major giving

Breaking down the “my donor” mentality between direct marketing and major gifts

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The first thing that many major gift officers will instinctively do when they see their donor portfolio is to shut down direct marketing efforts to those donors.  After all, you want the donor to take your call and don’t want them mistaking you for a telemarketer.

Imagine if you tried this in any other walk of life.  Imagine going to Jeff Bezos and saying “this person has been buying a lot of stuff from us on Amazon.  Let’s make sure they never get another email from us, because I really think that I can sell them the Lladro Niagara chandelier for $100,000 (plus $4.49 shipping, which is either far too much for shipping or far too little).”

bond_villainHe would laugh at you until he got stomach cramps.  Or he would have an underling, possibly with a mechanical arm, throw you in a vat of piranhas while he stroked a cat.  All depends on the mood.

Bottom line, it’s silly to take someone who has been donating routinely by one means and, by all available evidence, been satisfied with it and cut them off from that means in the hope they might give more.  You should only change this if the donor asks you to (in which case, you should do so immediately, while smiling) or if you have a relationship with the donor to the point that there’s an alternate communication strategy in place.

That said, the major gift officer is right.  You don’t want to treat a potential donor the same way as a potential $10 donor.  This is not a defense of sending someone with the capacity to give a transformative gift the same 12-mail-pieces-and-a-cloud-of-dust approach that everyone else gets. It means:

A donor newsletter.  You hopefully are doing this already.  And you hopefully are basing it on Tom Ahern’s Making Money With Donor Newsletters.  In case you aren’t, your donor newsletter should:

  • Focus on “you” — you being the donor
  • Focus on what “you” did — progress updates and impacts
  • Have short articles
  • Be written for skimmers — white space, bullets, and compelling headlines and images
  • Have a return envelope but not be as “ask forward” as a traditional mail piece.

This more cultivating newsletter will help you make money from these donors.  But it also creates a holding pattern for your major gift officer.  You’ve already made the segue to what impact the person can have, leading to a more natural conversation when the officer is able to get in front of the donor.

Higher-touch communications.  This can be simple things like crossing out the impersonal salutation on a letter and writing in “Dear Nancy,”.  Paperclips in your mail pieces show that the piece has been touched by human heads.  First-class postage is a nice touch, as is expedited postage to get the mail piece to the donor.  One nonprofit of my acquaintance has their CEO write a holiday letter in blue ink, then copies it on the color copier for a handwritten appearance.  These are techniques that can segue naturally to higher-value communications with a major gift officer.

Higher-value communications.  We’ve discussed the supreme value of exclusivity.  A major donor may want to be able to get a sneak preview of your upcoming report or have an exclusive briefing call with your head of government affairs.  These types of velvet rope communications can build to events where major gift officers can meet with them face to face.  Once natural enemies, direct marketing can set up the major gift relationship.

Helping define the major gift portfolio: You are looking for one of two things: a long giving history with multiple gifts per year, increasing gift amounts, and participation in the mission or someone who makes an unusually high first gift.  Usually the first group will be better prospects.

Thank extremely well.  Have you ever heard a potential major donor consider not making a major gift because they were thanked too well or too often?  Me neither.

Overall, you are looking to create a spirit of cultivation with these donors.  And you should give of your donors to your major gift officers.  By being a strong resource for them, you prevent them from trying the nuclear suppression strategy with you, allowing you to maximize revenue from these donors over time.

Breaking down the “my donor” mentality between direct marketing and major gifts

“Our donors” and channel conflict

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According to psychological studies, human territoriality is a multifaceted concept that includes physical space, possession, defense, exclusiveness of use, markers, and personalization.   

giphyI think of Milton from Office Space.  He possesses his personalized red stapler in his tiny cubicle fortress than he does not want to leave and eventually fights to defend. 

How often are we like this with our donors?

Even the phrase “our donors” is illusory.  A donor no more belongs to your organization than I belong to Google just because I am dependent on their search engine and mail programs for even the most basic forms of knowledge seeking and human interactions, respectively.

OK, bad example.  But you get the idea.

A donor doesn’t really belong to your organization; they are free to leave at any time (and frequently do).  

And they certainly don’t belong to any one aspect of your organization.

Yet we aim to possess donors, erect walls for their defense from other types of fundraisers, even mark our territory on them.

The thing that got me thinking about this is Joshua Benton’s excellent piece with NiemanLab about NPR’s decision not to promote the NPR One app or its podcasts on its terrestrial radio stations. 

They will not ask for any downloads or mention podcast hosts in a way that would be seen as an endorsement.

Part of this is understandable.  Radio stations pay the bulk of NPR’s bills.  These stations want to hold on to their share of ear and make sure that people listen to radio stations.  They exert pressure; NPR folds.

But this feels very much like the classic Theodore Levitt article about Marketing Myopia:

 

The railroads did not stop growing because the need for passenger and freight transportation declined. That grew. The railroads are in trouble today not because that need was filled by others (cars, trucks, airplanes, and even telephones) but because it was not filled by the railroads themselves. They let others take customers away from them because they assumed themselves to be in the railroad business rather than in the transportation business. The reason they defined their industry incorrectly was that they were railroad oriented instead of transportation oriented; they were product oriented instead of customer oriented…

 

OK, a virtual show of hands.  Who thinks that NPR’s long-term future is in traditional radio-wave-based radio?  OK…  OK… thanks.  Hands down.  

Now who thinks their long-term future is in online radio, podcast, and things we haven’t even thought of yet?  OK… OK… keep them up… there are a lot of you to count…

Yep.  Exactly.  Yet because of territoriality, they mortgage the future for the present.

So what business is NPR in?  Are they in the radio business?  Or are they in the informational (or entertainment or thought-provoking) business?

The same is true for your nonprofit.  You put up barriers to protect your walk donors from being over-solicited or make sure your major donor prospect don’t get mail pieces that might soil their hands.  You make sure that national/local doesn’t get their stinkin’ mitts on “your donors” because that money should stay local/national.  As if it matters which pocket gets filled.

In what business are you in your direct marketing?  If you are not in the loving-donors-and-being-loved-by-donors business, might you be in the wrong business?  If a $20 mail donor becomes a $500 walk team captain, and that fills that donor up with warmth, do you view that as a $20 loss?  Then you are in the wrong business.

So this week, we’ll try to explode some myths about “our donors.”  They are not only your nonprofit’s donors.  They are not permanently destined to stay in a single channel.  They are not national’s or local’s.  They can be communicated with both personally and through direct marketing.  And so on.

And we’ll discuss some solutions, including a potentially radical (ironic) solution on Friday.  You won’t want to miss it.

Or, if you do want to miss it, hopefully we’ll catch you next week!

“Our donors” and channel conflict

Influence in direct marketing: scarcity at work

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Scarcity as an influencer should be of no surprise to those who know basic economic theory – as a good gets more scarce, assuming demand remains the same, the price will rise.

Given this, you might think it has no impact on nonprofits, as we sell no goods.  Even the corollary to the supply and demand argument – the idea that there is a psychological fear of missing out that makes people want an item more – doesn’t work for nonprofits, given that one person’s donation makes you no less able to donate.

And yet scarcity can be a powerful motivator in nonprofit direct marketing when harnessed correctly.  Here are five ways how:

Back-end premiums.  This is a way of mixing scarcity with reciprocity.  In the reciprocity piece, I mentioned that back-end premiums (aka the public radio tote bag model) can help increase your donations.  Now, what if there were only so many of those tote bags, calendars, or whatever other premium you have available to go around?  By limiting the premium to only the first X number of people who donate (or take whatever other action you are aiming for), you can have scarcity working for you.

I would recommend layering on a third influencer – social proof – and setting the number of giveaways above what you would expect to get in terms of actions.  This not only mitigates the likelihood that people will take your action and not get the potential reward.  It also has the benefit of making it seem like many people will be taking this action.

Matching gifts.  A matching gift deadline can create scarcity of time – by limiting the amount of time someone has to make a gift in order for it to double, you create urgency in the desire to give that gift.

Exclusivity of information.  In reciprocity, I mentioned that giving someone information that they wouldn’t be able to get elsewhere is a good way of creating the desire in them to reciprocate.  The key part of this is that the information must be scarce – giving someone something that the general public would or could know does not trigger the desire to reciprocate.

Done well, you can also build in authority and/or social proof to this.  Let’s say you do a conference call with a select group of high-dollar donors (scarcity).  The lead speaker is an expert on the harm that your cause is trying to end (authority); supporters can ask questions of him/her (reciprocity and scarcity, as you are providing a unique experience for them) and hear that there are other interested donors on the call (social proof).  Then you follow-up with a transcript of the call for everyone who was invited but couldn’t attend to make sure they can this important information.

Exclusivity of opportunity.  This can also work well with social proof.  Which one of these volunteer opportunities is more appealing:

  • We desperately need more people to help serve lunches this week to the homeless.
  • There are only six slots left to help serve lunches this week; we may have more opportunities available next month, but it is first come, first serve.

Through a reframing, you have turned your lack of volunteers into an exclusive experience for those people looking to help.

Event exclusivity.  Many of your high-end type events are exclusive in terms of guest list, but there are opportunities for exclusive beyond just this velvet rope effect.  Table sponsorships are one: as you will only have so many tables, you can advertise the number left (and, if you are doing well, ask sponsors to reserve their spots for the following year).

Then there are auction items. In a traditional (non-Dutch) auction, auction winners are like the Highlander: there can be only one.  The exclusivity of a package leads to higher prices as both the auction structure, which economics shows is the way to get the good to the person willing to pay the most, and the fear of missing out on an exclusive good conspire to maximize the price achieved.  The best nonprofit auction images are experiential items that cannot easily be purchased on Amazon – this exclusivity makes it so that only one person can possibly get the item.

The exception to this was a nonprofit I worked with that had an auction item go far beyond the expected price.  Apparently, while the bidding was ever-increasing, they were able to talk with the person providing the experience and negotiate another package.  Thus, at the end, they were able to provide a package to the second-place bidder as well, doubling their rewards.  This was a brilliant strategy – using exclusivity to get the maximum possible price, then expanding the pool (only slightly, so as not to cause regret among the first-place bidder) to maximize returns.

This week has been dedicated to the idea of major influence levels you can use in your direct marketing and development areas.  I would be remiss if I didn’t once again recommend the original book itself, as it has examples behind what I’ve provided here.  Thanks for reading and I’d love to hear examples you have from influence in the comments section or (if you are willing) in a guest blog post – just email me at nick@directtodonor.com if you’d like to post your success story.

Influence in direct marketing: scarcity at work

Influence in direct marketing: liking at work

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you-like-meHat tip to The Interview Guys for the image

Liking sounds like it is exclusively the property of face-to-face asks, where you work to be liked so as to directly solicit a gift.  There’s a reason that we direct marketers stay behind a desk while our glad-handling extrovert brethren ask for major gifts. (In my case, it’s introversion, a love of numbers, and a face most suitable for print.)

Did that self-deprecating humor make you like me more?  Good!  Then we can continue with the post.  (Also probably for the best that you think it is self-deprecating; there’s a reason this blog has no picture of me.)

There are three major areas in which the psychology of liking can give us a significant advantage, even when we aren’t physically with a person.

The first is in persona.  Not the hip marketing term where you put a name, face, and demographic/psychographic profile of your constituents, also that’s a bit of the idea.  Rather, it’s who the virtual faces to your brands are in your various communications.

In The Audacity to Win, David Plouffe talked about their digital strategy for fundraising and who quality signers were for various content:

To keep things fresh, we varied the length and tone of the messages–some were long and informative, others quite short and informal. Perhaps most important, we learned that people responded very well to e-mails from Michelle Obama and that we needed to use Barack somewhat sparingly–when he signed an e-mail it always produced by far the biggest response, but we did not want this to become a stale event. So many of the e-mails came from me, though when we needed a big response to an ask–for money, volunteer time, or to watch an event–we made sure the e-mails came from the Obamas.

To me, this speaks to a compartmentalization of voice: Barack Obama was the primary persona in the campaign, used for speeches, policy positions, debates, etc. etc.  Because he was everywhere and in every media, a communication needed to feel special.  However, Michelle Obama did not present in the same way.  A communication from her was able to touch different emotions, make different points, and, frankly, be liked in a way that you can’t like a person that you agree with even 90% of the time, because that 10% will always be in the way.

So who are the different voices in your organization and how do you use them?  I would recommend an inventory of people and uses.  For some, a victim/survivor is one certain type of voice.  A head of policy or government affairs can be the attack dog that your advocacy supporters and donors want to hear from.  A development staff member or volunteer can be used for institutional appeals – renewals of membership or reminders to fulfill pledges – so that your passionate voices aren’t drawn into this bureaucracy.  A celebrity can bring in his/her followers to the fold, even if they are loosely affiliated at first.

And so on.  Some even might want to transcend the human – would an animal charity want to have an official spokesdog?  I recommend using a person as a mouthpiece for a specific type of communication to a specific type of person who wants to receive that communication and will like the person who is the messenger. 

Don’t have institutional messages that aren’t from someone.  So many e-newsletters fall into this  trap.  They are from the National Conglomeration for the Amelioration of Sesquipedalianism, when they could be from Rachael.  I don’t know Rachael, but because she’s a human, people will generally like her more than the monolithic NCAS.

The second is in being liked by liking.  As with consistency, praise for past actions will get you everywhere.  People generally like people who like them.  Similarly, flattering works and since I mentioned that yesterday, here’s another study that shows this, lest I not be giving you sufficient value.

The third major impact of liking is that people are more likely to like people like them.  I’ve seen a 30%+ increase in response rate to a communication when people were told that the story they were hearing happened in their own state – and that includes states like California or Texas, where the case may not have even been within a full day’s drive.

Similarly, people reaction better to communications from, and about, people of similar age, background, religious persuasion, racial or ethnic breakdown, educational background, and so on and so on.  This is not to say that you should go out and create “the Hispanic mail package.”  In fact, please don’t.  But customization can help you talk about how the problem you are trying to solve affects the people like the person you are talking to.

These rich details given a good picture of a person and the more someone can picture a person, the more they like and empathize with that person.

So these help your communications make your voices, and you, more liked and bring in donations.  After Christmas, we’ll talk a bit about authority in influence.

Influence in direct marketing: liking at work

A direct marketing bridge to… major gifts

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Direct marketing specialists and major gift specialists seem to be opposites in style and approach.  One is impersonal, mass-market, with knowledge of the aggregate not the specific – the marketing equivalent of the Air Force; the other is all about personal relationships, forged one on one, with intimate knowledge of that one person you are pitching – the equivalent of boots on the ground Army or Marines.  This can often cause them to be rivals in the same ways the service branches are; they can also work together to accomplish a mission together like the service branches.

As a direct marketer, developing a small budget to a major gifts program is part defensive.  I once worked with a major gift officer who would mark a donor as no mail, no phone, and no email the moment they got on her radar screen.  Not only did this deprive us of the only real source of revenue we had from these donors, but it also deprive the donor of the information that was tethering them to the mission and tugging at their heart strings.  And when she left, we had no way of differentiating real unsubscribes from these unsubscribes of pseudo-convenience.

This is going to happen if you can’t create a positive experience for potential major donors in your direct marketing program.  Yet it can happen and it can cost tens or hundreds of thousands of dollars for the nonprofit.  There are only two reasons to stop communications with your potential major donors in this way: 1) if they ask you to or 2) you have a relationship with that donor to the point that there is a substitute communications strategy and ask framework in place.

So your role in direct marketing is to build the relationship with the donor over time.  This doesn’t necessarily mean a slower cadence; rather, it means different types of pieces, including a donor newsletter telling them about their accomplishments – the true impact of their giving.  It can also include higher-touch, higher-value communications – handwritten notes or cards, invitations to special events or briefings, or the like.  These can enter the communication stream gradually as your relationship builds.

Direct marketing is also a great vehicle – in fact, a primary vehicle – for identifying those donors who may be receptive to a major donor ask.  While some amount of wealth is certainly a necessary condition for a person to be able to make a major donation, the more important thing to the organization is the tie to the organization.  People often forget this.  If I had a nickel for every time a nonprofit brainstorming potential targets thought of hitting up Bill Gates or his foundation because of a friend of a friend, I would be blogging about what yachts are the most fun to waterski behind.

bill_gates_july_2014

If this man is your major donor strategy,
you do not have a major donor strategy.

What you are looking for is:

  • Giving history – long, repeated, multiple gifts per year, and increasing gift amounts
  • Participation – telling a story, coming to an event, volunteering
  • A clear passion for at least one aspect of your mission either from his/her giving history or participation

The one exception to this is people who make unusually high (whatever this is for your organization – probably between $100 and $1000) first gifts.  This is probably a person who has been interested in your cause for a while or has an important reason to start giving now – they may be ripe for personal interactions as much as your loyal long-term donors.

Looking at this compact list, you can see that you can not only help solicit major donor prospects, you can help create them.  This is by incorporating upgrade strategies into your communications.  If you have well-defined recognition for different levels of giving (and you should), you can make those aspirational, especially for those on the cusp of reaching them, by making the ask for the next highest level of recognition.  Those recognition levels should also be a prominent part of your mail, phone, and online communications, as well as your acknowledgments for these donors.

Finally, remember to thank extremely well.  If you are at lost as to how, check out 50 ways to thank your donors.  Some are usual, some are a bit nutty, but they may spark some ideas to giving your major donors and potential major donors the love they deserve.

A direct marketing bridge to… major gifts