RFM segmentation alone must die

220px-lev_trotskyRecency, frequency, and monetary value (RFM) are the ruling troika of segmentation-land.  And like one of the old Soviet troikas, they brook no challenge to their rule (e.g., Trotsky, pictured at right, was murdered on Stalin’s orders with an ice ax).

But they are simply not good enough alone anymore.  I tried to be civil about this in my post Beyond RFM.  But beyond is not good enough.  We need to let a million flowers bloom in the world of segmentation.

This means taking the “7-12 $15-$19.99 multi-donor” view of segment out for a date with your ice ax.

OK, not really.  It’s still going to be a decent starting point.  But it has to stop being the ending point.  Even for those of us that have to leave complex modeling to people with more letters after their names.

So this week, I’d like to take you through various different ways of figuring out the all-important question “is communicating with this donor in this way going to help achieve my goals of net revenue, quality file growth, and/or world domination?”.

And the first topic that should be layered on is listening to what a donor’s behavior is telling you.

Part of this is non-donor behavior.  You likely already have this information if you have the donor’s email.  You can potentially tell if they’ve been to your Web site, how often, how long they spent, and what they looked at.  You definitely should be able to know how they’ve reacted to emails you’ve sent them in the past.  The difference in a lapsed donor who still regularly opens your emails and clicks on the articles versus one who, according to your email records, may or may not be dead is a significant one.

If you can get robust data, so much the better, because now you can not only include people in a communication they may not have received before, but also customize it based on what they are interested in.

But some of this is donor behavior you already know, but RFM filters out.  Channel is one. Take an online donor who is reliable and frequent at donating online.  If you’ve mailed her/him 25 times over the years to try to get him/her to donate, but s/he hasn’t responded, chances are that s/he doesn’t want to give through the mail.  Personally, I’ve found telemarketing to be the most persnickety channel: those who give through it really give through it; those who don’t, really don’t.

Another is cadence.  If someone has given you ten gifts in the past ten years and all of them have been in November or December, my money is on the fact that you can ease off the gas in May.  One program of my acquaintance runs a membership campaign that starts every January.  There is about five percent of their file that will give a membership gift like a clockwork every January or February and then nothing for the rest of the year.  Should you stop trying to get extra gifts?  No.  Should you cut your cadence way down and save yourself some costs?  Yes.

These are things the donor probably thinks they are telling you explicitly with their behavior.  It’s now incumbent upon you to listen.

Because tomorrow, things get a little bit harder, as we talk about lifecycle and loyalty.


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RFM segmentation alone must die

Escaping fixed ask strings

Most of the science of ask strings that we’ve talked about is related to variable ask strings that depend on who the potential donor is.  However, when acquiring new donors, this is often not possible, since you know little to nothing about who the person is (yet).  Thus, while we’ll talk mostly about variable ask strings or topics that apply to both fixed and variable ask strings, it’s important to discuss fixed ask strings.

Namely, don’t use them whenever possible.  Yes, they are necessary for some acquisition purposes, but the effort to customize them to even what little you know about a donor is worthwhile.  Some tips:

Online donation forms are usually customizable.  CDR Fundraising Group estimates that this simple step can increase your response rate by 50% and your average gift by 40%.  In fact, they’ve posted code for how to do this in Salsa Labs. What if you don’t use Salsa Labs?  Usually searching for “dynamic ask strings XXname of giving platformXX” will get you some tips on how to.

But if these tips are Greek to you, you can always take a shortcut: setting up multiple donation forms with different ask amounts and sending the links to customized segments of your audience.  This isn’t ideal, but it gets you most of the way there.  Even if you take a very shortcut and have a $100+ versus under $100 versions of your donation form to send, you will be customizing the experience for your online donor a little bit.

Use intelligence from your outside list selects.  If you are like many organizations, your outside list selects will feature a minimum threshold below which you won’t accept donors (often $5 or $10).  Chances are you have tested into these amounts:one list is productive without a threshold, so you haven’t incurred the cost; another had subpar performance, so you asked for a more select group of donors.

Chances are, your $10+ donors from one list will behave differently from your $5+ donors from other and from your “anything goes” donors from list number three.  Thus, you can use this threshold as a customization point for your fixed ask, making sure to ask people who give more for more.

Make sure your ask string testing doesn’t select just one winner.  When you test an ask string in acquisition, there’s a temptation to treat it like a traditional control and test, where a winner is chosen and rolled out with.  Here, however, you may find that even though the majority of lists performed best with your control ask string, there were a few lists that had demonstrably better results with your test version.  Since different lists have different donor characteristics, you may get better results by keeping with an ask string that better fits those donors.

Use modeling to determine your ask.  List cooperatives will be only too happy to create models for you.  Chances are, they can do a response model that maximizes response and another that maximizes average gift.  The folly is when both of these groups get the same ask strings when they were set up with different goals in mind.

However, you don’t have to use a co-op or pay a PhD to run a basic model.  Simply take the average gifts from your current donors at acquisition by ZIP code, standardize them (rounding to the nearest five or ten for fluency), and use that as the basis for your fixed ask strings.  After all, there’s no reason you have to treat 90210 as the same as 48208 in Detroit.

Make sure you are using information from multichannel giving when running a conversion program.  Sadly, walkers, event donors, volunteers, online donors, and e-newsletter subscribers are often dropped into an offline acquisition with nary a thought as to ask string.  Please don’t do this.  You could be asking your $500 online donor or your gala chair to sign a $20 check.  It’s debatable whether it would be worse if they didn’t give a gift or if they did.

Instead, make sure all giving, not just channel-specific giving, is taken into account when formulating your asks.  Additionally, even if someone has not given, you can apply filters like ZIP code or historical data (e.g., last time, your volunteers’ average donation was twice that of your e-newsletter subscribers; why not ask for twice as much?) to your ask string.
Hopefully, these tips help make even your fixed ask string more customized.


This is a special bonus Sunday blog post.  As I was writing my mini-book on ask strings, I realized this was a topic I hadn’t covered yet on the blog, so I’m putting up a draft version of the content here.  Please let me know what you think at nick@directtodonor.com so I can improve it.  And, if you would like a free copy of the book when it is ready, sign up for my weekly newsletter here.

Escaping fixed ask strings

Using your real estate better: online images

As we discussed in the stop doing giant wads of text post, it’s a good idea to break up your text with images.  But too often online images stop at the first level of work for you: they show the problem or make the donor feel better or the like, but don’t do anything else.

We’re going to put pictures to work for us to do second and third level duty.  Here’s how.

Follow the eyes.  We discussed this a bit in what we can learn from political campaigns.  It’s one of my top 200 blog posts so far, so I’d recommend a read, but the TL;DR version is that we follow where people’s eyes are looking or where they are pointing.  Since having a homepage image of people pointing to your donate button is a little on the noise, having your image subject looking at the donate button can do this work for you.  Here’s a heat map sample from that earlier post:

Engage the multichannel donor.  It is well into 2016, which means not only am I no longer writing 2015 on my checks; I’m no longer writing checks.  Another implication of it being 2016 is that people are going to go to your Website to see what you are doing before donating.

So it’s to your advantage to tie the solution you telling on your site and in your offline communications together with the use of images.  If your mail piece tells the story of the impact of your mission on a child, it’s great to have a further picture of that child on your homepage with a link to the story and the ability to donate.  While you should have a personalized URL in your piece, a person may not be sitting down at their computer (laptop, phone, tablet, watch, etc.) with that mail piece in hand.

Insert key messaging.  And only key messaging.  Take a look at charity.water’s homepage monthly giving ask.  Very few words — just the essentials.  

water

 

Embed your ask in the picture.  You’ll note in the heat map above that even before we look at eyes, we seek out faces.

If the image is where people are going to be looking on your site anyway, where better to begin your ask?  If that ask is an email sign-up, you can probably do all of that in the same picture (as you only need first name, last name, email address, and maybe state or zip code.  What?  You are asking for more information on your email sign-up?  Have you tried asking for less and seeing what the difference is?  You can always ask for more in the welcome series.)

If that ask is an online donation, you might as well as for some of the starting information in the picture.  Most often, you can get someone to pre-select their donation amount in the initial image.

One of the cardinal rules for donation forms for a number of years has been to minimize the number of clicks necessary to complete the form.  Recent tests that I’ve seen may indicate this is no longer the case.  I hypothesize a few reasons for this:

  • We humans have a poor understanding of sunk costs.  A multistage donation form, then, gets people to take the first few steps quickly and then asks for more, getting the person to think “well, I’ve come this far.”
  • Multistage donation forms can often render better in mobile devices with smaller screens (and worse keyboards).
  • E-commerce has taught us how to use multistage forms.  Think of the arrows at the top of your Amazon order page telling you what step you are on and how much further you have to go.  The fact that you can probably picture an Amazon order page shows how common this has become.  (I’m not judging – I’m surprised it’s not burned onto my retinae).

Anyway, getting the person to give you the amount first asks as a commitment device and pre-checks the “sunk cost” box.  And you are saving a step: rather than clicking on donate, then putting in the amount, they are able to combine these.

Using your real estate better: online images

Using your real estate better: post-donation interaction

Online and telemarketing donations have a unique feature that few other direct marketing interactions have: you are still communicating with them once they have made their donation.

Obviously, a large part of this post-donation interaction should be aimed at confirming that the donation was made and sincerely thanking the person for contributing to the cause.

But there is a unique opportunity in these interactions to get additional value from and give additional value to your donors; it’s the time between donation and processing.  A person has selected an amount, given their credit card (or EFT) information, and decided to make the donation (whether online or by phone).  But the person or the series of tubes has not yet processed the credit card.

You may not even have known there was a time in between donation and processing; I know it took me years before realizing this.  But you can put a shadowbox on your donation page immediately after someone hits “Submit” (or hopefully a more creative button like “Save Lives Now!”).  For telemarketers, it’s just a part of the script.

Since the donor is unlikely to turn back at this point, it’s an ideal time to explore an additional option with them (and I do mean “an” in the sense of “one and only one” – we do not want to turn off the donor).  There are two goals you can have for this: upgrade in amount or upgrade in kind.

If you are looking to upgrade in amount, I would suggest:

  • Selecting a small amount – something that is 10% or less of your normal donation in the medium.
  • Tying it directly to a tangible and immediate win for the donor – e.g., “if you add $3 to your donation right now, you’ll be feeding a child three healthy, lifesaving meals in war-torn Freedonia tomorrow.”
  • Making it very easy to say no and move on with the original donation.  This is not a circumstance to let the better be the enemy of the good.

Because of the limited upside of this tactic, I would suggest the second option: aiming for an upgrade in kind.  This will almost always be trying to upgrade to a monthly gift.  Some tips on this upgrade:

Don’t get greedy.  One of the more frequent upgrade strategies attempted online is a check box that says “repeat this gift on a monthly basis” as part of the donation form.  There are three problems with this:

  1. It explains none of the reasons why you would want to do such a thing
  2. It’s stilted, non-donor-friendly language
  3. It’s before the donation is attempted.  In this case, if the donor is turned off by this half-asked ask, there is no donation.

You want to make the donation ask small enough that it seems like a similar amount of money to what they have already pledged to give.  While you will want to test what this amount is for your organization, I’d advocate a rule of thumb that you’d want to start at about a quarter, plus or minus, of what a person has pledged to give.  Thus, if someone wanted to make a $100 gift, ask them if they would like to make a $25 monthly donation instead.

It doesn’t take a rocket surgeon or a brain scientist to see that this will take at least four months to pay off.  But the average monthly donor is far more loyal than the average one-time donor and will likely extend out past this four-month mark.  And, since we humans value present money more than future money (witness the exchange rate we are taught between birds-in-hand and birds-in-bush), this seems reasonable-ish to the prospective donor.

Explain the benefits of the upgrade to the organization. Your donor has already made the tough decision: to donate to you in order to help people.  If there is a way that they can be more effective in their giving, they are more receptive to it at this point than almost any other (and, at the very least, are not that likely to be turned off by it).  So let them know that giving a smaller amount per month helps even more, because it’s predictable revenue that helps you get through lean times together.  You’ll also likely want to have some strong social math here (what does their $10/month do in terms of tangible benefit) as well as positioning against a hedonic good (“that’s the price of a cup of coffee each day”) to help you win the upgrade.

Explain the benefits of the upgrade to the donor.  Of course, to some extent, being able to help more people is a benefit to the donor – that was their goal going in and they are able to do more of it.  However, there are also tangible benefits as well:

  • Ease.  No more forgetting a donation the donor might want to make.
  • Budgeting.  The donor would be able to budget for donations on a monthly basis, which is how our mental accounting systems usually work.
  • The donor will be able to cancel at any time.  This is critical in the pitch.  You want people to know that you want only 100% satisfied* donors and thus want them to have freedom in their donation.  This is also because one of the primary mental objections to setting a monthly donation is “what if I change my mind?” (and its close cousin, “what if the organization does something I don’t like?”).

You can also put in whatever benefits your organization has for monthly donors (e.g., special member card, donor newsletter, etc.), but I would test it both with and without.  You might find your donors are more drawn in by the mission and the impact they are having and don’t want that special relationship cheapened.

Speaking of special relationships, I’d like to have one with you through our weekly newsletter.  You can sign up here and get the week’s updates in digest form, along with late-breaking thoughts and information.  Thanks for reading!

* Perhaps even donors who are 110% satisfied, for those direct marketers who are bad at math.

Using your real estate better: post-donation interaction

Let’s get small: microimprovements

402px-david_von_michelangeloThere is a story, perhaps apocryphal, that someone watched Michelangelo retouching every inch of one of this statues.  The bystander asked him why he bothered with such trifles; the artist replied “Trifles make perfection. And perfection is no trifle.”

In the direct marketing world, it’s difficult to say that there is such a thing as perfection.  You will likely never see, in any quantity, a 100% response rate or open rate.  But our goal is to strive, to seek, to find, and not to yield.

There rarely is an idea that you have that will double the completion of your online donation page.  But you can find 16 ideas that each get you five percent better, each one compounding to double your response.

So without further ago, a few small ideas that may make small (or big) differences.  In no particular order:

Change the color of your donate button to something not approved in your brand guidelines.  It will stick out.  Good.  Things that stick out get clicked on.  When this starts to lose its effectiveness, change it again.

Reduce the size of your download.  A Sprint phone downloads an average of 11 MB per second on 4G .  We can easily design pages with enough extra code and random things to download to cost an extra second.  One second lost means 7% fewer conversions.

That’s probably why water.org has their homepage look like this:

water

But their donation page looks like this:

 

waterdonationpage

Increase customization by a variable.  If you do name, do name and location.  If you do name and location, add in donation history.  Et cetera.  These are more than 5% tactics

Add a small donate bar at the top of your site.  Human Rights Watch reported (at DMA’s DC nonprofit conference) that the below orange bar and a larger orange footer on their site increased donations from the home page by 256%.  Many days, I’d settle for 2.56%.

Go into Google AdWords.  And do what it says to do.  If it recommends splitting up your keywords, it probably knows that doing so will allow you to customize your copy.  Punctuate your headline properly.  It knows that increases click-throughs.  And so on.  It will keep bringing up these opportunities; you just have to act on them.

Try adding a picture.  Not necessarily guaranteed, but a quality picture will usually improve a home page, mailpiece, donation page, content marketing, etc.  I’ve found a significant difference in the traffic I get from blog posts with pictures over those without.  Hence David hanging out at the top of this one.

Call some donors.  Ideally some of your best, but these thank you’s will both help with the donor’s loyalty and give you ideas for things you can try (or stop).

Take some fields off of your donation form.  Phone number?  Ask for that afterward.  If you have the ability to divine city and state from ZIP on your form, go for it.  You are looking to streamline this process.

Similarly, reduce the clicks to get to the donation form.  Hopefully, it’s one or zero (that is, you can start entering info on the Web page).

Remove the navigation from your donation page.  Now is not the time for someone to want to look at your executive’s pictures.  Four tests show improvements from the tiny to the oh-my-goodness here.  

Run a test.  Are those ask amounts correct?  How do you know?  If you are mailing, emailing, or calling with the same thing for 100% of your communications, you are missing out on your 5% opportunities.

Hopefully, one of these gets you 5%.  If it does, please leave it in the comments.  If it doesn’t, please let us know in the comments what did.

Let’s get small: microimprovements

Let’s get small: microseconds

You haven’t got long.

We’re on to the next email, text, phone call, app.

Literally milliseconds.

What you have to do:

Make the first online images count. People know what they think of a site faster than they blink.  That impression carries over.  It impacts content, action, and donation.

Make the first words count.  Average reading speed is about 140 WPM.  Average subject line is about 7 words? (makes math easy)  Ergo, subject line = 3 seconds.  That is, if you are reading and not skimming.  You are skimming.  So’s your audience.  Be sure to use pre-headers as well.  I’ll talk about those next week.  Subscribe here to get an email when it’s up.

Evoke emotion.  Emotion hits the brain 3000X faster than rational thought.  Reason hasn’t got a chance to set the hook.

Load quickly on mobile.  Only 11% of people expect content to be much slower on their phones.   One additional second = 7% decrease in conversions.  One. Bleedin’.  Second.

Send those thank you’s quickly.  Thank you speed is among the best predictors of retention.  Long-term and short-term.

Don’t wait for your mail testing.  Test to your mail audience online.  Facebook and Google ads = messaging tests.  Subject lines = teaser copy.  It’s not entirely representative.  But it will predict disasters well.

Make the ask.  The act should be in the first three paragraphs of the letter.  They need to know why you are writing.

Flood the zone.  They pitched your letter?  Even after you did outbound voice mail to let them know it’s coming?  You’ll get them in the email.  

Didn’t open the email?  We resend those to people who don’t open.

Still didn’t?  We have ads that follow them around the Web.  Then we’ll call; can’t escape just by going offline.

Multichannel is the way to get in the impressions.  Impressions are the way to get a message through.  Message is the way to get the donation.

Spend time where it counts.  Some donors actually want to read a 12-page letter.  But only if it’s written well.  Not Shakespeare well.  Not James Joyce well.  Da Vinci Code well.  Tom Clancy well.  The kind of letter that forces you to read to find out what’s next .

Sign up for my newsletter.  I won’t waste your time.  Promise.

Let’s get small: microseconds

Learning from political fundraising: hypercustomization

fireworks4_amkOn the path to his win in Iowa, Ted Cruz took an unusual position for a presidential candidate. He spoke out against fireworks regulations.

Usually, Iowa contests focus on broad national issues that a person would be expected to lead on as president (plus ethanol).  Fireworks range as a national issue somewhere around garbage collection and why-don’t-they-do-something-about-that-tacky-display-of-Christmas-lights-on-Steve-and-Janice’s-house.

But from a data perspective, the Cruz campaign knew its supporters.  There’s a great article on this here.  Here’s a quote:

“They had divided voters by faction, self-identified ideology, religious belief, personality type—creating 150 different clusters of Iowa caucus-goers—down to sixty Iowa Republicans its statistical models showed as likely to share Cruz’s desire to end a state ban on fireworks sales.

Unlike most of his opponents, Cruz has put a voter-contact specialist in charge of his operation, and it shows in nearly every aspect of the campaign he has run thus far and intends to sustain through a long primary season. Cruz, it should be noted, had no public position on Iowa’s fireworks law until his analysts identified sixty votes that could potentially be swayed because of it.”

As we unpack this, there are several lessons we nonprofits can take from this operation:

The leadership role of direct marketing.  Cruz’s campaign is run by a direct marketing specialist.  Contrast this with Marco Rubio’s campaign, which is run by a general consultant, or Jeb Bush’s, which was run by a communications specialist.  As a result, analytics and polling in the campaign are skewed not toward what generalized messages do best with a focus group or are the least offensive to the most number of people.    

In fact, in the campaign, the analytics team has a broader set of responsibilities than normal.  Analytics drive targeting decisions online and offline.

The imperative to know your constituents.  Much political polling is focused on knowing donors in the aggregate.  The Cruz campaign wanted to know them specifically.  So they gathered not just people who were supporters and asked them about local concerns.  This came up with 77 different ideas, including red-light cameras and, as you probably guessed, fireworks bans.  We’ve talked about knowing your constituents by their deeds and by asking them; what’s important about this example is the specificity of the questions.  It’s not “what do you like or dislike”; it’s “what do you care about.”

Testing to know potential constituents.  One the campaign had these ideas, they tested them online with Facebook ads.  The ads weren’t specific to the Cruz campaign, but rather asked people to sign up for more information about that issue.  Once they had these data, they not only had specific knowledge of what people cared about, but the grist for the mill of data operations that could model Iowa voters and their key issues.  

Focusing on actual goals.  Cruz’s end goal is to drive voters, just like ours is to drive donations.  By simplifying things down to what gets people to pull their levers/hit the button/punch the chad, they had a crystallizing focus.  One can debate whether this is a good thing, as the campaign sent out a controversial Voting Violation mailing that attempted to shame infrequent voters with Cruz leanings to the polls.  (It should be noted that these mailings are the part of campaign lore — they’ve been tested and found to be very efficient, but few campaigns have ever wanted to backlash that comes inevitably from them.)  But that focus on things that matter, rather than vanity metrics like Facebook likes , help with strategy.

Hypertargeting: All of this led to some of the most targeted direct marketing that has been seen in the political world.  When telemarketing was employed for particular voters, not only would the message reflect what they cared about (e.g., fireworks bans) but also why they cared about it (e.g., missed fun at 4th of July versus what seems to some as an arbitrary attack on liberty).  This came from both people’s own survey results and what models indicated would matter to them.

So now, let’s look at this in a nonprofit direct marketing context.  How well do you know your donors and potential donors?  Or how well do you really know them?  And how well do you play that back to them?

I’ve frequently advocated here playing back tactics to donors that we know work for them and focusing our efforts on mission areas and activities we know they will support at a segment level.

But this is a different game altogether.  The ability to project not only what someone will support, but why they well, and designing mail pieces, call scripts, and emails that touch their hearts will be a critical part of what we do.  And once you have this information, it’s cheap to do: if you are sending a mail piece or making a phone call already, it’s simplicity itself to change out key paragraphs that will make the difference in the donation decision.

This also applies in efforts to get donors to transition from one-time giving to monthly giving or mid-major gift programs.

So, how can you, today, get smarter about your donors and show them you are smarter about them?

Learning from political fundraising: hypercustomization

Learning from political fundraising: combined databases

This is a lesson from something the 2008 Obama campaign got wrong online.

I know, it’s blasphemy.  The 2008 Obama campaign was so far ahead on digital fundraising that you could call what we are doing even now eight Internet years later (which is 576 regular years) as evolutions from that model, rather than subsequent revolutions.

I know I got questions from board members at the time as to why we couldn’t deliver the same type of Internet fundraising progress as that campaign.  (These questions dissipated after they learned of the price tag.)

And for perhaps the first time ever, political marketing was ahead of commercial marketing: witness Obama campaign veterans going to work for private industry post-election.  

But there was a massive problem with the back end of the Obama e-juggernaut: multiple different databases.

I’ve railed against this before, arguing that you need one database that is the Truth. Even if there are databases that feed in, some system has to be the one you go to get every record with enough detail on it to be able to work with it for donor relations and basic communications.

The Obama 2012 tech team did an illuminating set of interviews with Time to be released after the 2012 election.  The article is fascinating; here’s a salient excerpt:

Back then [2008], volunteers making phone calls through the Obama website were working off lists that differed from the lists used by callers in the campaign office. Get-out-the-vote lists were never reconciled with fundraising lists. It was like the FBI and the CIA before 9/11: the two camps never shared data. “We analyzed very early that the problem in Democratic politics was you had databases all over the place,” said one of the officials. “None of them talked to each other.”

So over the first 18 months, the campaign started over, creating a single massive system that could merge the information collected from pollsters, fundraisers, field workers and consumer databases as well as social-media and mobile contacts with the main Democratic voter files in the swing states.

This probably sounds familiar, no?  You can feel the resources being wasted.  If a get-out-the-vote canvasser doesn’t have the donor list, you could be asking a maxed-out Obama donor if they plan to vote as if they were a person off the street.  Likewise, a passionate supporter met while doing GOTV may not make it into the mail or online databases.

As we work toward a world of multichannel marketing, it is destructive to have data silos.  Your telemarketers need to be able to get information about mail and online donations (no sense calling the person to renew their membership when you received their check or debited their card yesterday).

Now look at the line in this piece that should send shivers down your spine: “So over the first 18 months, the campaign started over.

That’s a difference between the political world and the nonprofit world: there are lulls in the political world (not many, not for long, and fully compensated for by the frenzy of election years, but they do exist).  For nonprofits, you need to build your new plane while you are flying it.

But that’s no excuse for not having the data structure you want and need firmly in your mind and continuing to drive for it.  I personally have been on a crusade with an organization for almost a decade where we have been killing off databases gradually as we are able to assimilate them.  It’s not stopping everything to recreate the database, but it’s continual forward progress.

So, what can you do to avoid Obama 2008’s horrid fate (he said, tongue firmly in cheek)?  It’s twofold: know where you want to get and move toward it, all while you continue to do your job in the meantime.

One thing I didn’t mention above is you need these data to construct models of donor behavior: figuring out not only who supports you now, but why and who else may be willing to join.  We’ll talk about this more tomorrow looking at the Cruz 2016 Iowa campaign.

Learning from political fundraising: combined databases

Easter eggs in your donor database (guest post)

I have the privilege of sharing a guest post from Angela Struebing, president of CDR Fundraising Group.  For more insights from Angela and the CDR team, you can try their blog here.  Thanks, Angela!

eastereggs

Every year I organize our neighborhood Easter Egg hunt. I stuff and hide over 600 eggs and love watching kids run through the field searching for them. The excitement they feel when finding an egg is the same rush I get when I discover something actionable in a client data file. It got me thinking about some data eggs that are often hidden. For some you have to look a little harder, but the answers are always in the data.

  • When evaluating list performance look past initial response metrics and assess long-term value (LTV) at an individual list level. We often find that lists that look bad upfront may show life when looking at 12-month or 18-month payback periods or retention rates. The same goes for looking at LTV by package. A test that might have had a lower response initially may bring on more loyal donors over the long haul. Make sure you look well beyond just campaign reports for this information.
  • Along the same lines, matchbacks where you look at returns that may be coming in through one channel but driven by another, is another hidden gem in your file. This is especially true for brick and mortar institutions where a recipient gets a mail piece and can respond through the mail, via phone, online, or in the lobby. In order to gauge true list value, you’ll want to look at all response channels and see from where the response was driven. This will also encourage you to make it as easy as possible for donors to give through any channel.
  • This leads us to multi-channel migration and attribution analysis. You’ll want to understand if donors are migrating from online to offline or offline to online. While counterintuitive, we see more people giving an initial gift and then moving to offline giving than vice versa. Knowing this may change your marketing focus. Attribution is critical to making investment decisions and understanding how the various channels are working together.
  • I find lapsed donors particularly interesting and profitable. They have already exhibited an interest in your mission. They can usually be reactivated for less than it costs to find a new donor and are more valuable to an organization (based on number of gifts and average gift). Take the time to test what really works with lapsed segments. Do they perform better in acquisition or to housefile packages or perhaps a tailored lapsed package? All lapsed cohorts aren’t the same with deep and recent lapsed names performing very differently. Should you use a reduced ask, Most Recent Contribution vs. Highest Previous Contribution or generic acquisition string? Do you reference their previous relationship or – if they’ve been absent long enough – treat them as a prospect? How far back can you mail? All of the answers to these questions can be found within your database (and carefully crafted tests).

These are just a few of the things I go looking after when reviewing results and file trends. What hidden gems have you found? Happy Hunting!


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Angela Struebing is president of CDR Fundraising Group, a multichannel agency focused on helping nonprofits maximize their online, direct mail, telemarketing and DRTV fundraising results. As president, Angela is responsible for overall agency management and strategic planning for national nonprofit clients to include Shriners’ Hospitals for Children, MoMA and the Marine Toys for Tots Foundation.

 

Easter eggs in your donor database (guest post)

Welcome step four: Setting up your systems

So you have your plan for your welcome series.  It is somewhere between 1 and n number of communications, depending on the person.  It crosses media where possible.  It thanks, learns, teaches, and asks.  And it honors the gift the person has given, while letting them know they can still be a bigger part of the change they seek to make in the world.

And it is worth nothing unless it is written down.

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You are working with a process that likely has:

  • At least three media (email, mail, phone) and perhaps more (mobile/texting, addressable ads, video, events)
  • Multiple vendors/systems involved (including caging, database, mail house, telemarketers, online communication systems)
  • Multiple points of differentiation, including medium, message, and high-touch v low-touch
  • Multiple people at your organization (you, donor relations staff, executives)
  • Intricate timelines.  For example, if you have three communications that you want in the order of thank you, learning about you/you learning about us, and ask, you really, really don’t want them to happen in the reverse order.  Also, every time you suppress someone from anything, things get complex.

This is not something that can be informal. In order for these systems to work together, you need to write out how.

Which does not mean you should write it in stone.  The basic principles should be (thank as quickly as possible, customize communications to the person receiving them, include both gratitude for what the person has done and opportunity to do more).  But how you accomplish them should be fluid with your testing regime.

I would say that the easiest way to create your process is to start with the simplest case and work your way up.  In this case, we have the rare example where ontogeny recapitulates phylogeny*.  So here’s how to build your program and your welcome/acknowledgment flowchart.

  1. Start with the most basic thank you by medium.  For an online gift, this is an email thank you; for an offline one, it is a mailed thank you.  Figure out how to get it out as soon as possible. 
  2. Customize those communications to the reason for giving.  A simple way to do this is to have a paragraph in the communication that changes based on the appeal to which the person gave their initial gift (since that’s usually the only information you have about the person at this point). 
  3. Create a special high-touch way to reach out to higher-potential-value donors.  This could be a policy of thanking all sustaining donors by phone or thanking all $100+ new donors and $1000+ existing donors with a handwritten card — whatever you are capable of doing.  This should be added to, not in place of, other thank yous. 
  4. Explore ways to break down your acknowledgement silos and thank people in different ways.  Put those that work into your process. 
  5. Add in a customized ask.  Yes, we’ve gotten this far before adding in an ask.  My thought is that a well-thanked donor is more likely to give to a regular-communication-stream ask than a poorly thanked one is to give to a specialized communication.  Also, you’ll note that this comes before creating a gap in communications (there likely already is one  that you can take advantage of) or learning about/educating your donor (I would rather have a less-educated donor who makes a second gift than a more-educated one who hasn’t).  This ask will be a bit more generic than we would like at this point, but you crawl before you walk. 
  6. Create your communication(s) to learn about your constituents.  These will usually be, but don’t necessarily have to be, separate communications from your acknowledgement and/or ask. 
  7. Create your if/then tree for customization from these learning communications.  That is, you should have something that says “if they are interested in advocacy, send them X paragraph in the ask; if they are interested in conservation, send them Y; if we don’t know, send them Z.” 
  8. Create the systems by which these changes will be implemented both for the ask as part of the welcome series and for all future communications. 
  9. Add communications from other media to the mix. 
  10. Create your timing for all of these communications, expressed in number of dates from the receipt of the gift.  I would encourage you to do a range, rather than an exact date for these communications — you may want to avoid having people telemarketed to on Christmas or on Sundays, for example.

Then, test the everlovin’ crud out of the system.  You are looking to break your system and then make it stronger at the broken places.  Some common things to test:

  • Do you have a plan, and only one plan, for every giving amount?  I’ve seen plans that say that donors over $100 get this communication and donors under $100 get this other communication.  They forget that a computer is going to be looking at this and ignoring people who give exactly $100. 
  • Do you have a plan for defaults?  Remember in most cases, you are not going to have additional information from the donor when you make your welcome series ask.  You want to make sure there isn’t a big blank space where paragraph three should be. 
  • What happens to your system if someone miskeys a code? 
  • What does your flowchart look like if someone does everything?  That is, you have paragraphs for people who are interested in various particular diseases, want to do advocacy, or have a personal connection to the mission.  What if they are all three, and they are a high-dollar donor?  The goal here would be to make sure you have prioritization and that you are not inundated with communications.  Remember that one of the priorities with your welcome series is to help the donor understand what to expect from you.  This should not be “I will expect to be annoyed.” 
  • How do your dates line up?  If you are integrating multiple messages and channels, you want to make sure that a person doesn’t get a phone call, mail piece, and email all exactly 21 days after their gift. 
  • How are you going to be able to handle the load?  That is, if you are going to be sending a getting to know you email seven days after the gift, will you be able to handle that on January 7th given your December 31st volume?  What?  You don’t have huge December 31st volume?  Let’s do a week on year-end fundraising at some point.

And you want to be vigilant to potential leaks even when you have this written down.  I have the privilege of working with a great donor relations person who keeps me apprised of the tone, tenor, and quantity of calls we get.  From this, she was able to discern that we were getting people calling (from a pattern of three people — like I said, she’s good) that already existing donors were getting member cards, something we include in our getting-to-know-you section of our welcome series.

What had happened was that our caging vendor had had instructions to send the new donor welcome letter to people who came in from acquisition mailings.  Since acquisition mailings often have lapsed donors in them that you are looking to reacquire, there were people who had donated for over 20 years who were being treated as if they were brand new to the organization.

Sovigilance

Image credit.

I will say that I have entirely failed to set up a welcome series for the weekly newsletter companion to this blog.  If you were to sign up for the newsletter here, what would you like to see?  Email me at nick@directtodonor.com; I’d love to use this as a test case.


* “Ontogeny recapitulates phylogeny” is the (mistaken) idea that we go through all of the stages of our biological evolution in development of our embryos.  The catchiest treatment of this I’ve seen is in Stephen Jay Gould’s I Have Landed, where he talks about how the drawings that supposedly prove this theory (like the allegation that we have gill slits at a point in the womb) persist in science textbooks.  It’s also the theme of his first book, which is a technical book and thus one I haven’t read.  In any case, I doubt his first book has any essays on Gilbert and Sullivan, which I Have Landed does, so that’s another point for the latter work.

Welcome step four: Setting up your systems