  This can range from “I want to eat more sustainably but I’m drowning in a sea of cage-free, organic, cruelty-free, etc. labels and don’t know how” to “I donated to suicide prevention because a friend committed suicide, but now I’m having these thoughts…”.  We nonprofits are (or should be) experts in our area and we can help in these areas.  And, as a much secondary effect, it allows us to see our supporter as a person. 
  • To use you as means to accomplish their goal.  If they donated to a particular issue, they may also want to write their legislator about it — that may give them the same (or similar) warm feeling that donating did.  Or they may want to volunteer in a very specific way that helps them achieve the same end their donation did.

 

  • To learn what they think.  You want to know how you can serve them better.  This can be through a survey or an open-ended question.  Or this can be an opportunity to bring in a different medium by having a human call them, thank them, and ask for why they gave and why to you.

The larger point here is that these should be framed in how they help the donor or cause, not how they help you.  It’s amazing how much of a difference there is between “We are also on social media, so like us on Facebook and follow us on Twitter!” and “Our Facebook community helps parents of children with autism support each other, so please join in if you’d like to hear from others who have been where you are.”

It goes without saying that you should track these activities.  If someone sends back the petition in their mail package, advocacy is something that appeals to them.  Thus, the way to get them to be a higher value donor may not be to get a second gift through the mail (although you should try); it may be to get them to be a frequent online advocate, then ask them after an online petition to become a monthly giver to support the specific advocacy activities they enjoy.

It’s even easier online.  If someone clicks on your link for more information for parents of kids with autism, you know they almost certain fall into this category themselves.  This is a programmatic opportunity as well as a fundraising one, but all boats will lift if you have this information and use it to help the person in question.  Links that you send should be trackable and appended to each supporter’s record so you can customize your messaging.  

The alternative is to become the cable company that asks you for your phone number with their automated system, then has a person ask you for it, even though caller ID is a thing that has existed for a while in this universe.  If someone tells you something, they will expect that you know it.  And clicks are, believe it or not, communication.

There is a lot of ink and virtual ink used on how many emails or mail pieces you should have in a welcome series, how long it should last, etc.  You’ll notice that I don’t cover any of that here, because I don’t find it to be all that important.  If you can accomplish the thank you, learning, and engagement all in one communication, go for it.  On the flip side, as long as a welcome series is about supporters’ interests, it’s difficult to say that it is going on too long.

Welcome step two: Learn more about your donors and engage them

And you shall know your constituents by their deeds

There are two ways to know your constituents better: listening to what they do and asking them what they think. Today, I’ll talk about the former; tomorrow, the latter.

Yesterday’s piece talked about how you can roughly define an individual’s responsiveness by medium, message, and action.  The trick is that we often segment by only one, possibly two, of these.  We have medium covered: most large-scale programs of my acquaintance distinguish among people who are mail, telemarketing, online, multichannel, etc. responders.  And many small-scale programs haven’t begun to integrate medium, so in a way this is its own segmentation.

Sometimes, we will use action as a determiner.  We’ll take our online advocates segment and drop it into one of our better-performing donor mail pieces (frequently not customizing the message to advocacy, more’s the pity).

We rarely segment by message, even though picking something that people care about is the most basic precondition of the three.  After all, you may not like telefundraising, but you’d at least listen if it was immediately and urgent about something that you care about.  And it’s much easier to get someone to do something they haven’t done before for a cause they believe in than to get them to do something they’ve done many times if they don’t believe in the message.

The good news is that you have your constituents’ voting records, of a sort.  Consider each donation to a communication a vote for that communication and each non-donation (or, if you can get it from email, non-open or non-clickthrough) as a vote against that communication.

[tangent] This is also a helpful technique for when your executive director comes into your office and says “I’ve had five calls today from people who aren’t happy about [insert name of communication here].”  If you reframe it as five people voted against it by calling and five thousand people voted for it by donating, the noisy few are not nearly as concerning.[/tangent]

A proper modeler would use the data from these votes to run a Bayesian model to update continually the priors on whether or not someone would respond to a piece.  As you can probably tell, I’m not a proper modeler.  I prefer my models fast, free, and explainable.  So here’s how I’d use this voting data:

  • Take all of your communications over a 3-5 year period and code them by message.  So for our hypothetical wetlands organization from yesterday, this might be education, research, and conservation.  Hopefully, you don’t have too many communications that mix your messages (people donate to causes, not lists), but if you do, either take it by the primary focus or code it to both messages.
  • Determine the mix of your communications.  Let’s say that over five years this wetlands organization did 25 conservation appeals, 15 education appeals, and 10 research appeals.  This makes the mix 50% conservation, 30% education, and 20% research.
  • Take your donor file and pull out only those people who donated an average of at least once per year over that 3-5 year period.  This will ensure you are looking only at those people who have even close to sufficient data to draw conclusions.
  • Take the coding of communications you have and apply it to the pieces to which the person donated.  Generate a response rate for each type of message for each person on your file.
  • Now, study that list.

In studying that list, you are probably going to find some interesting results:

  • There are going to be some people (a minority of your file but likely a healthy segment) that only gave to one type of message.  And you’ll see the pattern immediately.  Someone who gave eight times over five years to education appeals and never to conservation or research appeals is clearly an education donor.  You will look at all of the other communications you sent this person and all of the people like her in the X-issue-only segments and you will weep a little.  But weep not.  You can now save your costs and these people’s irritation in the future by sending them only the communications about their issue area (with the occasional test to see if their preferences have changed).  It’s only a mistake unless you don’t learn from it; if you do learn from it, it’s called testing.
  • You can also probably lump people who gave rarely to other messages in with the X-issue only people.  So if someone gave to nine of the ten research appeals and to only one each of education and conservation, they clearly have a strong research preference.  This is why it’s helpful to look at these data by response rates — you can see where people have ebbs and flows in their support.
  • You will also see people who like two messages, but not a third (or fourth or however many you have; I will warn you to minimize the number of buckets, as you will not have a large enough sample size without).  So if someone gave five times, three to education appeals and two to research appeals, education and research both appeal to this person with a 20% response rate.  However, conservation doesn’t apparently appeal to them, so you can reduce communications in this realm.
  • You’ll also see a contingent of folks who donate to communications in roughly the same proportion that you send them out.  These people can probably be classified as organizational or institutional donors.  It will take far more digging than mere file analysis to figure out what makes this donor tick.

This leads into an important point: these will not get you to why.  Even things like how often a person gives for how long or Target Analytics Group’s Loyalty Insights, which can show if the person is giving uniquely to you or to others, are transactional data.  While useful proxies, they can’t tell you the depth of feeling that someone has for an organization or let you know what ties bind them to you.  To do that, you must ask.  That’s what I’ll cover tomorrow.  But hopefully this gets a little closer to information that will help you customize your donor’s experiences.

 

And you shall know your constituents by their deeds

Understanding and using Facebook’s algorithm

Facebook is the nexus of a lot of debate as to how best to incorporate social media into other marketing efforts.  My argument will be there is a twofold Facebook strategy: 1) using organic content to engage your superfans and 2) using addressable media to reach everyone else.

the-social-network-movie-poster-david-fincher-381x600

500 million users.  How quaint.

Like Google, the base of the Facebook algorithm (EdgeRank) is fairly easy:

  • Affinity: How close the person creating the content is to the person receiving it.
  • Weight: How much the post has been interacted with it, with deeper interactions counting more
  • Time decay: How long it has been since it has been posted.

These interactions are multiplied together and summed, roughly.

Like Google, however, it has been altered over time significantly.  There are now significant machine learning components baked in that help with spam detection and bias toward quality content.  Additionally, now users can prioritize their News Feeds themselves.  Finally, because of the sheer amount of content available, the organic reach of an average post is single digit percentages or below, meaning that if you have 100,000 likes, maybe 2,000 people will see your average post.

The implications of this base algorithms are stark:

 

  • Organic reach on Facebook is for the people who really love you.  Many people think of Facebook as a new constituent acquisition system.  However, people who come in dry will almost never see your posts.
  • Consequently, only things that connect with your core will have any broader distribution.  Think of who is in the top two percent of your constituents: employees, top volunteers, board members, and that may be about it.  If those people don’t give the post weight, no one outside of this group will see it.
  • What you have done for them lately has outsized weight.  Research into Facebook interactions shows that Facebook gives outsized weight to what a person as interacted with in their last 50 interactions.
  • Facebook is not for logorrhea like Twitter.  Think of your posts as a currency you spend each time.  If your post gets above average interactions, you will move your average up and interact with more people; if not, your reach will lose.  Posting too many times (which varies from organization to organization) will diminish your audience as average reach will decline).  Additionally, all of the things you have to post for organizational reasons (e.g., sponsor thank yous) are spending your audience and you have to assess how much you are willing to spend to fulfill those objectives.
  • This all adds up to the uber-rule: Facebook is for things your core supporters will interact with quickly.  If they don’t, it won’t reach your more distant supporters and it will lessen the likelihood that your next post will reach them as well.
  • It also relates to the second uber-rule: because Facebook can change its algorithm as it wishes, you should not build your house on rented land.  The best thing you can do with your interactions is to direct them to your site, to engage your content and sign up for your list.

This all sounds a bit dire, so I should also highlight how to reach the other 98%(ish) of your Facebook audience as well as some of your non-Facebook audience on Facebook: addressable media.

Facebook allows you to upload a list of your supporters and target advertising to them specifically whether or not they are current Facebook likers of you.  You can learn more about this on my CPC ads post here.  This also goes into lookalike audiences, a way of getting people who aren’t who you talk to currently, but look a lot like them, a nifty acquisition trick.  Since organic reach won’t get you to these loosely and non-affiliated people, this is the only way to achieve that reach.  And, since it is cost-per-click, you can control your investment and your results.

But like discussed above, these campaigns should be to build your relationship to people outside of Facebook.  For the same reason companies advertising on CBS don’t work to build a greater relationship to CBS, but rather to the advertising companies, your advertising on Facebook shouldn’t be aimed at getting Mark Zuckerberg et al more friends — they have over a billion of them already.

Understanding and using Facebook’s algorithm