The math of opt-in nudging

October 20, 2016

Post by: Nick Ellinger


We have a new white paper here about how to get people to opt in here. It’s great; I strongly recommend it.

There’s a section talking about why to get people to opt-in, from regulatory pressures to response rates to decreased costs.

But there is always someone within an organization who is incapable of seeing past the next day not just the long-term, but past the next day. (I’m told this person is often a CFO, but I’ve lived a charmed existence in that regard.)

So how do you justify investment of time and treasure to get people to opt in, whether that’s capturing a constituent on your website or getting a better view into their communication preferences?

Consider how much you would have paid for the same information on the open market.

For example, right now, it can cost $.10 to $.30 per record to get an e-append to your file through a commercial vendor. Thus, that is the floor of the value of an email address to you. It is certainly not the entire value of an email address to you – that you can get with calculations of lifetime value based on the value of email addresses already on your file and extrapolating.

But this short-term thinker may not sit still for even a 12-month payback period, so justifying based on marketing pricing may appeal more to your Excel jockey.

So let’s say you would pay $.20 based on the volume of your file. Now, every change you make that garners additional email addresses should take credit for an additional $.20 per name – that’s a name you aren’t going to have to pay for.

And it will certainly be worth more than what you would buy – an opt-in with an email address is far more valuable than the person who may or may not enjoy the online channel but is there because you appended her/him.

Similarly, getting someone to opt in online who is new to your organization has to be worth at least the $1.50 that an organization like Care2 would charge to bring you an online advocate and opt-in. And your homegrown opt-in-er would also be more valuable than a third party acquired name who may enjoy taking petitions more than donating to non-profits.

Plus, the external email address you will get is just the email – you have the opportunity to ask someone to engage through other channels each one of which makes the person more valuable and would be more valuable if purchased through the market.

So let’s say your site gets one million visitors per year and your content marketing and behavioral-based opt-in strategies can increase your conversions to constituents by one percentage point. Those efforts will be worth 10,000 constituents and at least $15,000 extra in revenues (or saved costs).

This type of mail also works for offline constituents. Getting someone to opt-in to postal mail from an online form is worth far more than the six cents or so it takes to do a postal address append. And think what you spend for outside lists. Each name costs eight to ten cents per to rent and that gets you the ability to mail it only once.

If you get someone new to opt in to mail as a channel, you are able to mail that person much more often and will get more revenues from them. But that may be too long-term for some folks, so even the cost that you would pay to mail a person can serve as the proof point they need.

There are also the saved costs from an opt-out. You could be spending $5 per year to mail a donor with no responses if you don’t know they don’t engage with that channel. If you can get that person to tell you what they want and take control over their communications, you are able to subtract the costs of non-performing channels and still get their gifts – an ideal trade-off.

Of course, the net revenues that lay beyond day one this are much greater. As we discuss in the opt in white paper, we’ve seen one nonprofit who used an opt-in program to get people to pledge four gifts throughout the year with a response rate of seven percent and cost to raise a dollar of $.23 – both significantly better than traditional one-time gift asks that didn’t include donor control.

But not everyone has that vision to see the long-term of someone giving you permission to engage with them in a particular way or set of ways. And you are unlikely to change them with your pitch. So for them, try these tactics above (and use small words – it helps).


What happens if you listen to your donors TOO POORLY

October 18, 2016

Post by: Nick Ellinger


img_5403sLet me get this out of the way first: I’m a Jeff Brooks fan. I grew up in direct marketing with his Fundraising is Beautiful podcast* and Future Fundraising Now blog. I’ll always remember my first blog post where I said to my wife that Jeff Brooks linked to me in the same tone of voice that a tween girl thinks that Justin Bieber looked RIGHT AT HER! And I also have an oft-read copy of The Fundraiser’s Guide to Irresistible Communications, as you can see at right. It’s definitely from today.

(I don’t yet have How to Turn Your Words Into Money, but it’s on my Amazon Wish List, for those who were wondering what to get me for Christmas.)

But I must speak out on his Friday blog post, where he posited, along with Virtuous blog, that Walmart had gone astray to the tune of $1.85 billion because it listened to its customers too much.

The story goes that Walmart listened to customers who said they wanted less cluttered shelves, so they did that in Project Impact and lost money.  From this, the alleged lesson is that Walmart listened to its customers too much and, likewise, we shouldn’t listen to our donors when they tell us what they want.  To quote from Jeff’s piece:

“Ask them what they want, and they’ll give you all kinds of terrible advice. They want to hear from you once a year. They don’t need emotional stories or suggested ask amounts. They don’t want long messages or emotional photos. They tell you they’ll donate more if you don’t do those things.”

Here’s where I differ: these are not examples of listening to donors too much.  These are examples of listening to donors too poorly.

Let’s take the Walmart example for a moment.  There are three cardinal sins in the research that Walmart seems to have done here:

1. They got target fixation. Or, in this case, Target fixation. Here are the stock changes for the five years preceding the decision to declutter shelves.

TGT is Target.  During this time Target was growing significantly compared to Walmart.  So Walmart had the idea “hey, let’s be more like Target” and they tested that, rather than listening to what their customer said.  Good Experience puts it well in their blog post on this:

“The mistake was a lack of customer focus. I know, I know: “They ran a survey! Customers loved the idea!” But that’s exactly the problem. Walmart didn’t pursue the question of what customers wanted. Instead, Walmart came up with the answer first, then asked customers to agree to it. That’s exactly the wrong thing to do, because it ignores customers while attempting to fool stakeholders into thinking that the strategy is customer-centered.”

With nonprofits, this can often happen with new leadership.  People will come in and say “we need to change things up and be more like X,” whether X organization is anything like your organization or not.  Then surveys are done with that conclusion in mind.  As a result…

2. They surveyed for the wrong thing. I have not seen the surveys on this, so I can only guess based on the reporting.  But it sounds like they asked whether people would like it if they would declutter the aisles and shelves.

What they should have done is looked at shoppers’ commitment to shopping there and the amounts they spend, then also asked what people’s ratings are for various aspects of their customer experience.  From there, you can use statistical methodology to determine what actually drives commitment and behavior.  That’s what we do with our commitment studies.  It’s the way of getting results that matter, without…

3. Pony thinking. There’s probably a technical term for this, but what I mean here is if you ask an eight-year-old whether she wants a pony or not, she will likely say yes.  If you pair this with the question “How committed are you to cleaning up large piles of poop for the rest of your life?”, that goes down significantly.

Likewise, if you have a survey audience or, worse, a focus group and ask them if they want less cluttered aisles, they will say yes.  The survey recipient doesn’t know the trade-offs that go on.

But for Walmart, “less cluttered shelves” also equals “fewer items you may want to buy.”  You can’t survey one without the other.  There is a story, perhaps apocryphal, about a Walmart executive bringing two bags of groceries into a board meeting that she bought at another chain supermarket because she could no longer get them at Walmart.

By the end, Walmart had presentations like this one that had “less inventory” as an end itself, rather than as a means to achieve greater satisfaction.  “Great selection” isn’t in there.  So the person who made less cluttered shelves and made the Walmart executive shop at another store was doing what they were given incentives to do.

And for nonprofits, if you look at traditional surveys, people will say they want fewer communications and more information on the impact of their donations.  These often oppose each other.  If you look just at taking away communications, without making sure you are connecting better with the communications you do have, you will likely experience loss.

But if you do what several nonprofits have started to do now (e.g., Union of Concerned Scientists) where you announce that you are decreasing communications based on their feedback, ask for additional feedback, and make each piece more focused on the donor, you will hit your year one goals and be raising more money in year two, free of the volume rat race.

There are plenty good examples of bad surveys – Kevin has done a great piece on what surveys work when and how here.  And if you take the data from those surveys (e.g., people saying they only want happy stories), you are going to get bad results, just like Jeff says.

However, the problem isn’t that we are listening to the donor; it’s that we are doing it poorly.  Using any test results where people are asked to compare pieces like DonorVoice’s multi-test tool, you can measure both conscious and subconscious cues, getting to a deeper understanding of the donor and what makes them tick.

So, I greatly respect Jeff, but the very title and idea of Jeff’s post – “What happens if you listen to your donors TOO MUCH” – is actually the opposite.  We think we know donors from one line on a survey (or less!) when we should be listening to them more, more correctly, and more deeply.


* I also applaud the choice of Holst’s The Planets for its theme song; although I prefer Mars to Jupiter, the latter is a more effective podcast theme song.

** A funny post-script: as I was writing this, the New York Times posted a piece about the new Walmart.  They are paying their employees more and giving them the ability to rise through the ranks.  They are also receiving more training on customer service.  Survey results on “clean, fast, friendly” scores have increased for 90 consecutive weeks and sales are up 2% over the general merchandising average.  Profits are down six percent because of these labor costs and other investments, but my guess is that Walmart is playing a longer game to try to retain their customers.


New free science of opt-in white paper

October 17, 2016

Post by: Nick Ellinger


We have a new white paper out on the science of getting people to opt-in. The resources include:

– Trends in opt-in only marketing
– Why opted-in donors and constituents are more valuable.
– How lessons from organ donation programs can increase your opt-in rates.
– Why opting in isn’t just for online communications.
– Nudge techniques to make people want to opt-in.

And much more. You can download the white paper here. Please let us know what you think!


Using your real estate better on confirmation pages

October 13, 2016

Post by: Nick Ellinger


Back in April, I wrote a series on using your real estate better, including tips on reply devices, preheaders, online images, and more.

As I’ve been secret shopping nonprofits, I’ve noticed one more in need of real estate improvement: the humble confirmation page.

Whether it’s after a donation or a newsletter sign-up or an advocacy alert, most often these pages simply confirm that a transaction has occurred with no other interaction and no other ask.

Or you will have confirmation pages with laundry lists of possible actions that jumble together: like-us-on-Facebook-follow-us-on-Twitter-donate-volunteer-share-your-story-make-your-gift-monthly-sign-up-for-our-newsletter-etc-cetera.

To this one, I would say that asks are like NFL quarterbacks: if you think you have four of them, you have none that are going to be effective.

What these pages are excellent for is continuing a conversation. A person has just taken the next step in a relationship with you – how do you repay this and create additional value for them? Sure, you can make another ask or another engagement, but here are a few ideas for getting deeper insights about your donors:

Ask for feedback. As I talked about a few weeks ago, you can barely move about the for-profit world without being solicited for your feedback. Most of us assume that because a transaction is done, it went well. That’s often not the case. Take a nonprofit we’ve worked with to gather feedback. As you can see below, getting feedback and acting on it made their donors satisfaction with their donation skyrocket.


If you need help with this, DonorVoice has a free widget for gathering online feedback. It won’t get you insights as robust as our multichannel feedback tools, but it’s free and will get you started collecting feedback.

Ask why they gave (or signed up). Not only will you learn things in this free response that you will be able to use to get a better idea of your constituents, but you will also reinforce why the person gave, since we believe reasons that are easily available.

One study looked at course evaluations for college students and found that if they were asked to provide 10 examples of how the course could be done better, they rated the course almost 10% higher than students who were asked to provide two examples.

The idea is that two examples of why a course is bad are easy to come up with, but having to come up with 10 examples taxes the brain.

So asking for one reason your organization is good reinforces their giving.

Ask an identity question. Most organizations will have multiple types of donors. For disease organizations, there’s a significant difference in the motivations for and messages to people who have the disease or have a loved one who has the disease and those who are concerned citizens looking to help, but don’t have the same cause connection. For animal welfare agencies, it may be cat people versus dog people. One organization we work with has bird enthusiasts versus nature enthusiasts.

These top-line identities are things that are specific to the person, relatively unchanging, and make a difference in terms of the value, commitment, and/or messaging for that donor. And since they make a big difference, you need to know them as soon as you can – perhaps on the confirmation page.

Ask for preferences. These can be channel preferences (mail, email, phone, text, etc.). In fact, in our recent opt-in webinar, we covered how this is the type of control donors most want. These can be frequency preferences. Or they can be about the types of communications that a person wants to receive – advocacy versus newsletter versus volunteer opportunities versus program materials and so on.

You are going to want to know all of these about your constituents; the earlier you get this information, the more likely to are to retain and maximize these donors.

In fact, you might even be able to try all of these – just not simultaneously. The trick is to ask one question at a time in a series of microconversions. Generally, people’s most favorite topic is themselves, so asking for feedback doesn’t hurt. Then, a willingness to start answering these questions leads to a desire to keep answering them because of consistency and commitment.

But the key thing is to start asking one of them – any information is better than no information. We hope we’ve helped you better use your real estate; let me know if you have any questions at


Why I was wrong on mail quantity

October 6, 2016

Post by: Nick Ellinger


Once upon a time (OK, it was back in May; time moves pretty fast in the direct marketing world), I wrote that quantity of mail volume is not the problem that some people thought it was.  Basically, if you had a magic box that you put $1 into and got $1.10 out of it, you should take that deal.

Yes, there were storm clouds on the horizon.  There was a study that I cited that said that increased donor mailings lead to increasing irritation among donors.  But that one seemed to say that people gave the same amount, regardless of whether they were irritated, so it passed.

Well, there’s some new research out and it turns out I was wrrrrrrrrrrrrrr….

I was wwwwwwrrrrrrrrrrr….

OK, I’ll just say it: I was wrrrr… not right.

The study that proved me wr… incorrect is here.  It was published in June so at least when I was … mistaken… I didn’t have access to the study.

The difference is that the study looks at how irritation affects the interrelationship among mail pieces.  After all, if you add a mail piece, you would already get some of the revenues from that piece, whether they would have come into the piece before, the piece after, online, in telemarketing, or what-have-you.

What I didn’t count on is how much of those revenues would have come in anyway.  The researchers found that each additional mailing generated 1.81 Euro in revenues, but that 1.21 Euros of that was cannibalized from future mailings.  Thus, only 37% of the revenues that are “new” when you add a mail piece are actually from that mail piece.

What are the implications of that?  I’ll let the authors tell the story:

“A charity maximizing its own revenues will stop mailing once the marginal additional revenues – the direct revenues minus revenues lost through cannibalization – exceed the costs of sending out the mailing. Cannibalization is estimated to be about 63%, so mailings are profitable for the charity as long as the costs are lower than 37% of the revenues.”

How many times in my career did I mail a piece where the costs exceeded 37% of revenues?  Probalby about half the time.  I was looking at marginal net revenue, which is a good measure, but I wasn’t testing the alternative – what do I get if I don’t mail the piece?

That cannibalization is massive.

But it is not the only reason I was wwwwwwrrrrr…  I mean, it’s not the only reason I had some flaws in my thinking.  The other is the long-term effects of irritation from mailings.  Another study found that donors who have increased frequency to direct mail have increased irritation, decreased goodwill, and decreases likelihood of giving, quarter over quarter.  Here again, I’ll let the researchers speak for themselves:

“[Donors] who donate frequently are less likely to donate in the near future.  These findings are not only stable over time, but also replicate across two large data sets.”

Between the fact that mail pieces rob from each other and the long-term negative implications of overmailing, it seems that it is wise to try to get mailings out of the mail stream when possible.  Here’s an area where my original post, while… mistaken in some aspects… has some good tips to reduce mail volume.

But another good way is to give donors what they want: control.  In our recent opt-in webinar (which is free and available here), Dr. Kiki Koutmeridou (and, to a far lesser extent, I) talked about how the most important behavioral science influencer on getting a supporter to actually opt-in is providing them with control.

This is not a slippery slope to a database of ‘only contact me once’ donors.  It turns out donors prefer being given channel control over the seemingly more direct route of number of contacts per year.  This results in flexibility for both charity and donor.

Getting the complete, evidence-based answer on volume is comforting.  But volume isn’t this is the end of the story; instead, it’s the starting point for the even bigger realization that merely fixing the volume problem is no solution at all.

You can get the rest of that story here and you can hear how the ‘rest of the story’ is playing out for charities who are in-market with pilots that go well beyond ‘sending less to make more” by signing up for our newsletter below.  And you can see an example of an in-market success in our multi-gift webinar.

Of course, if you are interested in testing out of the volume business, let us know – we’d love to help.

As long as you are OK getting advice from someone who was previously wrong.

There.  I said it.

Sign up for tips today!


Who benefits from your direct marketing?

September 29, 2016

Post by: Nick Ellinger


Lenny Briscoe of Law and Order fame would never have said cui bono.  He would have dismissed it as fancy lawyer talk with a quippy, world-weary one-liner.
But like every good investigator, he believed in cui bono, Latin for “who benefits?”.  The idea is that the person most likely to have committed a crime is the one who benefits from it.

I was put in mind of this when we here at DonorVoice got this email from Care2:

“You might be interested in a revenue sharing arrangement many of our agency partners enjoy.  Care2 works with hundreds of agencies and consultants around the world helping their clients connect with our 40 million members who are passionate about causes.

Because we value our partnership with these firms and the help they provide Care2 clients, we’ve developed a revenue sharing partnership.

Many Care2 agency partners are earning over $50,000 per year from Care2, all while doing what they do already, helping their clients connect with Care2 members to find amazing supporters and donors.”

I should state here I think Care2 has a valuable service.  I’ve never used it because of budget constraints, but I’m intrigued by the model.

And I don’t (necessarily) find this type of agreement to be unethical if disclosed.  But I’ve had Care2 recommended by vendors in the past without this disclosure. Now I wonder if they had this type of agreement in place.  And then it makes me wonder cui bono?  Was it recommended to me because it’s a good service or because the agency partner was getting more than $50,000 per year from Care2?

It makes one think of ugly words like “kickback.”

I was reminded of the time I had a vendor who accidentally put active donor names into a lapsed telemarketing program.  They got a payment for every call that was made.  When I saw the mistake and realized the people who made the mistake got paid for making the mistake, I suddenly put the appropriate scare quotes around “accidentally” and “mistake.”

It’s not to say it wasn’t an unintentional mistake.  I just have a rule about conspiracies: if the outcome of something is the same as it would have been had there been a conspiracy, then it really doesn’t matter if there was a conspiracy or not.

In our recent multi-gift webinar, Josh Whichard highlighted the volume model of fundraising:

  • We have 14% fewer donors but are only mailing 7% less mail
  • We are sending 49 emails per year on average, a new record
  • We are adding channels like social, online advertising, DRTV, mobile, etc.

And yet our retention rates and gifts per year are on average the same as they were a decade ago.  We are the hamsters on the wheel, exerting ever more effort to stay in the same place.

He also talked about a multi-gift program as one of many solutions to the flaws in the more-from-more model.  You can see a recording of the webinar here.

The bigger question I have is, as you might get, cui bono?  Who benefits from volume that doesn’t lead where it should or used to?

At a panel at DMANF DC, I asked a panel of list cooperative folks when they see diminishing marginal results – that is, how many organizations does a person have to give to to be less likely to give to the next one than they were the last.  That is, if someone gives to 25 organizations, are they as likely to give to the 26th as they were to the 25th?

The representative from the co-op said there wasn’t such a point: everyone who gives to another organization is always ever more likely to give to the next one.

This is mathematically impossible.

Somewhere on that co-op’s file is the person who gives to the most nonprofits – let’s say it’s 42 since that’s the answer to life, the universe, and everything.  Since they have never seen anyone give to 43, that would have to be the point of diminishing marginal returns.  It’s probably before then, but there (by definition) is a point.

In other words, the co-op’s answer is like saying people get healthier and healthier and healthier until the moment they die, when they are at the peak of their health.

Who benefits from that answer?  The person giving it.  Whether it is ignorance of diminishing marginal returns or a desire not to disclose what’s known, the result is the same – asking a co-op whether you should expand your work with a co-op is like asking a first-grade class who wants a pony.  Cui bono? The co-op.

How many different mail pieces should you send this year?  Ask the direct mail vendor with whom you contract on a per piece basis.  Cui bono?  The answer will be like when they asked Samuel Gompers what labor wants.  His answer?  “More.

What should your mix be of mail versus email versus phone?  I’m sure it’s coincidence that your mail vendor wants more mail, your email vendor wants more email, and your telemarketer wants more calling.  Cui bono?

And that’s how you get to a schedule of overlapping communications that may or may not be related or coordinated, with little knowledge of the donor beyond a wallet and an address.

Heck, if you use DonorVoice’s feedback tool, we benefit from it.  Hence, I benefit from the week of feedback blog post I did last week.  You likely have to take it with a grain of salt as a result (hopefully, it was powerful and persuasive even though I benefit from it).

I’ve gotten sage counsel from many a vendor over the years.  They’ve guided, advised, analyzed, and counseled.  I’m better for their advice.

But you might have a sneaky suspicion that the model that got you here isn’t the way to proceed from here.  When you have that feeling and people poo-poo your questioning, there’s one more question to ask:

Cui bono?


New free peer-to-peer webinars

September 28, 2016

Post by: Nick Ellinger


Please join us on Wednesday, October 19, for the second Peer-to-Peer World Virtual Conference!  DonorVoice and three other companies that serve nonprofits have come together to share our experience with and knowledge of peer-to-peer fundraising.  In one day, at no charge, you’ll learn how to:

  • Improve your donors’ experience
  • Modernize your approach to data
  • Raise more dollars
  • Select the P2P fundraising technology that’s right for you

Additionally, nonprofits will share their first-hand experiences improving their own P2P fundraising programs.

You can sign up for any or all of the sessions and join from the convenience of your own desk (or wherever you are). Registration is complimentary; it’s an event you won’t want to miss.

The DonorVoice session will be about how to increase retention, satisfaction, and funds raised by improving your donor experience. It will be great tips on getting and using feedback without breaking the bank. We guarantee it will be at least the fourth best session out of the four sessions. So please register today!