418 emails – a study

It’s helpful to look at the big email picture from time to time — across a span of time and an entire segment of our nonprofit industry — to gain a perspective of what’s working, and what standard behavior looks like.

Way back in 2010, Amergent made gifts to 33 cancer centers around the United States, using a newly invented email address. We made online gifts of $25, and sent $20 checks in the same donor’s name. We documented the donor experience, and since then, we’ve been tracking what each of these institutions have sent us, both online and in the mail.

It’s time to look at the first ten months of 2014, and report on what we’ve found, and what we like. An update report in January will provide a view of year-end 2014 e-communications, which we hope will be more intense than the pattern we witnessed so far.

It appears that 2014 is little different from 2011. Many of the cancer centers sent us about the same number of emails this year that they did for the same period in the 12 months right after our gift. Some have still not started to use email as a means of communicating with donors… even those who give online!

inbox-emptyOf the 33 institutions to whom we made gifts, eleven (exactly one-third) sent us not a single email all year. These institutions have sent us virtually  no email since our gift (one, a household name institution, didn’t even send us a thank-you email to acknowledge our gift!).

Of those who “bothered” to send us any, another third (10) sent us about one a month – barely enough so we don’t forget about them, but at least they’re in the game.  Only six cancer centers sent us two or more per month. The runaway leader is Boston’s Dana-Farber Cancer Institute, who has been in the forefront of digital communications among cancer centers since our first gift in 2010. Between “The Jimmy Fund”, DFCI and its many events, we received 107 email messages between New Year’s Day and Halloween – almost three per week!

Over the next few days, I’ll be presenting further analysis of these 418 email messages, including highlights of the most inspiring messages and best subject lines. If you work for a cancer center, contact me so we can discuss your organization’s messages in detail, privately.

Apple Pay, Twitter Buy, Facebook e-commerce, and your nonprofit

Did your mood change between the first six words of this headline, and the last two? Did your technological curiosity shift to something short of terror when the headline suggested that these technologies might have an impact on something bigger than how you buy a Big Mac or a sweater?

Good. You get it.

I think I’m a cool mobile/social consumer every time I order a coffee at Starbucks and pay for it with my mobile app, linked to my PayPal account. However, mobile and social e-commerce is advancing quickly, and your nonprofit needs to get on board. Consider these recent developments:

Apple Pay, the mobile payment technology that allows you to pay for things with credit cards tied to your iPhone, is launching in McDonald’s and Whole Foods. But… according to the same article, “you’ll be able to pay for your Uber, buy baseball tickets with MLB.com and order food from Seamless with one click.” Which means there’s no reason iPhone users can’t also just as easily donate to your organization, or buy tickets to your event. No reason, except, you’re not ready for it.

Twitter just announced a “Buy Now” feature that will appear in certain tweets, allowing subscribers to purchase a product (or make a gift) through a Twitter app, also using existing credit cards. Pretty soon you’ll be able to get donations through tweets as easily as @Megadeth sells concert tickets and tee-shirts. Once you figure out how, when, and for how much, to ask.

And, Facebook has begun adding “buy” buttons into the ads it places into users’ newsfeeds. This allows users to directly purchase items and services offered for sale. Since 62% of Facebooks’ revenue is now coming from mobile users, the combination of mobile and social with e-commerce is staggering. An article in Institutional Investor’s blog says, “Simply put, Facebook newsfeed ads deposit users directly into the mouths of the sales funnels of mobile-first companies.”

And, if the above isn’t scary enough, this just in from @NonProfitTimes :
“United Way Worldwide (UWW) is joining the digital currency world, announcing that it would begin accepting bitcoin donations. It is the latest 501(c)(3) to adopt the digital currency.”  Let’s just leave this one off the table for now. It even scares me.

I’m not suggesting that you abandon efforts to improve your next direct mail letter. That’s going to bring in more net money this fiscal year than any of the above. But you have to carve out some time to start playing in these mobile/social sandboxes, and get comfortable, because there’s a lot of opportunity there, especially among influential early adopters.

What is your nonprofit doing in mobile/social and ecommerce?

Are you investing enough in digital?

ALS home page featuring Ice Bucket Challenge

ALS Association home page

No, this is NOT another “ice bucket challenge” blog post. That’s been covered, and that story isn’t even new. It just validates what Heather Fignar and I, and many others, have been saying for years: give people a reason to have fun, express their creativity, employ social media and mobile technology, integrate it across all channels and all parts of your organization (especially media relations) and you have a good chance at making a splash, (pun intended) if not some real money.

No, this is about meaningful, ongoing investment in digital advertising, and why your nonprofit is probably woefully behind the times. So far behind, that I had to go to big box retail to show you the way. That’s right… a company selling hammers, power saws, kitchen cabinets, and 2″x4″s is kicking your butt in digital revenue.

Home Depot is investing 36% of its total ad budget into digital media, especially email messaging and social media. Print only gets 10%. Digital’s share is increasing. “We like the ROI” says their Chief Financial Officer.

The company says its continued transition to online sales and digital marketing are also key, according to Craig Menear, President, U.S. Retail.

“We’ve shifted to more targeted personalized messaging to become more relevant to customers, and as a result, costs attributable to print advertising are down 60% since 2010, and have been shifted to more efficient advertising.”

So how much does Home Depot sell online? Less than three percent of its sales originate at its new website. What? How can it make money by investing 36% of its ad budget (translation: fundraising budget) in a medium that generates less then three percent of its revenue? Because one doesn’t allocate one’s investment in growth based on the past; one invests based on the future, and Home Depot is betting on digital to drive future sales.

Also, Home Depot knows that the value of its digital investment goes way beyond the amount of orders actually placed online. It knows that handymen and handywomen scope out new product ideas, watch how-to videos, read emails with special offers, and then go into the store to do business “the old-fashioned” way.

Lest you think this is a new trend, an article from 2011 lays out the plan. Home Depot had just embarked on a $1.1 Billion investment in its new website, despite then-current online sales of just one percent of total retail. They knew, according to industry research, that “around 48% of retail sales will be influenced by the Internet in 2011 and projects this to rise to 53% by 2014.”

Sadly, many healthcare nonprofits I know budget their digital investment as if it were part of their continuing, proven, direct mail budget, expecting it to return $4 or $5 in revenue this year from every dollar invested. Then, they don’t even do a good job of measuring the impact of that paltry investment beyond the online donation page.

 

 

 

Are you testing enough? Neckties and Tactics

wrong ties

In the past, we preached, based on testing, that one longer donation page resulted in more completed gifts than several pages that each asked for pieces of the donation. No longer, it seems.

Test results release at last week’s New York Nonprofit Conference, sponsored by the Direct Marketing Association’s Nonprofit Federation, indicated that users have changed, and multi-page donation processes are worth testing again.

More testing ideas:

Test the color of the “Donate Now” button. Yes, the marketing/communications people want it to blend in with your home page header. YOU want it to stand out. While red may stand out, a member of the audience pointed out that 10% of men, and 3% of women, are red-blue colorblind.

How much are you cultivating your new email subscribers before determining if they are returning enough in gifts to cover their cost of acquisition? Maybe not long enough. Most of us apply a direct mail thought process to this equation, which is based on the typical single-use permission of a rented name. When you get an email subscriber, you have permission to contact them until they decide otherwise.  Going slow — as many as eight or ten emails before a blatant fundraising appeal — might yield better results.

Are you testing gift arrays, on both your mail reply forms and web forms? (Warning: the best array may be different for each). The National Park Foundation found they were getting many $25 gifts, even though their gift array started at $35 and went up from there. So they tested a $25 amount, and found a 17% lift in response rate, with only a 4% drop in average gift.

Are you talking to event participants about the event when you contact them for further follow-up, or are they getting the same email everyone else is?

Are you testing re-marketing? There are ad networks that can show your ads on other websites that are visited by people who’ve come to your site but not made a gift. Google runs one of them. One nonprofit found that 18% of the 1,500 site visitors they re-marketed ultimately made a gift. (Yes, many of them would have someday made a gift anyway.)

Personalized copy on the outer envelope seems to get it opened more. “Donor Since 20xx” is one line (printed right under the donor’s name) that seems to work.

Warning: I suspect much of testing results include a certain “Hawthorne Effect” – the new test works because it’s new, not because it’s universally better.  Results increase at first, then decline. Remember the Eagles’ hit There’s a New Kid in Town” or those too-wide and too-skinny neckties in your closet, waiting for the fashion pendulum to swing back the other way.

What tests have you run lately? How have they worked?

 

Are you a mobile, social healthcare fundraiser?

coffee_dollar

What do Starbucks’ and Facebook’s recent record-breaking quarterly results have to do with healthcare fundraising? Let’s explore.

Sure, mobile has been big with Facebook over the past year, but it continues to grow. Nearly 4 out of every 5 daily users of Facebook access it on their mobile device every day. Advertisers – for-profits and non-profits alike – are showing ads to these mobile users, as mobile ad revenue to Facebook now exceeds its ad revenue from desktops and laptops.

What ads are people viewing, and responding to, on Facebook? Starbucks also reported record income yesterday, and two reasons are its customer loyalty program, combined with its mobile platform. According to Starbucks’ CEO Howard Schultz, “mobile payment now accounts for over 15% of all transactions in our U.S. company operated stores and we are now processing on average 6 million mobile transactions in the U.S. every week alone.”

I’ll bet that a large number of your donors drink Starbucks coffee and are active Facebook users. Sure, the stereotypical little old lady writing checks is still a significant portion of your annual fund income, but maybe that’s because you’re putting most of your fundraising efforts into the channel that attracted her (and her mother before her). Boomers, who control 70% of the disposable income in America, are all drinking Starbucks and using Facebook to talk to their grandchildren.

The good news for you is that you don’t need to invest heavily in a mobile app. Just make your site work well on the major mobile platforms – a task you can outsource for a few thousand dollars. Then, get engaged more heavily on Facebook. Use Twitter and Facebook to get people to subscribe to your email newsletter list, and communicate with them on all of those channels.

Make it easy to donate online, and then give your supporters good reasons to donate, and you’ll find digital revenue growing. My fiancé posted a fundraising message on Facebook for one of her favorite nonprofits. I viewed it on my mobile, clicked on the “donate” button, and was able to make a gift very easily. She’s raised $160 from her friends in less than 24 hours from her Facebook “event.”

Heed these words from Starbucks’ CEO: “We have invested well ahead of the curve to create opportunities for our customers to engage with their social and digital networks on mobile devices and are now beginning to see the payoff of these investments.” It’s no longer “well ahead of the curve” but modest investment on your part now will position you well in the coming year – even this year’s holiday peak.

Special offer: If you’d like a glimpse into social media use by your healthcare market segment: cancer centers, children’s hospitals, etc., contact me about participating in a free study.

Do you talk about patients or research in your appeals?

‘People give to people’ is the old adage, and successful fundraising letters and emails are illustrated with photos and stories about hopeful, hungry children and homeless people. But does it work in healthcare fundraising?

We have found, time and again, that stories about research produce better fundraising results than those about patients. Imagine, a fact-filled, scientific explanation of some new technology producing more, and bigger, gifts, than a heart-rending or -warming story of a patient helped by the same technology! Exactly.

It’s not  just Amergent’s results, either. Recently John Graves and Dennis Lonergan of Eidolon Communications presented some test results at DMAW’s DM201 workshop. Here are two letters they tested side by side for a hospital:

dm201-creative-testing-lonergan-graves1            dm201-creative-testing-lonergan-graves2

The letter on the left is a story about how a new technology saved a patient’s life. The letter on the right is all about the technology itself. The tech-heavy letter, according to Graves and Lonergan, produced 43% more gifts, and a 3x lift in average gift (from $27 to $83)!

Why? That’s a trick question. I’m reminded by my very first bosses in direct marketing that “why” doesn’t matter. It’s tempting to speculate, however, and my speculation is that every family has a patient story, but technology reflects the hope of the future.

So, people may indeed give to people, but the people to whom people are giving might be research scientists and laboratory technicians.

What research stories do you tell? Do you have testing data that contradict ours?

How many new donors do you need?

One of the most important strategic decisions any development office can make is the allocation of its scarce fundraising resources into new donor acquisition. Yet, this question is often put aside until the rest of the budget is set. The result is disappointing donor growth.

Since new donor acquisition is almost always conducted at a first-year net cash outflow (each new donor may return only $.60 of each $1.00 you invest in its acquisition), it drains resources from other budget items. Of course, it’s also the only way to replace donors who die, move away, or lose interest, and the only way to grow your program in the future.

Here are three strategies, each described in the extreme to illustrate the point:

The “George Allen” approach

George Allen was the winningest football coach of both the Los Angeles Rams and the Washington Redskins. He became famous for trading away future year’s draft choices to acquire quality, veteran football players who produced results immediately. It helped him compile a winning record until the veterans retired. He was let go after the 1977 season, after which the team could do no better than .500 for the next four years.

In other words, you can cut or even eliminate acquisition, for a short time. This will result in greater short-term net revenue, but ultimately a decline in your gross and net fundraising. Even if  you retain 80% of donors from one year to the next, after three years, you’ll have only 51% of the donors you started with. I also call this the “Detroit City Bus Maintenance Deferral” method for obvious reasons. Many nonprofits practiced this in 2009 and 2010, and they’re still digging out of their downward revenue spiral.

The Amazon Approach

Jeff Bezos built Amazon into what it is today by plowing virtually all profits back into growth. It was a deliberate, and ultimately successful, attempt to capture market share and grow into a firm that now accounts for 20% of all U.S. e-commerce. He was able to continue this for so many years because he was able to eloquently articulate his plan, and demonstrate successful growth each quarter.

If your board, and your donors, are willing to reward dramatic donor growth year after year in exchange for net revenue to fund the mission, this can be successful for you, too.  Good luck with that.

The Goldilocks Approach

The “just right” donor acquisition strategy takes into account your traditional donor attrition and growth plans. If you lose 10,000 donors per year, and your growth needs require a net growth of 5,000 donors per year,  you need to invest in the addition of 15,000 new donors each year. The chart below illustrates how one organization’s donor acquisition (blue line) fell far short of  donor attrition (red line) over the past four years.

donor_gap

It’s not wrong to be opportunistic at times; if your new donor acquisition is producing good long-term donors, and the budget is available, and the board trusts you, ramp us acquisition beyond the required replacement-and-growth amount.

Nor is it wrong to be frugal; there will be extraordinary circumstances that require budget cuts, and acquisition is no more sacred than any other area of your budget.

Just know, in each case, that you’re saving for, or borrowing from, the future, in each case, and that neither is sustainable in the long run.