Revenge of the passive loyals

January 11, 2018

Post by: Nick Ellinger

Facebooktwitterlinkedinmail

It is a truth universally acknowledged, that a loyal donor in possession of strong commitment, must be in want of things to do beyond their donation.

Or at least we believe so.  We look at the graphs of value and they usually show that those who volunteer, advocate, walk, etc. in addition to their donations have greater long-term value than those who don’t.  And before you can say “alternate causality,” we’re off to the races with engagement activities designed to set the net for advocates.  Online models will even use engagement frequency and quantity as a proxy for propensity to give.

But this assumption may be flawed.  Leave aside for a moment these graphs of value.  (They forget to control for history with an organization.  Brand new donors both are less like to have done other activities because of mere lack of exposure and have very poor lifetime values.  Oops.  Guess I couldn’t leave them aside.)

Is it possible that there is an undiscovered tribe of donors that are loyal to your nonprofit but don’t want to do anything beyond donating?

Well, no.  They aren’t undiscovered.

In Building Donor Loyalty (from 2004), Adrian Sargeant and Elaine Jay talk about a typology of loyalty based on two things: the perceived strength of the relationship and the potential to invest in the relationship.  We’re all well familiar with those low in both measures: the responders. (Per the book: “Nonprofits can thus do little to manage retention among this group, and rather than persist they might do better to conserve their resources and invest them elsewhere.”)

And for those who are high in potential to invest in the relationship, you have “potentials,” who, with the right treatment, can turn into “advocates.”

This leaves the passive loyals – the aforementioned tribe of loyalists who have a strong relationship with your organization, but little ability for you to invest in the relationship.  That’s not a bad thing – -these are good, loyal donors.  As Sargeant and Jay say “Campaigns that generate high numbers of this category of supporter have successfully matched their cause with individuals with a genuine interest and concern.”

There’s a caution here, though for those with the engagement mindset.  Bombarding these people with irrelevant (to them) asks commits two cardinal sins: wasting your money and annoying your donors.  After all, that’s not why they signed up.

So how do you differentiate your committed donors from your non-committed?  And how do you tell your advocates from your passive loyals?

Ask.

As I’ve written at The Agitator, commitment and preferences are some of the first things you should be trying to learn about your donors.  And this listening should happen as soon as is humanly possible.  In those posts, you’ll see some examples of organizations that have lifted their responses and their retention rates by listening well, early, and often; the existence of passive loyals is yey one more reason.

Learning about preferences isn’t just mail versus phone versus email or frequency – it’s also learning what a donor wants to hear from you.  In this case, it’s not that the donor isn’t that into you.  They just show love by donating.  Leaving them as they wish on other issues is your way of showing that love back.

Facebooktwitterlinkedinmail

Does it hurt to ask (for feedback)?

January 4, 2018

Post by: Nick Ellinger

Facebooktwitterlinkedinmail

You can hardly move today without being asked for your feedback.  Over a year ago, I charted a week of feedback and found every transaction asked me for feedback except for a parking lot, a local Chinese restaurant, and an airline that stranded me in a city for a night without paying for my hotel room then sent me home through an entirely different city.  Not that I’m still bitter.

Even the US Postal Service and the hotel where the desk clerk was asleep asked for feedback.  I argued then that if you don’t ask for feedback, you are worse at donor services than the USPS.

But what if people are now being flooded with surveys and now hate them?  What if their ubiquity has sapped them of any meaning?  You’ll see this argument put out there seriously in articles like “The Inventor of Customer Satisfaction Surveys Is Sick of Them, Too” for Bloomberg (I’m not linking to this piece because 1) he wasn’t the inventor of customer satisfaction surveys and 2) he didn’t say he was sick of all customer surveys.  However, everything else in the title of the article (“The”, “of”, and “Too”) is 100% true.)  And you’ll see polls that say 70% of people are sick of giving feedback (despite polls being a form of feedback, making this the most ouroboros-y poll since the true/false question “the answer to this question is false”).

So let’s answer the question: do people like to have questions asked of them?  Huang et al tested this in the Journal of Personality and Social Psychology. They analyzed getting-to-know-you conversations online as well as face-to-face speed dating conversations.  The paper is well worth a read for full methodology and such, but the short version is:

  • The more questions you asked, the more people liked you.
  • People didn’t think that questions would relate to liking, meaning that this influence technique flies under the radar.
  • The most effective questions for liking is the follow-up question based on what a person just said. Those questions that were a full switch to a different topic decreased liking.  Thus, as we talk about getting feedback, questions that follow satisfaction questions like “We’re glad you enjoyed donating.  What did you like best?” or “We’re sorry we didn’t have a good online experience.  What can we do better?” are important ones.

These sound like basic instructions on how to be a decent conversationalist.  But it’s good to see that the conventional wisdom is true.  And it sets into stark relief how we don’t always follow these conversational norms as we try to turn a transition into a relationship with donors.

Perhaps most important is why the researchers believe asking questions increases liking.  To wit:

“We suggest that asking questions increases liking because doing so indicates responsiveness, a desirable interpersonal construct identified by prior research that encompasses the verbal and nonverbal behaviors that fulfill the needs and wishes of one’s conversation partner.”

So question asking is a form of responsiveness, which increases liking.  So how do I create responsiveness?  Returning to the paper:

“Reis and Shaver (1988) developed a model of interpersonal intimacy that defines responsiveness as reflecting three components: understanding, validation, and care for the partner. First, the understanding component of responsiveness refers to accurately comprehending the question-responder’s self-perceptions—their needs, goals, beliefs, emotions, and life situation.  By asking questions, one elicits information from the partner, including facts, attitudes, preferences, and emotional expressions, which help to more accurately and appropriately understand one’s partner…

Second, the validation component of responsiveness is defined as valuing and respecting the partner’s self-perceptions and perspectives… By asking questions, you acknowledge that the partner’s perspective is valuable enough that you want to know more. By soliciting more information from the partner, asking a question expresses interest in the partner’s viewpoint.

Finally, the caring component of responsiveness means showing affection and concern for the partner. Especially in initial interactions that are often devoid of prior relational information, asking questions is likely to signal care for the partner.”

Understanding.  Validation.  Care. How many surveys do you take that convey this?

I suspect that much of the backlash against surveys is against surveys that don’t let you say the things you want to say (understanding), acknowledge your viewpoint is valid (validation), and/or make any difference (care).  That why when we set up feedback systems, even the automatic responses vary based on how much you care about the organization and whether you enjoyed your interaction.  Open-ended questions also give constituents the opportunity to praise or vent and donor services members follow up on specific points raised.  One organization has even started incorporating things they did based on their donors’ feedback into an annual letter to donors as a way of showing that they care about the responses.

This liking leads to results.  Not just better processes – although that alone is a reason to do it – but also increased donations:

So if someone asks you if people are sick of post-interaction surveys, tell them that people might be sick of the surveys that suck.  But there will always be a place for a quality survey that provides valuable feedback that is acted on.

And like that person a little bit more based on the fact they asked you a question.  After all, it’s science!

Facebooktwitterlinkedinmail

Letters from Santa Claus

December 28, 2017

Post by: Nick Ellinger

Facebooktwitterlinkedinmail

Thank you for your kind letter letting me know what you want this Christmas.  While I am happy to give, I only give at the holidays and thus am not interested in joining your monthly giving program.  Additionally, since I give once a year, you need not mail me 20 times throughout the year.  One letter around the holidays will suffice.

Ho ho ho,
Santa Claus


Thank you for your email; I’d be happy to give you a Christmas gift.  Unfortunately, your online form requires a title for whatever reason.  I would be happy to oblige, but mine is not listed.  I had to settle for going by Mister.  May I humbly suggest you either not require title as a field or create a fully exhaustive list (even though my title is unusual)?

Your servant,
Saint (Mister?) Nicholas


Mrs. Claus and I enjoyed getting your letter.  She is a particular supporter of yours and wanted to make sure you were happy this Christmas.  However, when I went to give you your gift online, I could only make the gift in my own name.  For the receipt and for recognition in your annual report, can you list our gift in both names as seen below?

Thank you,
Mr. Santa and Mrs. Angela Claus


I gave a gift on December 25th and received your receipt immediately; thank you.  However, it has been but five days hence and I’ve received no less than five emails from you requesting additional gifts.  I only give the one day per year.  Was my 12/25 gift insufficient?  Please don’t ask me for additional gifts when I have just given online or you shall find yourself on the naughty list.

Yours,
Kris Kringle


Thank you for the kind request of a Christmas gift.  I would love to give you a gift, but I saw no way to make the conversion from North Pole krones to American dollars on your site.  Might you consider including PayPal on your site to facilitate this?

Tak,
Julemanden


I received your request for a gift.  Unfortunately, the previous two years, my correspondence back from you has been limited to a tax receipt.  We have no taxes here, one of the very few compensations for the climate.  But more importantly, I don’t know what you did with the gift, how you enjoyed it, or if you were grateful.  I have many gifts to give this time of year and while I expect little in return, I do expect this much.  Thus, you have fallen off my gift-giving list for now.

Merry Christmas,
Santa

Facebooktwitterlinkedinmail

Miracle on 34th Street – The Alternate Ending

December 21, 2017

Post by: Nick Ellinger

Facebooktwitterlinkedinmail

 

DEFENSE ATTORNEY: Thousands of letters, all addressed to Santa Claus!

JUDGE: What do you have to say about all of this, Mr. Kringle?

KRINGLE: Your Honor, it started with one letter many years ago.  It was to the guy who owned the place before I did, but it was a good cause, so I gave a gift.  Well, it turns out once you donate once in the wrong guy’s envelope, every charity gets that information.  I tried to correct them one at a time, but I would have had a better chance yelling at the tide not to come in.

JUDGE: But what about the sheer volume?

KRINGLE: Lemme tell you, your Honor – once you are on one list, you are on them all.  It’s like these charities have some sort of collective of donors or something.  And it turns out that when someone good asks me for a gift in December, I can’t help but make their dreams come true. (winks at the camera)

JUDGE: But these are postmarked February, June, August, and whatever.  Do you only give in December?

KRINGLE: Yes, your honor.  You’d think after over a thousand years of doing this they’d take a hint, but I’ve had just about as much success trying to take requests just in December as on the name thing.

JUDGE: This is sure a lot of paper.  Wouldn’t it be easier if they emailed you?  This is 2017, after all.

KRINGLE: Really?  Then why are we in black and white? (rim shot)

I guess it’s because I started giving through the mail.  Some email me in addition now, but no one emails me instead.  It’s kinda sad; you give and give, but only a few of these folks ever get to know me.

JUDGE: So what do you do with all of these letters?

KRINGLE: Well, I haven’t had to pay for address labels in years, I can tell you that!  I recycle most of them, but the ones from environmental charities, I throw away.  When you’ve lived as long as I have, you have to take pleasure in irony.

JUDGE: Very well, then.  I declare the defendant to be, for the purposes of charity mailings, Santa Claus on the condition that he removes these infernal missives from my desk.  Court is adjourned.

Facebooktwitterlinkedinmail

Metrics for the global maximum

December 14, 2017

Post by: Nick Ellinger

Facebooktwitterlinkedinmail

It’s tempting to say that every improvement is a win.  You got an extra three percent on response rate or average gift nudged up.  And it is to a significant extent.

But the question you must ask is what is the goal toward which you are optimizing.  To re-use an analogy, let’s say you wanted to climb the highest mountain by continually climbing the highest hill you could see and repeating.  If you were to do this in the village where I grew up (Greendale, WI) with a good set of binoculars, you would end up in Hales Corners – elevation 868 feet.

Progress, yes, just like that average gift or response rate boost.  But there are higher mountains to climb.

Analytics guru Avinash Kaushik (whose first book Web Analytics: An Hour a Day I highly recommend and who now has Web Analytics 2.0 out in case you were wondering what to get me for Christmas) just talked about optimizing for the global maximum, rather than the local one, in an excellent blog post here.

In it, he talks about how if you watch NFL games, you will see the Microsoft Surface in advertisements and in the hands of coaches and players.  They are doing great on reach and brand lift; they are at their local maxima.

(Source: AP. Associated Press, not Adrian Peterson)

But Surface has a .29% market share.  They haven’t solved for a global maximum goal.

This has two implications: one for how we test to get our goal and the other for what our goals are.

In terms of testing, a traditional A/B test for what teaser we should use or what color the envelope should be is locally optimizing for a locally optimized goal.  You may get improvement, but it’s specific to that communication at that time.

A way to break out of this is to go back to your seventh-grade science project: start with a hypothesis.  More specifically, start with a hypothesis that, if proven one way or the other, will change how you do business.

Take the Nudge-Award-winning test that showed UNHCR that it got a 42% lift when it presented its symbolic gifts symmetrically (e.g., five blankets, seven blankets, nine blankets versus blankets, radiator, and stove).  This is something that, while small, changes every donation form and every response device they use.

It’s even more powerful if you can test thousands of versions at once to find concepts that work for you globally.

But Kaushik’s look at global optimization also begs the question of whether we are looking at the right goals.

There is nothing wrong, and most things right, about goals like response rate, average gift, and net revenue per communication.  Or larger goals like hitting your net revenue budget and file size.

But all these could use a refinement like the one Kaushik recommends for the Microsoft Surface: instead of measuring brand recall, test whether people are more likely to choose the Surface (since buying is the behavior you are shooting for).

So, for example, do you want to measure file size?  Or do you want to measure file size of the donor segment with a connection to your cause, which you’ve determined is way more profitable (nonprofitable?) than those donors without a cause connection.

In the end, as the Blackbaud Vital Signs report concludes “American donors are more valuable to American nonprofit organizations than the organizations are to the donors.”  A global maximum metric needs to be, or approximate, whether you are leaving your donor potential greater than you started.  A “successful” mailing that nets $100,000 isn’t if it turns off donors with lifetime values of $200,000.

We measure this in commitment; you may have your own measure.  But it’s worth keeping as a North Star in your analytics constellation.

Facebooktwitterlinkedinmail

Repetition: a fundraiser’s friend, or a supporter’s menace?

December 7, 2017

Post by: Dr. Kiki Koutmeridou

Facebooktwitterlinkedinmail

I’m sure you have a friend, or relative, who constantly repeats things. Well, I do too. And it’s true; repetition enhances memory.  I remember perfectly what my friend’s latest issue was. So what? Was my advice different after the 8th repetition than it was after the first? More importantly, did my willingness to give advice increase with every repetition? No. If anything, it decreased. You know what increased? My negative mood and attitude. I also got bored and started ignoring him.

How is this relevant to fundraising? It’s the same premise. We’re talking about helping behaviour; giving a friend your time and advice, giving a worthy cause your time and/or money.

Repetition does have some positive qualities: it reinforces the message; it makes a theme stand out; it enhances memory. But wait a minute.

As fundraisers, what are we trying to do? Teach people a lesson, improve their memory, or motivate them to give in the moment?

The crucial question is: does repetition increase giving? To my knowledge, this hasn’t been properly tested, and I haven’t seen any evidence to support the idea.

Here’s a controversial thought. Could it be that people keep giving despite repetition and not thanks to it? Or could it be that repetition might actually decrease giving?

If you think about it, repetition is bloody annoying!

If you think about it, repetition is bloody annoying!

If you think about it, repetition is bloody annoying!

But there are several advocates of repetition in the context of fundraising out there. I’m here to challenge this stance and to be challenged in return.

First, a crucial distinction: I’m not talking about exposure. There’s no argument that repeated exposure to your brand through multichannel marketing will increase attention and positive attitudes towards it. In this blog, I focus on repetitive messaging.

Even for exposure though, too much repetition isn’t ideal. Continuous or non-stop marketing activity is less effective than what is known as pulsing; a period of marketing activity followed by a period of no marketing at all and so on. But I digress.

The effect of message repetition across communications

What’s the impact of using the same message over and over again across the communications cycle?

To an extent, we can get away with even sending the same appeal again. We all know that the majority of people don’t open them. Those who do, don’t read them thoroughly and those who do, won’t remember them after a while. So, repeating the same appeal is not going to result in disaster.

Why not keep doing it? Because repeated exposure to the same ad, decreases recall of brand information, decreases positive attitudes towards the ad and decreases sales. On the contrary, using a series of ads increases performance in all these measures. See the graph below (and the whole paper here). The same can be assumed for fundraising appeals.

Message repetition in the same communication

Of all kinds of repetitions, this is the one that boggles my mind the most. In any given appeal, the copy is repetitive. Am I the only one who gets annoyed? If you were a supporter, would you find that interesting, or engaging, or even, normal? I’d like to think not.

But here are some arguments I’ve heard in support of this repetitive loop of insanity:

  • “People need to be informed and repetition increases attention”. Maybe, but you have the wrong goal in mind. In the context of fundraising, people just need to be motivated to give. By the way, trying to educate them isn’t the way to do it.
  • “People will remember it better”. So what? Is the goal to improve my memory on the issue, or to make me donate towards the issue? Also, why do we need people to remember anything when the next appeal is just around the corner? Again, we just need them to give in the moment.
  • “Repetition might convince people to help”. Ultimately, that’s the most important argument. If this is accurate, then repeat your message to eternity.

But why would repetition make me more likely to help? If a piece of information can trigger my helping behaviour, it will do so the first time round. What I need to tackle then is my procrastination.

Think of this: Johnny suffers from a rare disease that affected his ability to walk. Unless he receives a very expensive treatment, he will never walk again. You can help him with just $20. Help now #JohnnyWalker.

Now, how many times do I need to repeat this to convince you to donate? Remember, I’m not talking about different points in time. I’m talking about right now. If you’re not already, would you be convinced if I repeated variations of this 3 more times? Or is it that you felt some inclination to help already but procrastination is in the way?

A final point that counteracts, all the arguments above. As fundraisers, we don’t want to be reminded that some of our messages go unnoticed. But as humans, we know we skim read – some of you are doing it right now. If a conversation lasts too long our thoughts start wandering off. That happens even in the absence of repetition. What’s the likelihood of people not “skipping” the repetitive parts? And what’s the point of repetition, if people can avoid it?

Repetition of the ask

Let me be more provocative. Why do we even have multiple asks in the same communication? To make sure people see it, one might say. As if we don’t assume there’s a financial ask the moment we see any charitable communication. The ask is implicit. That’s why “thank – you” communications also raise money, even when there is no ask in them. People know the concept of charity. People understand. People give.

I’m not suggesting to never ask again, or to change your letter structure completely. I’m only asking us to take a step back and think: Would you be more likely to give just because the message is repeated? More importantly, do we have actual evidence that repetition increases giving? If we don’t, let’s find some before we keep annoying the hell out of our supporters. If you do, please share it with us.

Kiki

Behavioural Science Strategist

Facebooktwitterlinkedinmail

I have bad news and, well…

November 30, 2017

Post by: Nick Ellinger

Facebooktwitterlinkedinmail

I’m generally an optimist. Not a Panglossian “we live in the best of all possible worlds” optimist, but I think we can get to that world in the long term.

But I’ll be darned if many of the fundraising trends seem to be pointed in the wrong direction. Here’s what I’ve been seeing; please leave any good news you’ve seen in the comments to help cheer me up:

General

  • Charitable giving as a percent of GDP is and has been constant(ish) since it has been measured
  • There are more nonprofits than ever before and that number is increasing
  • The pie of charitable giving is expanding and not as a much as the number of nonprofits are expanding. Thus, the average nonprofit’s funding will be going down
  • The number of households donating has declined 7% over the past decade
  • The amount given by the average household is on a decade-long slide from $1024 in 2005 to $872 in 2015
  • Revenue is down 4% and donors are down 5% year-over-year through Q3

Acquisition

  • Households have decreased in their willingness to give to new organizations
  • New donors to organizations are down 14% year-over-year through Q3

Retention

  • Retention through Q3 is down 1.9% year-over-year (at 33%)
  • Retention of new donors to organizations is down 33% year-over-year through Q3
  • Fewer than 18% of new donors will make a second gift the next year
  • Donor reactivation has fallen every year for the past four years
  • All of this might be salvageable if large donations were increasing, but $1000+ gifts are falling by 8%

I’d love to hear stories of folks who are bucking these trends to restore my optimism. (Giving Tuesday stories need not apply – while it’s great to get the donations, I’m not certain that the sector needs more transactional giving.)

I’ll make a prediction in advance – we won’t hear a story that involves communicating in the same way to a transaction-based segmentation of donors. The success stories I’m seeing are those that are looking at new ways of giving (e.g., multigift programs, designated or quasi-designated giving, etc.) and aggressive donorcentricity beyond a “you” focus (e.g., building around donor feedback, capturing and using donor identity, accommodating donor preferences, abandoning a volume-based business models).

Agree? Disagree? What are you seeing?

Sources: Blackbaud’s Vital Signs report, Fundraising Effectiveness Project reports, and the Generousity for Life Generosity Reports

Facebooktwitterlinkedinmail