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2015 FRDNY MythBusters: Direct Response Edition!

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BONNIE CATENA, CONNECTOR-IN-CHIEF, CATENA CONNECTS
LARRY MAY, SENIOR VICE PRESIDENT FOR STRATEGIC DEVELOPMENT, INFOGROUP
J...

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Myth #1
Too much communication will drive people away!
Jann Schultz
Don’t ask again!
They just gave, “rest” them!
Don’t co...

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Fact:
Many next gifts come one to four months after the first gift.
Giving drops
when 6-11
months have
passed.
Jann Schult...

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2015 FRDNY MythBusters: Direct Response Edition!

  1. 1. BONNIE CATENA, CONNECTOR-IN-CHIEF, CATENA CONNECTS LARRY MAY, SENIOR VICE PRESIDENT FOR STRATEGIC DEVELOPMENT, INFOGROUP JANN SCHULTZ, SENIOR DIRECTOR INTEGRATED FUNDRAISING & COMMUNICATIONS, PROJE CT HOPE LISA MASKA, PARTNER, LAUTMAN MASKA NEILL & COMPANY 1 Track Sponsored By:
  2. 2. Myth #1 Too much communication will drive people away! Jann Schultz Don’t ask again! They just gave, “rest” them! Don’t contact your sustainers, they will cancel!! Be afraid!!! 2
  3. 3. Fact: Many next gifts come one to four months after the first gift. Giving drops when 6-11 months have passed. Jann Schultz 3
  4. 4. Fact The more you connect with your donors, the more funds you raise. • More net revenue • Better retention • More complaints* Lots of contact Much less contact • Less net revenue • Worse retention • Better ROI Jann Schultz 4
  5. 5. Truth It’s not quantity, it’s quality. Relevance. Validation. Appreciation. Jann Schultz 5
  6. 6. Myth #2 You are your target market. Bonnie Catena 6
  7. 7. MYTH: Direct mail goes right to my recycling bin… • FACT: According to Blackbaud’s 2014 Charitable Giving report, only 6.7% of overall fundraising revenue was raised online. • FACT: Direct mail still accounts for the majority of fundraising revenue contributed by individual donors. • FACT: Direct mail drives online giving—as much as 25% of an organization’s new donor online income is contributed by people who receive direct mail acquisition appeals. Bonnie Catena 7
  8. 8. YOU Are entrenched in your organization’s cause, day-in, day-out. 8Bonnie Catena
  9. 9. YOUR DONOR Has a life! Work. Grandchildren. Children. Volunteering. 9Bonnie Catena
  10. 10. YOUR DONOR Meet her where it’s most convenient for her to meet you—and direct mail is one of those places. 10Bonnie Catena
  11. 11. YOU Think of your organization’s cause in a business, not an emotional, context. 11Bonnie Catena
  12. 12. YOUR DONOR Thinks about your organization in an emotional way. She gives because she is moved to do so. 12Bonnie Catena
  13. 13. Janet Catena: “I read the story of that sick little girl and just had to help.” 13Bonnie Catena
  14. 14. But even if you are your target market, you’re not, because… 14Bonnie Catena
  15. 15. YOU Are entrenched in your organization’s cause, day-in, day-out. 15Bonnie Catena
  16. 16. YOU Think of your organization’s cause in a business, not an emotional, context. 16Bonnie Catena
  17. 17. MYTH We should communicate with our donors the way THEY want. FACT Listening to donors generally hurts income. Myth #3 Larry May 17
  18. 18. •“If we can figure out which donors give to which campaigns, we can mail less and stop aggravating them with so many appeals.” •Nice idea, but it doesn’t work. 18Larry May
  19. 19. •Few donors follow any real giving patterns. •Donors who give to a particular appeal are more likely to respond to that appeal again, but most don’t. •The donors most likely to respond are those who just made a gift. 19Larry May
  20. 20. •Given the option, many donors will ask for fewer contacts. •Fewer appeals = less income. •Many donors will say “Just contact me once a year.” •Then they won’t respond. 20Larry May
  21. 21. •Donors who ask for just one annual appeal will often respond to that appeal at a higher rate than all other donors. •Maybe you’ll get 10% of donors who responded to that package last year to give to it again, versus 5% for the mailing overall. 21Larry May
  22. 22. •But if you don’t keep sending them mail, that’s it – you got 10% to respond. •Your goal for overall retention should be 60%. •You have turned many of your best donors into lapsed donors who will be much more difficult to reactivate. 22Larry May
  23. 23. •What people say they want and what works for fundraising are usually opposites. •Focus groups are usually wrong. •People lie on surveys. 23Larry May
  24. 24. •Donors hate telemarketing, but it works. •Everyone hates telemarketing. •Even telemarketers hate telemarketing. •But it works. 24Larry May
  25. 25. Myth #4 Educate your donors and they will give. Jann Schultz 25
  26. 26. Fact Donors don’t want to solve a problem because it is big. They want to solve a problem because it is solvable. Jann Schultz 26
  27. 27. Truth Giving is emotional Jann Schultz “Thank you for making this opportunity available by sending an email and an easy website for donation. I deeply appreciate your efforts toward Nepal as well as your outreach to folks like me, who feel so powerless to help. This gives me the chance to contribute in some way.” –Donor, 4-26-15 27
  28. 28. Myth #5 Marketing is Fundraising. 28Bonnie Catena
  29. 29. MYTH: You can’t say that — it’s off-brand! • FACT: Marketing is about your organization. • FACT: Fundraising is about your donor. • FACT: Your donor is the super-hero. Your organization is the side-kick. 29Bonnie Catena
  30. 30. Mythbuster #5 Effective marketing communication puts the organization front-and-center. 30Bonnie Catena
  31. 31. Effective fundraising puts the donor front- and-center. 31Bonnie Catena
  32. 32. Your donor wants to help a person in need or advance a cause she’s passionate about. 32Bonnie Catena
  33. 33. “Think a little. Feel a lot.” Need vs. Empowerment 33Bonnie Catena
  34. 34. Myth #6 MYTH We know what our donors want. FACT Your opinions have little value in fundraising. 34Larry May
  35. 35. •“We all loved this package, but it bombed.” •“I know lots of successful organizations mail those types of packages, but they won’t work with our donors.” •“I talk to our donors all the time, and they hate that direct mail stuff.” 35Larry May
  36. 36. •We are not our donors. •The fact that we are all here at a fundraising convention in Manhattan should be evidence enough. 36Larry May
  37. 37. •Most of us here today probably identify as “liberal.” •But fewer than 20% of Americans do. •“Liberal” causes like environmentalism and fighting poverty are also supported by “conservatives” and “moderates.” •Have the imagination to know not everyone is like you. 37Larry May
  38. 38. •People who call to complain are not typical donors. •They are weirdos with too much time on their hands. 38Larry May
  39. 39. •The small number of comments and complaints you hear don’t represent the majority. •Only testing really tells what donors respond to. 39Larry May
  40. 40. •My colleague Graham Hunter: “Don’t turn your complainers into your focus group.” •The late, great Don Kuhn: “Lots of complaints right after you mail means you’ll have a great response.” 40Larry May
  41. 41. Myth #7 We need younger donors! Jann Schultz 41
  42. 42. Fact Project HOPE is focused on acquiring more donors in their 50’s and 60’s. Jann Schultz 42
  43. 43. Truth For fundraisers, age 55 is young! Jann Schultz 43
  44. 44. Myth #8 Long letters don’t work. (Neither do long emails.) 44Bonnie Catena
  45. 45. MYTH: This letter is way too long. No one will read it. • FACT: Testing — decades’ worth! — shows that longer letters win. • FACT: Psychology is at play. • FACT: There are exceptions, so you should test! 45Bonnie Catena
  46. 46. Mythbuster #8 Tell your story first. Consider length second. 46Bonnie Catena
  47. 47. A long letter lends an air of credibility and authenticity to your organization. 47Bonnie Catena
  48. 48. This maxim is carrying over to the online channel. 48Bonnie Catena
  49. 49. Exception: Brand- name charities Exception: Your organization? Rule: Test!! 49Bonnie Catena
  50. 50. MYTH Our program is unique. FACT Within categories, most programs are very much alike. Myth #9 50Larry May
  51. 51. •Categories such as health, children, international, environmental have predictable, similar patterns. •Unless you are doing things really wrong, the basic dynamics don’t change much. •BUT – small changes for the better have huge long-term impact. 51Larry May
  52. 52. Within organization category: • Approximately same average gift • Approximately same maximum donor base size • Approximately same number of gifts per donor, per year 52Larry May
  53. 53. Virtually all good programs have… •55-65% retention of current donors •30-35% first year conversion of new donors •50% or greater ultimate conversion of new donors •15-20% of new donors still active in 5 years 53Larry May
  54. 54. •Increase first-year new donor conversion a few percent upward… •Increase year-to-year retention a little… •Increase the average gift a few dollars… •And you have a very big long-term impact. 54Larry May
  55. 55. Myth #10 Direct Mail is dying! Jann Schultz 55
  56. 56. Truth Direct Mail is the best way to drive online giving. Jann Schultz 56
  57. 57. If I use a P.S., it looks like I forgot something. Myth #11 57Bonnie Catena
  58. 58. MYTH: Underlining, bold type and bullet points are gimmicks and donors know it. Take it all out. • FACT: There’s a method to the madness of the anatomy of a direct mail letter. • FACT: Ditto for the envelope, reply device, inserts…. • FACT: Yes. It’s counter-intuitive. That makes it fun! 58Bonnie Catena
  59. 59. Mythbuster #11 Donors don't read the whole letter. They read the lead and the P.S. and skim the rest. 59Bonnie Catena
  60. 60. Accordingly, the best fundraising letters are structured as a map of the story you are telling. 60Bonnie Catena
  61. 61. We call out the most salient points with short paragraphs, bullets, underlining and the P.S. 61Bonnie Catena
  62. 62. More Gospel: Envelope: Make it look personal Reply device: Repeat the offer Inserts: Reinforce the story and the offer 62Bonnie Catena
  63. 63. MYTH Our lapsed donors have lost interest in our cause. FACT Lapsed donors still care and you need to make more effort with them. Myth #12 63Larry May
  64. 64. • Stop comparing your lapsed donors to your best donors. • Start comparing lapsed donors to prospects. 64Larry May
  65. 65. • Most organizations don’t invest nearly enough in lapsed reactivation. • Good Goal: reactivate as many lapses as you gain new donors. 65Larry May
  66. 66. • Almost half of the new donors you acquire never make a second contribution. • Those who do are more valuable than a group of new donors, even if they have lapsed. • Donors don’t keep track of how often they give to you. 66Larry May
  67. 67. • Every lapsed donor who renews is at minimum a two- time donor. • Renewed lapsed donors often have 50% greater LTV than new names. 67Larry May
  68. 68. • Use basic RFM segmentation on your 24- to 60-month lapses. • As you lose recency in older names, increase the frequency and monetary (gift amount). 68Larry May
  69. 69. • Match the names that don’t make your RFM cut, and all older names, to one or more co-op databases to find recency. • Applying co-op recency activity can let you identify good prospects even among very long lapsed donors. • Match your long lapses, even 10+ years, to a donor co-op and find those still active. 69Larry May
  70. 70. Speaker Contacts: Bonnie Catena bonnie@catenaconnects.com 646.678.0207 Larry May larry.may@infogroup.com 914.330.7900 Jann Schultz jschultz@projecthope.org 540.837.2100 70 Lisa Maska, Lautman Maska Neill & Company lmaska@lautmandc.com 202-296-9660 ext 206 Moderator:

Editor's Notes

  • JANN/Myth #1
    My passion is Donor Service – so this first myth is often a point of confusion for those who know me. However, my responsibility is to raise funds while also caring for our donors. So the first myth I want to bust is:

    Myth #1: Too much communication will drive donors away

    <CLICK>This myth inspires fear. We hear in our hallways “Don’t ask too often.” “They just gave, don’t contact them!” and “Don’t contact our credit card/EFT sustainers, they will cancel!”

    I’d like to pose a question to the group: In your direct mail cultivation plan, how many times a year do you ask your single gift donors to give? Raise your hand: 1-5, 6-10, 11-15, 16+?

    <NEXT SLIDE>
  • JANN (layered graphics)

    It is a statistical fact: most next gifts come one to four months after the first gift - then giving drops when 6-11 months have passed.
    <click>
    You will see a small up-tick at 12 months – those are your annual givers.
    If your donor has not given a second gift by 13 months, the likelihood they will ever give again drops off significantly.

    You’ve heard it, and if you have tested it, you’ve seen it play out year after year. You have a very short window of opportunity.

    <next slide>
  • JANN
    The fact is: The more you connect with your donors, the more funds you raise.
    Lots of contact = more net revenue, better retention, more complaints*

    Lets talk about complaints…yes, you will hear from your donors. And it is YOUR opportunity to build a relationship with them! Customize their preferences. Don’t arbitrarily remove them from all mailings! ASK them for their preferred contact cadence. How often would they like to hear about their gifts at work? When do they like to receive mail solicitations? Don’t assume.

    AND training is KEY – don’t let this responsibility fall on an admin in your office. They will take the easy road and mark everyone DO NOT MAIL. Incentivize “saving” a donor and retaining them in the mail stream. Design your database so that you can offer options – not just ALL or NONE.

    Less contact = less net revenue
    if you don’t ask, you don’t get
    worse retention – less opportunity to give and engage with the organization
    and better ROI due to reduced costs, but your overall performance metrics decline
  • JANN: (Layered graphics)

    The truth? It’s not quantity, its quality. <click>
    It is about relevance to the donor.
    Do they swoon over your letters?
    …well, do they at least interrupt their busy day to read your mail?

    People don’t complain if they receive the content they are looking for, that validates their decision to give and continues to engage their emotions with your organization.
    They don’t complain if you express your appreciation and show how their gifts are at work.

    For Project HOPE we have had double digit increase in retention and improved avg gift value (up by $3 YOY) and LTV of donors over the past 18 months.
    At the same time we have increased # of touchpoints (driven by organization need for NET.)
    To do this successfully, we have focused on:
    donor centric communication <click>
    improving the value proposition of the HOPE offer through HOPE Promise <click>
    Have insured that our acknowledgements were relevant to the appeal the donor gave to <click>
    We launched a Donor Services call center – to move customer service away from the admin staff
    And <click> initiated a Voice of the Donor project to collect donor feedback and act on it.
  • JANN/Myth #4
    Does this myth sound familiar? Educate your donors and they will give!

    Myth #4 is often the point of tension between the communications department and the fundraising team.
    The Comms team is yelling “this is off brand” while the fundraising team is hollering back “statistics don’t sell.”
    And your programs team complains that you are over-simplifying the problem.

    I picked this graphic, from 2013 because it educates you on the Syrian Refugee problem – however, as a fundraiser…”statistics don’t sell!”

    <next slide>
  • JANN: (Layered graphics)

    It is important to remember this FACT. The comms team and program staff are NOT your donors! Donors, not professionals, are your target audience.

    The fact is: Donors don’t want to solve a problem because it is big. Poverty. Hunger. Access to Health Care.
    <Click>
    Donors want to solve a problem because it is solvable.
    They want to know that their small gift can make a big difference.
    Like:
    Give a vaccination to save a child’s life.
    Provide a meal to make a difference.
    Your donor’s want to know their gift matters.

    <next slide>
  • JANN: (Layered graphics)
    Education does not sell. The Truth is, giving is emotional. Not rational.
    <click>
    As Donald Caine said in his book “Within Reason” “Emotion leads to action, reason leads to conclusion.”

    Yes, education has its place within your broad overall communication plan, but it is not a function of fundraising.

    For Project HOPE, after almost a decade of decline in our donor file, we have seen YOY file growth through the application of this truth.
    Tested out of an existing, long standing control package that did not connect the donor emotionally to the impact that their gift would make
    We have developed our HOPE offer proposition. “Your gift multiplied. Always.” to demonstrate the power of a donors gift, however small it may be
    Improved fundraising performance of our quarterly donor newsletters by focusing on the DONOR, not our organization.

    <click>
    This can best be summed up by a recent piece of feedback from a donor, part of our “Voice of Our Donor” program –
    - Thank you for making this opportunity available by sending an email and an easy website for donation. I deeply appreciate your efforts toward Nepal as well as your outreach to folks like me, who feel so powerless to help. This gives me the chance to contribute in some way.
    - Your work is vital! . . . Donor gifts are positively leveraged almost beyond belief . . . Here's to saving more lives in Nepal . . .
  • JANN: Myth #7

    I don’t know about you, but this Myth drives me nuts. At every board meeting, the board discusses a “young donor strategy” and asks how we are engaging younger “donors” on social media to raise more money.

    I’m not sure what your donor file looks like, but mine is OLD. <click>
    Our average age is older than many files, as we have a segment of legacy donors who still remember when the SS HOPE sailed in the 1960’s. The HOPE retired in 1974!

    <next slide>
  • JANN:

    I’m interested in acquiring younger donors – however, it is the “real” definition of “young.” I’m interested in acquiring more donors in their 60’s and 50’s.
    Donors who have money to give and not just support through likes and follows.

    <next slide>

  • JANN: (layered graphics)
    Truth: For fundraisers, age 55 is young!
    <click>
    A simple fact – a typical donor file skews older (maybe not as old as the Project HOPE file, but certainly older.) <click>
    Donors over 50 have a higher retention rate that those under the age of 50. <click>
    And donor’s in the age bracket 55+ give significantly more than those under 55. <click>
    My job is to raise more funds for Project HOPE. I’m going where the money is!

    For Project HOPE we are acquiring “younger” donors through channel diversification and moving away from a dependence on direct mail.
    In the past year, we launched long-form radio fundraising and are bringing on “younger” donors (age 50+) at a higher value first time gift in the ~$80-90 range.

    <next slide>
  • JANN: Myth $10

    We have heard it now for years. The pronouncement that direct mail is dead.

    I remember being at a conference in 2007 and listening to a charity share that they were shifting significant budget away from mail and investing primarily in email. A couple of years pass and that online-only strategy was dead and the direct response program in disarray as they learned what many of us know from our For-Profit experience – you have to build a multi-channel program.
    - Diversification is key to your direct response plan.
  • JANN: So what is the truth? <click>
    The truth is, Direct Mail is the best way to drive online giving at Project HOPE.
    ASK: Is this the same for other org’s in the audience?
    <click>
    The simple fact is, you have to be where your donors are – and they are engaged both online and offline. You can’t do one without the other.
    DM recipients research online
    DM recipients give online
    It’s a fact: Your online and offline messaging must be consistent. When they go to your website or social media, do they see elements of your offline campaign?
    The data doesn’t lie: Donors who give both online and offline have higher long term value.
    Email recipients are reminded to give offline*
    You have to measure crossover activity.
    *CASE: DM remains the main driver of unrestricted revenue at HOPE. Project HOPE has a segmented email file of chronic non-responders…regular match back demonstrated that this was a group that were responding offline. Despite what appeared to be a large segment of inactive online donors.
    You must dig into the data before making assumptions about channel and response.
    We also do match back after every direct mail acquisition campaign – to be able to properly attribute new donors to what inspired their gift – the direct mail piece.

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