Where to find all that money you’re losing

By Charlie Hulme
On March 31, 2014 At 2:00 pm

Category : donor service, individuals, Latest posts, loyalty, retention

Responses : 2 Comments

imagesZTAKQU0K

You’re grocery shopping on a tight budget. You’ve got everything you need and a few things you want. You approach checkout knowing the £40 in your pocket will just about cover everything. But when you come to pay you find you’ve lost £10. Do you:

1)      Look for the missing £10 (you know you had it a moment ago)?

2)      Decide to do without a quarter of what you intended to get?

Option 1 right? So why when faced with falling, or at best flat net income do so many fundraisers simply lower target? If we wouldn’t go without ourselves, why do we wilfully make that choice on behalf of those whose lives we’re supposed to be saving?  We owe it to them to look for all the money lost on our watch. But where to start looking?

Well, so often the thing we’re looking for is right in front of us, and this is no different.

Take your current ‘supporter journey’. What was the thinking behind it? Chances are you sat in a series of meetings with an agency guru. You studied colourful charts of giving behaviour. You minutely analysed at what point people dropped off your file. You did a comprehensive creative audit to identify messages that had been popular. Then out came the white board and together you mapped the perfect journey. Yes it felt an awful lot like the one you did last year (and the year before, and very similar to the year before that), but this time you were going to have ‘big vision’ and be ‘innovative’. You were going to use the latest ‘insight’ to re-segment the data. You were going to tell ‘stories’ and be ‘emotional’. Oh, and you were going to add a few ‘thank you’ messages along the way to ‘surprise and delight’.

imagesT9ZN5CQI How’s it working so far; any significant improvement on last year? I’d be surprised if you were delighted!

Or how about that new creative test that promised so much but didn’t deliver? Are we really surprised that it didn’t? After all how often do you ever beat the control? Why do you think the latest thing you’re being sold is ‘dare to fail’? The people selling it know that’s exactly what it’ll do; this is the only angle left to pitch it!

And of course there’s that loyalty programme you were told would massively reduce attrition. How’s that working out? I know several big name charities that have sunk hundreds of thousands of pounds into agency led loyalty schemes only to see attrition get worse. It’s absurd to think that throwing in a random, insincere ‘thank you’ letter, or clumsy rambling phone call is suddenly going to solve the problem. Maybe you’ll get a little bump, but a little bump isn’t going to save the world.

What do these expensive, wasteful, time consuming exercises have in common (apart from not working)? They’re all trying to influence behaviour by studying behaviour. Now it may be fundraising blasphemy to say this but fundraisers do not and cannot directly impact behaviour.

Ok, take a breath and read on…

No matter how they’re selling it to you, studying behaviour can only ever lead to the idiotic premise that your best donors are your best donors because they’re your best donors. Where do you go from there?

It doesn’t matter how complex you get with data analysis. It doesn’t matter how far back you can track. It doesn’t matter how much extra information you overlay. It doesn’t matter how many intriguing patterns you find; “Wow, 52% of our donors drop off after 3 months and 19% of them did so on a Wednesday. Now if we overlay this socio economic modelling we can see that 37% of them wear red socks on Wednesdays, 23% of them are left handed, 2% of them have a peanut allergy and I’m distantly related to one of them”. Fascinating. Useless. No wonder nothing’s having an impact!

‘Big vision’ is great but it doesn’t work if it’s grounded in where you want donors to be without knowing where they actually are. Data analysis is great, but it doesn’t work if you are analysing the effect and not the cause. Innovation is great, but it doesn’t work if it’s only based on your best guess. Storytelling is great, but it doesn’t work if you don’t know which stories to tell.

If your journey starts in the wrong place how can it end in the right one?

So what can we do? Focus on the thing that we can directly impact; how a donor thinks and feels about us. It’s intuitively obvious; the human decision making chain is feeling, thought, action. No one disputes this, so why does no one act on it? Because, like in so many other area’s, it takes us at least 20 years to catch up with the commercial sector. They don’t have the performance and retention problems we do because they took relationship theory, tested it and turned it into fact. Measuring and impacting how a customer/donor thinks and feels is easy to do; the charities that are doing it see incredible results. The rest go back to the white board again (and again, and again…) sticking with ‘best practise’ while presiding over the worst results.

Fixing this simple, basic flaw that undermines everything we do is the key to an immediate lift in results, improved lifetime value and retention.

Focus here and you’ll find all the money you’ve lost (and a load more you didn’t even know you could have).

Share Button
Charlie Hulme (30 blogs on 101fundraising)

Charlie is MD of Donor Voice. He helps charities uncover what, of all the things they do, cause relationship strength and what is harmful. Partners see a massive improvement in performance, value and retention. Voted top speaker at the Institute of Fundraising's National Convention in 2013, he writes frequently for SOFII, 101 Fundraising, the Institute of Fundraising and many others.


Add your comment

XHTML : You may use these tags : <a href="" title=""> <abbr title=""> <acronym title=""> <b> <blockquote cite=""> <cite> <code> <del datetime=""> <em> <i> <q cite=""> <s> <strike> <strong>



Comments

  1. Pingback: Fundraisingwoche vom 31.03.-06.04.2014 | sozialmarketing.de - wir lieben Fundraising

  2. Charlie, thanks for the thought-provoking post. Do you have any examples of successful non-profits that have adopted this way of thinking?

     — Reply