Growing in a new economy

The starting point of many conversations over the past few weeks has been: how has the recession affected your revenue growth. Our clients are experiencing the tension of tightened budgets.

We're concerned. The rapid rise and then plummet of the Canadian dollar significantly impacts corporations and organizations that trade in US dollars. For some the low dollar is advantageous; for others it plays havoc with the bottom line. The overall consumer caution is causing concern. The chaos of the markets have decreased available investment funds.

A flurry of writing from fund raising professionals indicates the breadth of the impact. While some of our clients have experienced a gap between budgeted revenue and actual revenue, most of them have increased in overall revenue from year to year. Some have fell short of particularly aggressive budgets, but gained 10 - 15% over 2007.

Non-profits dependent on government and foundation donations will very likely experience declines in their annual revenue. Small non-profits that lack a diversified donor base and are dependent on a few major revenue sources will also struggle. But organizations true to their mission, with strong relationships to a diverse group of donors and supporters should experience consistent giving and may even experience some rise in their giving. Faith-based non-profits may also experience a rise in giving, especially if they emphasize their core mission.

In my research and from client experience, I have put together 7 foundational principals that will help you weather the storm:

1. Make investment oriented business decisions. I know, that sounds simplistic. But let me explain. Cut out overhead costs that do not add growth to your business. Retain budget lines to acquire new donors and serve loyal donors. Negotiate better terms and invest less for greater impact. With tightened marketing budgets, the climate is warm for negotiation.

2. Build relationships with your donors. Increase your donor engagement and service opportunities -- make it easy for your donors to choose you over other agencies. In downturns, the market is incredibly competitive -- it`s a buyer`s market and the service they receive will impact their long term purchasing and giving decisions.

3. Innovate and diversify. Organizations dependent on one form of marketing or fund raising are in a precarious situation. While integration and diversification increases costs -- it also increases revenue. Look for creative ways to tell your story. Don`t produce a newsletter because all of your competitors produce a newsletter. Listen to your agency. They see the numbers of other clients. While the numbers are proprietary -- the agency can identify trends and increase your effectiveness by applying those trends to your marketing strategies.

4. Track results. Use your data. If you are not tracking well -- put the pieces in place to track. Your data tells the truth. Phone calls from customers and donors do not -- they tell a tiny fraction of the story. Compare anecdotal comments to actual results to make decisions. When planning new campaigns and media buys, data is essential to make wise buying decisions. Use web analytics to understand how people are using your web site. It will give you a lot of insight to use for other marketing ventures.

5. Concentrate on Net Income and not ROI.
Our data intelligence allows us to segment tightly -- but be very, very careful. While higher response rates increase overall return on investment, it will also decrease overall net revenue. Focus on raising money. To help get your mind around this, consider two "a-thon" events. In 2006 an organization spent $300,000 and raised $1.2 million -- with a 4 to 1 return on investment and $900,000 towards their cause. In 2007 they spent $1,000,000 and raised $3,000,000 -- the 3 to 1 return on investment did not meet the traditional 80/20 -- but the organization contributed $2.1 million to the cause -- $1.2 more than the year before. While the return on investment was less, the monies contributed to program were far greater.


6. Do not stop acquisition efforts.
Acquisition is costly. Not investing into acquisition is much more costly. The effect of the lack of acquiring new donors will continue for many years, multiplying the effect of the loss of income.

7. Streamline messaging, emphasizing your core mission. Now is the time to get back to basics. Make sure your donors and supporters fully understand your core mission and inspire them to join you in fulfilling it. Focus on high profile projects and goals, giving donors a clear understanding of your work.

I wish you a very Merry Christmas... rest well so that you will be ready to prepare strategies and tactics that will help grow your organization in the New Year.

Integration... an art?

We hear a lot about integrated tactics -- which simply means that when we are presenting our company or organization to our audience we all are singing from the same song book.

We call that song book a Brand Document.

Let's start with fundamentals. Whether you are a non-profit with the goal of raising awareness and funds or a for-profit selling a product or service -- the offer and the ultimate sale are #1. Revenue and profit margins (Return on Investment) is our growth goal. We all understand that.

The question bandied about is the importance of brand integration in overall revenue growth. We've all witnessed the poo-pooing of brand, especially in today's economic climate. It's only a recent move for agencies to even associate brand and direct response (however baffling that may seem to me).

At Barefoot Creative we constantly see results affirming that brand and fundraising or sales strategies work in synergy to increase revenue.

Especially in times of economic depression.

The growth of Kellogg's is an important case study on the potential when we invest wisely. Even in the early 1900's, W.K. Kellogg believed in brand advertising and invested heavily. During the depression, as consumer spending plummeted, Kellogg's directors voted to cut all advertising dollars. A seemingly sound judgement considering the sales environment.

Catching wind of the decision, Kellogg rushed back to head office. New meeting, new insight. The company invested $1 million in advertising. The growth curve increased sharply over the depression years, increasing company sales by more than 27% during the 20th century's lowest economic period.

But more importantly. As consumer dollars were freed up, Kellogg's was there, a well-known, appreciated consumer choice.

Back to integration....

When your foundational brand message does not echo through every piece of marketing, communication, fundraising and sales collateral you lose momentum.

W.K. Kellogg, more than 100 years ago, recognized that advertising and promotion set you apart in a world of many like products. Let's be honest. While each of us has a unique contribution to make in our world, we are not alone in that uniqueness (an irony which I appreciate. After all, mass marketing is an intriguing study on the similitude of the unique). BRAND sets us apart because it is the unique edge we have. Whether we protect children from abuse, sell homes, provide educational services, distribute software -- there are companies that do very similar work or provide similar services. Critical to your success is the development of a unique personality that captures the attention of your audience.

Once the brand personality is established, the hard work begins.

Every campaign, every marketing piece, every communication needs to echo that personality -- everything. While packages and templates designed for someone else will work in the short term, they will not build long term organizational growth.

Today's marketing challenge is complex. With each new communication innovation: print, radio, TV, outdoor, guerrilla, web-based (quick sweep -- you get the picture) we are required to integrate more. Radio did not do away with print, nor did TV high jack radio... Internet marketing has not reduced the need for print, radio or tv. But each innovation in communication has increased message clutter, increasing the importance of brand.

The foundation of integration is brand. The foundation of increased revenue over the long haul is integrating a strong brand message with tested direct response activities that lead your customers or donors to complete the transaction.

Is integration an art?

I think so. True growth oriented marketing, communication, sales and fundraising activities are based on foundations applied by talented creators.

Permeate...

Who has the responsibility to promote your brand?

The answer is easy.....

Brand must permeate all aspects of the organization, re-affirming the core personality.

The implementation is much more difficult.

Let`s take the classic conflicts. Sales and marketing (not-for-profits call it fundraising and communications). Sales has one goal... to sell the product or service. The sales team doesn`t really care if the brand presence is there, they just want to have a quick and easy entry point to sell. Marketing builds a case for support, brand messages and images that define the personality of the company, product or organizations.

Add customer/donor service and your brand message may be squashed in a phone call.

A couple of years ago I responded to a post card from a local credit union. It was just starting up and the brand message was clear: "We're here for the little guy." On a lark, I gathered my most recent financials and popped around to visit the manager of the branch located just around the corner.

He smiled nicely at me and looked at my financials --which were decent, but small -- and said: "Our marketing company came up with the slogan. We really aren't interested in companies as small as you."

HELLO!

Truly, he actually said that.

The trust factor scurried down to nothing. I have little doubt that the "brand" message drew blood, sweat and tears from the marketing team. But they really should have got their sales team and customer service guys in on it. At the very least, given them some key messages to shuffle away unworthy customers like us and our couple of million dollar business.

Building a brand promise on a hope and dream is not a good idea. Your product must live up to the brand promise.

In non-profit organizations there is a tug-a-war between brand and fundraising. That's why I still see a label package that looks like the other organization's label package. You see -- the label package like the other organization does works. Interestingly, it works when I put my logo on as well. That is called Direct Response theory.

BUT if I am going to grow my organization I need to grow beyond simple DR tactics and take it into brand direct -- that means I integrate the foundation of my brand promise right into my direct response mail.

We work with a TV personality that has a significant draw. We work hard at building the Direct Mail we produce for them. Each piece is integrated with this person's innate brand -- his personality. We don't offer a package that we tweak -- we offer a long term strategy for increased overall growth.

The impact?

They have grown over 30% in 12 months. The change in focus from "proven" direct response to strategic brand-direct has increased their overall income tremendously. PLUS it has converted many of the one-time supporters to monthly. A huge income boost.

Your sales or fundraising tactics must fit into an overall strategic plan.

Do one-offs work?

No question. One of my clients purchased a proven package guaranteeing them 3% response in acquisition. The story was not theirs, the offer was really not one they made and the brand was no where near their actual brand. But they did recieve 3% response from the Direct Mail package. However, the retention rate was almost 0. Did it work?

You tell me.

What colour are you?

Personality tests amuse me. Just for fun, go to http://www.cs.ucr.edu/~chua/test/test.html. Discover the real you!

It's amazing, eh? Just from one click I can be totally analyzed! Imagine that.

Just like your uniqueness is based on your personality, brand is the essence of your corporate or organizational personality.

When we were outfitting our office, the office design consultant suggested a sleek, steel look. We were confused.

Barefoot -- on steel?

Not really reflective of our overall brand identity. (I'm trying to convince Larry we should install a sandbox in the reception area...)

Brand is the overarching personality of the company. When you are building brand, remember:

Brand is not an icon, a colour, a font type or a product. It is the underlying personality expressed by various communication components.

Start with the overarching brand statement. Who are you? What do you look like? What colours represent your brand the best? If you are using images or photos in communication and marketing pieces, what kind of photos are you using? What is the mood of the photo?

UNICEF has a great brand. The brand colours are primary - reflective of their overall mission: unite for children. Their photos focus on children with dignity, opportunity and honesty. Perfect to capture the overall brand of an organization. They have a unique UNICEF lexicon that defines their communication materials.

Think about the difference between Please Mum and Baby Gap. Both retail outlets show their personality in the complete communication package: name, logo, store front, products, advertising and communication pieces. Please Mum is about active, growing babies in jeans, t-shirts and running shoes. It's about the basic functionality of the clothing. Baby Gap, on the other hand, is about babies made for the designer world -- a cut above perhaps. Moms at Please Mum wear running shoes and t-shirts, their babies are dressed similarly. Moms at Baby Gap wear designer shoes and labels; their babies wear designer shoes and labels.

Both retailers sell baby clothes -- but they have built their brand personality around their unique selling points.

As you are going through the process of brand, consider outsourcing the discovery process. A consultant or agency specializing in brand can often articulate your core brand personality more effectively than the internal team. They are not as embedded into the business model or organizational/corporate services.

Remember, brand is not your business plan -- it's your core personality. It's who you are: the make-up, the clothes, the language, the friends, the photos. When you're working on brand, play a little. Imagine creating your face book -- what would you post? Who would you invite? What would you write?

Great personalities attract others -- it applies to the business world as well.

I'm Special

Grade 1 teachers are already preparing our kids for understanding brand. They call it "Special Me."

Eric, a little friend of mine who is in grade 1, is "Special Me" on September 29th. He's already collecting stuff. He's trying to figure out the special part because there's lots of stuff that he has that other kids have already show cased: a little brother, a mom, a dad, a Toronto Maple Leafs jersey, lego, a signed picture of Rob Ducey and a snail he found on the side walk after the big rain.

Matt brought his baby brother -- he was squirmy and cried a lot. Eric's brother can walk AND talk, so he's a little cooler. Eric's mom and dad are pretty different than Josh's, at least Eric thinks his dad is pretty cool in his baseball uniform. He's not sure about the Jersey. The Leafs haven't negogiated the Stanley cup for a long time -- at least, that's what his dad says. Natalie brought lego -- but it girl's lego and Eric figures the alien force captivator he constructed last week is way cooler. He's not sure who Rob Ducey is. He's old now, but his grandpa told him he was pretty good. Jesse brought a snail, but accidently stepped on it so the shell was broken. Ethan brought his Fischer Price smart cycle -- Eric just has the Wii.

I'm not sure what Eric will bring when the fateful day arrives -- but he's already figured part of it out. Even though he has some things that are the same as other kids, each part of his collection is unique because it reflects the core of who he is.

Brand is built on the uniqueness of the organization and works to differentiate organizations in a crowded marketplace.

Many organizations look similar from the outside. Coke and Pepsi are a brown, carbonated sugared (or non-sugared) liquid. Not at all sexy. In 1906 Pepsi used Original Pure Food Drink against Coke's The great national temperance beverage. In 1928 Pepsi pushed the competition with Peps You Up! against Coke's Coca-Cola ... pure drink of natural flavors.In 1939, fighting for the tight depression dollar, Pepsi claimed Twice as Much for a Nickel while Coke emphasized its friendship with the consumer with Coca-Cola goes along.

The battle continues with Pepsi insisting on being the "cola" of choice luring pepsi fans with "stuff" and Coke unifying Coke drinkers with iCoke reward points.

Same product (forgive me Pepsi and Coke drinkers -- I truly understand the discerning taste buds). Same target audience. Same brand?

Not in the least.

Eric is 6 years old. He has a little brother, a mom and dad, a house and a wii. Pretty ordinary little guy. But his brother's name is Colin and his mom works in an advertising agency and his dad plays second base and sells houses. His house is on the corner and he has the high score Super Mario Galaxy.

There are 16 little boys in Eric's class -- and none of them are just like him.

Oh yeah -- he didn't step on the snail, so the shell's intact.

Where does Brand fit?

Hard to believe that we are treading on the last days of August... campfires burning low and the echo of blackberry email notifications swirling us between vacation and reality.
Time to focus on our strategy, executing well in the September to December period is often the strength of revenue growth.
So let's talk a bit about brand.
We all know the strength of a brand -- Coke, Mazda,Wallmart... and the list goes on... Brand engages customers.
But where does brand fit in the non-profit world?
Without a question, brand differentiates non-profits.
But how does it work?
Here are 4 foundational insights:
1.Brand is built on the uniqueness of the organization and works to differentiate organizations in a crowded marketplace.
2. Brand is not an icon, a colour, a font type or a product. It is the underlying personality expressed by various communication components.
3. Brand must permeate all aspects of the organization, re-affirming the core personality.
4. Brand and fundraising strategies work in synergy to increase revenue.
Stay tuned.... I'm going to engage with each of these four points over the next couple of weeks... if you have some insights -- don't be shy. There is a lot of chatter about brand, effectiveness and fundraising.

OOPS!

Here's 4 mistakes you don't want to make:
1. Basing your marketing message on your mission.
If the first message people see on your web site is you mission, as written for your board, you might want to revisit that. Your donors want to help you execute your mission. Tell them exciting stories and needs that will actually impact change. If it's saving the Banff Springs Snail in Alberta or building a shelter for women in St. John's -- your supporters are keenly interested in doing.
2. No instructions on how to get involved.
Some call it the "call to action" others call it the "offer." What is means is that after they have read a compelling reason for your work they will also clearly understand what you want them to do. CLEARLY. Whether it's write a petition, go on a trip, volunteer, give money, tell your neighbour, call -- in clear and succinct words tell them exactly what to do. (some fund raisers have discovered a lift in response by adding: "Tear here" to the perforated return device.)
3. Multiple messages. It is not more cost effective to tell your donors everything in one encounter. That's like a date where you talk without a breath about you. Identify your key messages and stick to them. It's a business model. Promote your core business. It will bring growth. Building your campaign so that there will be "something for everyone" will build confusion.
4. Budget. Growing your support base and cultivating long term relationships is not happenstance. It requires a budget, good planning and the consistent execution of a plan. In some situations, we are able to increase the overall revenue of an organization by simply establishing a strong case for support and a regular fund raising calendar. Rocket Science? No... but few of us are going to the moon.
(Thanks to Stacy Jones for her excellent article in The Philanthropy Journal.)

Thesis Statements Rule

In my undergraduate years, I was keenly interested in the approval of my profs. While writing came pretty naturally to me, I was a story teller, not an essay writer. The idea of giving away my whole idea up front was startlingly adverse for a novel writer.
I got over it.
Then I received my first 300 Composition 101 essays! I was transformed. 299 of the essays were nearly indecipherable. The writers had given me no clues as to where they were going. The essays were either idea-less or had so many ideas jammed into them that I couldn't make sense of them. Very few had identified their "thesis."
And then I understood the importance of the thesis statement.
Ad writing, marketing and fund raising is no different. The offer is the thesis statement. The copy writer should never start writing a letter without a clear and succinct offer. Starting with the response form or devise is a great idea. The designer should not begin to design or lay out the piece without clearly understanding what the offer is.
All of the information, writing, content, design -- everything -- hinges on the offer.
We slide past this too often. We assume we know where we're going. Then, half way there, we take out the map and refocus on our goal. Getting lost in mid-stream is a waste of valuable time.
The second thing I learned in Composition 101 is that words should be chosen for the audience. Even as I write it, it seems like such a simplistic point. But all of my clients get hung up on this. Using words that have an affinity to the corporate structure or internal language builds barriers for the donor/customer.
We were chatting around the pool one fine summer morning. Our guest was a young man from Japan who spoke impeccable English. He had learned this impeccable English at school. He could only grasp about half of what I said. I was stunned to realize how much I spoke in metaphors and allusions that were Canadian specific (or at least North American). My colloquial speech had not been covered in his English classes.
Our clients, donors and customers don't live in our corporate structures or contexts. We need to speak to them in language they understand.

Renaissance and the price of gas...

"Canada is undergoing a renaissance in giving: big gifts are getting bigger while new sources of funding are emerging across the demographic spectrum with everyone from new Canadians to kids choosing to give. At the same time, competition for donor dollars among worthy charities is rising, putting an increasing onus on how organizations engage donors and demonstrate value." Globe and Mail, June 26, 2008


I just paid $51.00 to fill up my Toyota Corolla....

Will the changing economic times impact non-profit dollars?

Without a question expenses are going up. Postal rates, delivery charges, travel and overall cost of operation area all rising. This makes it difficult for non-profit organizations to maintain appropriate cost/program ratios.

Dr. Keith Seel from the Institute for Non Profit Studies at Mount Royal College says that changes to the traditional model of funding is just starting to change in Canada. The traditional model being the "400-year old philanthropic culture that put the responsibility of charitable spending on the shoulders of the wealthy merchant class."

Interesting.... but perhaps I'm jaded. The most successful organizations I work with have a healthy balance between the the "wealthy merchant class" (generally called "major gift donors") and the ordinary Canadian. Organizations built of the faithful monthly gifts of individuals have a strong foundation. $35 every month from 35,000 people makes a big impact.

Public charities can learn a lot from the faith community who has a built in penchant for the "tithe." That setting aside of financial aid for those who need it is a revolutionary idea -- and it illustrates the impact of effectiveness when many people join together to accomplish good.

As the economy changes non-profits will have to be more creative, use more innovative acquisition methods and be centred on the return on investment. I believe that generosity is a part of the human psyche and well-positioned charities will continue to grow.

No Emotion?

I just received this from a friend who is the director of a small non-profit...

"Raising money for a cause that allows you to use a starving child as the subject that draws on the emotional strings is cool, but what about us who are trying to raise money for a boring old cement and mortar building? A picture of the building wont draw to much emotion, right? I know i am being a bit cynical but reading your blog and the comments it seems to make sense that we need to find the emotional connection in any fund raiser?"

Without a question.... the starving child (or dog), the earth shattering tremors, the devastating flood waters all create the momentum for donations..... BUT let's be honest -- our goal as fund raisers is to raise funds to support the mission and vision of a specific organization. And our mission and vision may not be relief and development.

In some ways, your question is ironic. As I often have people come to me and tell me that it's so easy to raise money for bricks and mortar and so difficult to raise funds for the operating costs of the organization.

But let me start this dialogue with 2 comments:

1. Raising funds does require "emotion," but I would prefer to use the words vision and passion instead of emotion. In many of the web sites and promotional materials I receive, I see people make a very common mistake -- they completely omit the vision and the passion. What is the underlying passion that inspired you? I'm guessing that at the very core of your vision are the lives of men and women; young people and children whose lives will be transformed by the work you do. That's the emotion. The bricks and mortar are simply the frame within your building. To talk only of the program or the buildings is like analyzing a great painting and only talking about the frame.

2. You need to understand your audience. Organizations like universities, colleges, hospitals and schools have two audiences: the funders and the students. Each have different motivations for coming alongside you. As a fundraiser and/or recruiter, you need to understand the needs, motivations and rational for each of the audiences. Then you need to talk to them. There are a couple of dangers. The first is to completely separate the two. This results in a fragmented mission and vision. The second is to try to "sell" the same product to both of them -- this is dissonant to both groups. In small organizations(let's randomly use the figure under $1 million annual operating budget), the organization has to clearly identify the audience and, as much as possible, speak directly to them. The mission and vision should resonate at the core of every communication.

The growth of an organization is a complex thing. It's a bit organic. A good communicator understands that and is able to position the messages in a way that resonates with the audience. The starving child is not the only image that raises emotions.

Growing Old

What you are doing to attract a new generation?

Hmmmm...who is this "new generation"? For some of our clients, that means opening the door to 60 year olds, for others, it means attracting those in their 30's.

I am the generation that fund raisers talk about all the time -- the baby boomers. They are holding the greatest wealth in the history of North America in their narcissistic little fists. The boomers lived on the cusp of a changing world -- maybe even were catalysts for that change. They watched TV (but didn't invent it); they wore mini skirts -- then traded them in for bell bottoms; they rejected Elvis and embraced the Beatles; they picketed for free love, anti-war and marijuana; they are the generation that talked democracy and community but lived for the "I".

The question fund raisers are asking is: "How do we talk to the baby boomers?

It's a tough question.

The boomers are cynical, tough minded bunch. Yet they are compassionate and want to use flower cards left over from Woodstock days. But unlike the older generation, they are not content to do what you say -- they want to impact change. That means they want to actually have hands on experiences through philanthropic experiences. They will also gravitate to slightly more grass root organizations which they feel are more open to influence.

But these trends are tricky.

We know that boomers want more hands on experience -- but we also have learned that regular "information' (Updates and loyalty mailings) through print does not actually impact increased loyalty to a charity. New projects, excitement because of new growth and new opportunities for growth do build loyalty (like fund offers). They want to be associated with a charity on the move.

We also know that boomers like to use technology. Yet when we assess the increase in web donations, we're not seeing the spike we have hoped for. We see a decrease in giving if the donor only receives e-updates or offers (with the exception of emergencies).

So in the world of competing offers -- how do we build loyalty?

the web game

Thanks for nudging me, Phil. It's hard to believe that nearly two months have gone by since the last posting. Perhaps there is a blog topic right in there. But I'm going to leave that for another day.

Just a quick reminder that the Canadian Marketing Association's National Convention is happening in May (12,13,14). For a direct link to Barefoot's seminar go to http://www.the-cma.org/convention/?WCE=C=47|K=228049#GayleGoossen

We're focusing our session on one of the most challenging aspect of marketing and fund raising -- developing a web site that is more than a digital brochure. True engagement is pretty obvious for sites like Amazon and e-Bay. But how do we truly engage our donors to come back and visit our site?

Web sites are an ideal environment to allow donors to "create their own adventure." But too often there is no real adventure -- no experience. I am continuously challenged to think of new ways of looking at digital technology.

If I buy the Enchanted DVD I can watch the movie -- but more than that, I can take digital forays into the magical world of princesses. Disney, synonymous with imagination, gets it. The DVD creates an extended experience that engages the audience in more ways than one.

What keeps fund raisers from creating an adventure for our donors?

Let me suggest a few things:
1. dollars.... it takes time, testing and tenacity
2. skepticism... will it raise funds
3. creativity... let's not beat around the bush... fund raisers are not known for their creativity.
4. experience... there are very few (are there any?) models we can learn from

As I prepare for this seminar, I am opening my mind once more to ideas... I'm not expecting a huge break through, but I know that it all starts with one step forward.

30,000 children die each day...

So how effective is that stat?

You've seen the technique used many times -- gripping picture with a list of stats that amplify the need. Or does it?

Here's what researchers found.

Donors were shown a photo of Rokia, a 7 year-old girl from Mali who was facing starvation. A second group of donors were shown the same image, given the same information plus they were given significant stats that demonstrated the famine and starvation in Africa.

Seasoned fund raisers aren't that surprised that Rokia -- without the stats -- raised more money.

George Loewenstein, at Carnegie Mellon University says: “It really puts fund raisers in a fix. They want to appeal to the mind and the heart. But if they do, there’s a real risk of undermining the heart.”

We all face the tension. In the ideal world, it makes sense to educate while we raise funds. But, in my experience, multiple messages and the desire to educate always diffuses the real need.

Take the opportunity to educate in loyalty materials -- materials that are not focused on raising funds. Coordinating loyalty and corporate communications to supplement fund raising efforts is much more effective than trying to do both at once. (Thanks to the Stanford Social Innovation Review for providing leading edge research!)

youtube and facebook

social media
changing faces of technology
grassroots efforts
How are these things impacting our marketing and communication schedules?
Can we track increases in funds raised?
I'd love to hear your stories!

funding deficit

This was a headline in the New York Times today:
"Facing a $200 million operating deficit, the American Red Cross is preparing to cut as much as one-third of its headquarters staff, up to 1,000 employees, and pare regional management."
To get this in perspective, they raise about $3.45 billion annually -- most of us are out of their league. But before we push the thought out of our mind,I think we'd do well to consider a couple of issues.
Between 911 and Katrina, the Red Cross had some pretty good years. Raising funds for high profile emergencies is much different than the hard, systematic work of cultivating long term donors. Our studies show that emergency donors are a unique breed. They are not interested in being committed to one organization. Rather, they respond to highly profiled need when it happens. They rarely transform to long term donors. Your loyal supporters will also respond at an increased level to emergencies that are perceived to be gi-normous (to quote my daughter). Your fiscal planning must take into account the highs of emergency situations.
In response to increases, Red Cross increased their staff -- not necessarily their effectiveness.
Watch your numbers. Return on investment and prudent, strategic acquisition and cultivation cannot be underestimated.
I know, spread sheets are really sexy. They don't make headlines like "$1 million gift given to..." Cultivating monthly donors is not that sexy either. Charity Village never features Mrs. Smith who has given $35 a month to one organization for 50 years (That's $21,000). The organization that has 50,000 Mrs. Smiths is raising more than $21 million each year!
While we need to ensure that our organizations are equipped to respond quickly to emergencies -- we also need to respond with integrity. Doctors without Borders stopped their fund raising for the Tsunami when they hit their response capacity -- good for them! BUT they didn't stop fund raising. Instead, they stuck to their central mission and helped the general public understand that the Tsunami was certainly high need -- but it was one of many humanitarian disasters in the world.
The fund raiser's job is to effectively tell the stories of the organization's real work and inspire people to respond. We need to be innovative, engaged and focused on effectiveness.

too personal?

OK... I admit, the last post was a little cheeky...
(For those of you who know my husband, Gareth, that line was dedicated to him!)
Chris, your questions are great.. and each of us grapples with creating communication that appeals to those who support and partner with us.
At risk of being reductive, let me throw out some general guidelines for personalization and managing your data. Remember, these are generalizations -- effectiveness in marketing comes from understanding the foundational marketing principles and then using them creatively. The sage marketer blatantly borrows from others.
So here's some principles to remember:
1. If your data base consists of 10,000 names or less, segmentation will not give you the lift that warrants the cost. WARNING: don't confuse segmentation with personalization. Personalization will lift results.
2. Mail deep. About 3-5 years ago the wisdom of marketing encouraged lapsing donors at 18 months to avoid waste in mailing. While segmenting lapsed and dormant and treating them differently is a good practise, if you are small charity, be very careful about lapsing early. Our experience teaches us that donors often are still committed to organizations even if they only give once every two years. We encourage organizations to mail deep on a regular basis -- we would consider mailing to everyone who has given in the past 5 years at least 4 times a year. WARNING: mailing deep will reduce your percent response. But it will also increase your overall revenue and reduce your dormant file -- we think mailing deep is worth it -- especially if you are a young or small charity. Larger charities will benefit by smart segmentation.
3. Interests of your donor are directly proportional to their response. We often hear charities struggle to understand where their donor's interests lie. But it's not all that complicated. The answer is in your data base. Donors are most interested in the appeals they respond to. WARNING: focus groups are interesting. But take care in analyzing the results and comparing them to actual response. People regularly say they do things that they don't (like buy environmentally friendly products even if they cost more). Every focus group we have been a part of has told us that they would give more if they were mailed less. Yet every organization that we have worked with has raised more by mailing more.... go figure.
4. Software is only as good as the person using it. There is a great gap in understanding what a data base can do... and I'm not going to get into it here because it's complex. But let me say this. Ask other organizations what they use and how they like it. Train your team and if your staff changes, train the new staff. Be wary of automated programs that "do it all for you." This is fodder for another blog, but data is the horrific monster haunting almost everyone we know. The potential for information through data is infinite -- actually understanding, accessing and executing effective campaigns with this data???? A rare and exciting event. WARNING: it's old, tedious and over stated but here goes.... "garbage in, garbage out."
5. Get help. While this seems self serving, let me say it anyways... consultants and agencies can help you. I have been on both sides of the fence and they both have their advantages. So let me try to teeter on the fence a bit. Consultants and agencies that understand you, partner with you, listen to you, have a heart for your work bring a more objective perspective and are not burdened by your organizational structures. Sometimes the agency can see things that you have buried. Agencies and consultants also have the privilege of seeing many different organizations' work and spread sheets. That gives markers that organizations cannot access. While we are careful to protect the privacy of our clients, we build our strategies from multiple experiences.
OK -- I'm going to take a breath -- because this is really getting too long to read in a gulp... but there's lots to talk about!

my butt

Fitting after the holiday diet of whipping cream, chocolate and butter?
Let me explain...
I just received my very own personalized calendar.Frankly, one of the best pieces of personalization I have yet to see. Each calendar page featured me -- well, my name in one form or another. The one I like best is a 20-some year old firm cheek with my name tattooed on it.
But (no pun intended)...
The personalization was driven by mechanics.
First of all, the personalized letter told me "It was a pleasure meeting you..." at an event I never attended. Seeing as I have no recollection of this company (although that just may be an oversight), I certainly never met Felix.
Secondly, they spoke to me as if I was a company -- not an agency. Which immediately tells me they don't actually know who I am.
Thirdly, the creative was driven by male minds... hockey sweaters, Harleys, fast cars and, yes, butt cheeks.
Finally, while the calendar included is clever and the personalizing interesting -- all they did was insert my first or last name on every page. Because they don't know if I am male or female, they tried to make the calendar a little generic, although the bias is certainly for the female mind... few 50 some females are actually interested in their name being tattooed on a twenty year old model's butt.
Here's what I think.
Slapping random "personal" names on paper, on the telephone or in other marketing efforts is pretty easy. We can get lists from many different sources. But actually understanding our donors or customers is a whole different game. Tracking their activity with us and using that activity for increased sales or donations... that is true personalization.
Amazon probably is one of the leaders in personalization. They also have access to a lot of information about us -- what we read, what kind of gifts we buy, where our relatives live, what kind of gifts and books we dream of but resist buying. They can tempt us with further sales by sending us a text or email that gives us what we want -- sales on the items that we have already looked at. A to-be father I know tested the theory on purchasing baby items. Over a two week period he went to Amazon and looked at the stuff he wanted to but for his baby. He went back every two or three days to check out the stuff. Within 2 weeks the prices had dropped on all the items by 15 - 20%.
Amazon knew what he was looking for and pushed him over the edge by giving him sale prices.
So how do we apply that to fundraising (or any sales activity)?
Your data base is the key.
First of all, you need to know how you want to use personalization. Then you need to equip your data base to collect the information you need making it easily accessible for communication pieces.
This is more difficult than you might think. Few of us are integrated. How much does your direct mail data base know about your donor's activities on the web site or their giving pattern through telephone and web? How much of your CRM activities do you capture in a usable form so that you can write them smart letters?
Just ensuring that their addresses are current is a significant challenge for many of us.
I slap my own hand when a promotion we sent out recently was delivered to my personal address -- except that I hadn't lived there for a year. How simple is it to keep addresses up to date? (That was rhetorical).
Secondly, plan.
If you have not anticipated wise use of personalization the execution will be a nightmare. I can't tell you how many times I have been told that "we have the data, we will just have to dig for it." Translated: "Yeah, the information is buried in the data, but no one knows how to get it. You can try, but it's not going to be pretty."
I still think it's worth trying.
We worked with a client this fall on a highly personalized piece. The information was buried and we had some trouble accessing it. All went well -- except for about 200 records that were misaligned because of the amount of play that had to be done with the lists and data. In the end it worked out really well -- we phoned all the people who received a mis-mailing and the overall results of the campaign where a quadrupled revenue directly attributed to that mailing. Definitely worth the trouble -- and next year it will go much better.
Finally, train administrative staff to think creatively.
Too often the people administrating the data have not been fully integrated into the vision of the organization and the role data plays in overall growth. That's short sighted of the marketing team. The data engineers are your friends -- nurture that friendship. When they catch the full vision of your goals, you'll have to reign them in!
So the personalized calendar with the butt cheek?
It's going to Gareth (my husband)....