The Latest Wake-up Call

July 7, 2008

At the very time when the stock market is dropping, unemployment is rising and fundraisers are attempting to read the tea leaves in preparation for next year’s budgets, Target Analytics has released their Index of National Fundraising Performance for the 1st Quarter of 2008 … and the picture ain’t pretty.

Not only did the number of direct response donors continue to decline, but, for the first time, the increases in revenue per donor that have compensated for the decline in number of donors failed to prevent an overall revenue drop.

The Index’s authors say the falling donor populations “may be due to a mix of factors including economic changes, a changing generational profile in the United States, changing attitudes of donors about giving, and a change in focus by fundraisers toward higher-dollar donors.

Whatever the reasons the numbers are a bit spooky:

·The number of new donors has declined 7.6 % over the past two years. (However, the rate of decline has slowed from 5.3% in the first quarter last year to 2.3% in this first quarter of 2008.)

·Retention rates continued to fall with first-year donor retention dropping 6.6% in Q1 2008 over the same quarter a year before.
·And reactivation rates declined 5.0% from Q1 2007 to Q1 2008.

Among the 72 organizations included in the Index only those in the environmental and animal welfare sectors escaped the pain. For advocacy groups (what Target Analytics calls the “Societal Benefit Sector) there is sunshine among the clouds. New donor growth rose 6.1% in Q1 2008 with 69% of the organizations in this sector showing positive donor growth.

The news wasn’t as encouraging for groups in the International Relief Sector where new donor acquisition declined 23%–the greatest decrease of any sector –and reactivation rates were down significantly as well, falling 21.6% from Q1 2007 to Q1 2008.

And we shouldn’t be looking for clear skies and a return to growth in the near-term future. As the economy slows, so does giving.

Now’s the time to take another look at next year’s budget and make sure you’re spending more, not less, to achieve on donor satisfaction and loyalty to hold on to your base.

Roger

 

Posted by rcraver | Filed Under Don't Miss these Posts, Hot Research, Measuring Up, advocacy, charities, demographic trends, direct mail, donor retention, fundraising, loyalty, nonprofit management, nonprofits, research | Leave a Comment 

The Internet And Consumer Choice

July 2, 2008

The Pew Internet Project recently released The Internet and Consumer Choice, a report on how online Americans use the internet to help inform purchases they make.

Unfortunately, the study didn’t look specifically at decisions regarding donations (are you listening Pew?!), but it still yields useful insights to nonprofits seeking to raise funds online.

Some takeaways from studying purchases of music, cell phones, and new housing:

  • Among all consumers, percent who use the internet in product research — music, 56%; cell phone, 39%; real estate, 49%
  • Among consumers who use internet to research purchase, percent who said online information had a major impact on purchase decision — music, 12%; cell phone, 27%; real estate, 23%
  • Among all consumers, percent who made the purchase online — music, 22%; cell phone, 12%; real estate, n/a

As Pew interprets it, for most consumers internet searching is simply one of many tools they use to assist their overall shopping experience … narrowing choices and equipping themselves to get better prices. Large-scale displacement of retail sales has yet to occur.

By comparison, in The Agitator’s 2008 DonorTrends Survey, 58% of donors say they research a nonprofit online before making a contribution (14% frequently, 44% occasionally). And 33% say they have donated online to a charity or advocacy group. These results suggest a smaller "gap" between researching donations and closing the sale online, compared to consumer purchases.

Tom

Posted by tbelford | Filed Under Hot Research, online fundraising | Leave a Comment 

Boomer Gloom Affecting Fundraising?

June 27, 2008

Have The Agitator and DonorTrends discovered the Fundraising Rosetta Stone … demystifing the real reason behind falling acquision and retention rates and other recent fundraising plagues? We think so.

In reporting our 2005 DonorTrends survey three years ago, we noted that Boomers had climbed to the top of the donor heap, surpassing Seniors (born before 1946) and Post-Boomers (born after 1964) in average annual contributions. In 2005, Boomers on average contributed $1361 over a 12 month period; Seniors — the traditional bedrock of giving — donated $1138, while the younger generations brought up the rear with $791.

Might this be the beginning of a "Golden Age" of Boomer giving we asked. Well, as it turns out … not quite.

In our recently completed and soon-to-be-released 2008 DonorTrends Survey, Boomers fell to the bottom of the heap — Seniors reclaimed first place, averaging $1542 in donations in the past 12 months, Newbies (our term for the Post-Boomers) jumped up to $1205 in donations (a percentage increase of 52%!), and Boomers fell to $1081.

What happened to the Boomers?

A new "must read" report by Pew Research, called The Gloomiest Generation, suggests the answer.

As it turns out, compared to both their predecessors and their successor generation, Boomers actually have the least optimistic view of both their current and future economic situation, even though in real terms they are the most prosperous. For example, Boomers give their overall quality of life a lower rating than other generations; they are more likely to worry that their incomes won’t keep up with inflation; they believe more than others that it is harder to get ahead now than it was 10 years ago; they are less likely to say their standard of living exceeds the one their parents had when their parents were the age Boomers are now; and not surprisingly then … Boomers are more anxious than other Americans that they will have to cut household spending in the coming year because money is tight.

This adds up to a pretty gloomy head trip! Might it cause a more conservative approach to donating — even a retrenchment? In our opinion…Absolutely.

Pew suggests a few possible reasons for Boomer gloom.They note that substantial percentages of Boomers are in a "sandwich" phase of life — many are financially supporting their parents, their own children in the home, as well as adult children outside the home — at the very time they are beginning to contemplate retirement and living on fixed incomes. Also, Pew finds seven-in-ten Boomers dissatisfied with the direction in which the country is going, a worse assessment than other generations. The DonorTrends 2008 Survey, to be reported fully soon, probes Boomers’ issue attitudes in detail and finds the same concerns.

But taking their gloom into account, and noting the fall-off in their average giving, we still need to remind ourselves that Boomers numerically dominate the donor universe … so target them we must!

Fundraising Implications Today and Tomorrow. Make no mistake. When the largest and most wealthy generation of donors is in a near-Prozac stage and scared to death of their financial future in a society they perceive is going to the dogs, it’s not good news for fundraisers.

Acquisition suffers because they’re reluctant to make new commitments. Retention suffers because the generally skeptical nature of Boomer generation is turbo charged by fear of the future … and perhaps the perception that the world’s problems are getting solved after all, despite Boomers’ original idealism. In short, they’re skittish, disappointed, and they bail far more quickly than either the Seniors or the Newbies. Is it any wonder acquisition and retention rates for many organizations hit the downward skids at the same time the Boomer generation succeeded the blindly-loyal Seniors as the majority of America’s donors?

And rising gas prices, food prices, and health care costs merely exacerbate the giving malaise.

In short, fasten your fundraising seat belts! This is about more than a temporary economic downturn.

Roger and Tom

P.S. In the DonorTrends 2008 Survey on Generational Giving, available shortly, we’ll set forth actionable recommendations on how to survive and thrive in this sea of depression afflicting America’s largest group of donors. Meanwhile, download the Pew report and stay tuned to The Agitator. Roger & Tom

Posted by tbelford | Filed Under Boomers, Don't Miss these Posts, DonorTrends, Hot Research, demographic trends, fundraising | Leave a Comment 

Want 50% Lift In Email Conversions?

June 24, 2008

Then read this excellent case study provided by Marketing Sherpa. But you must read by June 24 unless you’re a subscriber.

In this example, a travel destination raised its conversion rates on marketing emails by 50% by embedding a brief video that automatically played when the email was opened.

If you missed the deadline, here’s the bottomline: Test everything in advance.

They tested:

  • The video content itself (what was most compelling?)
  • The optimal video length (from the perspective of being accepted by the filters of the major email clients)
  • Email subject lines (putting the word "video" in the subject line performed best.

I wonder how many online marketers in the nonprofit space are this meticulous?

Tom

Posted by tbelford | Filed Under Hot Research, email marketing, online fundraising, online video | 1 Comment 

Campaign 2008 And The Internet

June 19, 2008

If you are a fundraiser or communicator for an advocacy group, here’s another "must read" report from the Pew Internet & American Life Project.

As they summarize:

Fully 46% of all Americans have used the internet, email or cell phone text messaging to get news about the campaign, share their views and mobilize others.

Further, the proportion of Americans going online on a typical day at the tail end of the primary season to get political news or information has more than doubled since a comparable point in the 2004 race-from 8% of all adults in spring 2004 to 17% of all adults in spring 2008.

Pew’s recent poll found, among other things, that younger voters are among the most active and intense internet users. These online voters are more likely to support Obama.

Three online activities have become especially prominent as the presidential primary campaigns have progressed:

First, 35% of Americans say they have watched online political videos - a figure that nearly triples the reading the Pew Internet Project got in the 2004 race.

Second, 10% say they have used social networking sites such as Facebook or MySpace to gather information or become involved. This is particularly popular with younger voters: Two-thirds of internet users under the age of 30 have a social networking profile, and half of these use social networking sites to get or share information about politics or the campaigns.

Third, 6% of Americans have made political contributions online, compared with 2% who did that during the entire 2004 campaign.

A significant number of voters are also using the internet to gain access to campaign events and primary documents. Some 39% of online Americans have used the internet to access "unfiltered" campaign materials, which includes video of candidate debates, speeches and announcements, as well as position papers and speech transcripts.

Get the full report here.

Where online politics goes, so follows online advocacy.

Tom

Posted by tbelford | Filed Under Hot Research, issue fundraising, online advocacy, online fundraising, pew internet project, research | Leave a Comment 

Improving Your “Store Experience”

May 23, 2008

I just came across this study conducted by the IBM Institute for Business Value of customer "Advocates" in the retail setting.

For this consumer study, "Advocates" were defined as meeting three criteria:

  • they recommend their retailer to their friends and family;
  • they would increase their purchase amount if their retailer offered products found at other stores; and,
  • they would stay with their retailer even if another retailer offered a competitive product.

Now, wouldn’t we all like donors who met those critieria?!

As you would expect, customers who are Advocates (as opposed to Apathetics or Antagonists) are far and away the most valuable in profitability terms.

In the retail setting, the factors that induce customers to become Advocates are, in order of importance:

  • Store experience — the critical tangibles and intangibles that make it pleasant, enjoyable and easy to shop, triggering a variety of positive emotions along the way (this factor is by far the most important, and is also the strongest determinant of customer Antagonists!)
  • Convenience
  • Assortment
  • Quality
  • Customer service (personally, I’m surprised this didn’t rank higher)
  • Multichannel
  • Product availability

Importantly, the study notes that simply "meeting expectations" (e.g., with respect to attractive pricing) does not guarantee Advocates; it is the price of entry. 78% of all customers say their primary retailer meets their expectations, but across all retailers studied, the average percentage of customer Advocates was by comparison only 21% … and the highest was Wegmans at 53%. Other leaders by segment were Nordstrom (large-format apparel, 28%), Costco pharmacies (pharmacies, 27%), Barnesandnoble.com (online retailers, 27%), and The Children’s Place (mall-based specialty, 22%).

Can we apply the "Store Experience" concept to nonprofits and their donors?

Certainly it should apply pretty readily to "bricks & mortar" nonprofits — museums, theaters, hospitals, schools and others with a physical embodiment that donors can experience (or, in many cases, such as service agencies, observe).

It gets a lot harder for nonprofits dealing in intangibles, like policy advocacy, or remote impacts, like international disaster relief or medical research. In those cases, progress and results can be reported … and maybe even visually depicted. But the donor has little "experience" of the organization itself other than in the sense of customer experience (do they thank me for my contribution, correct my address, take me off their telemarketing list?).

This is one of the reasons I’m such a fan of online video. This medium does at least permit the donor to virtually "experience" their nonprofit’s leaders and "see" programs in action. And certainly a nonprofit’s website creates a virtual world that can communicate a personality or ambiance, and be more welcoming and enjoyable to use (or not).

Any other ideas out there as to how a nonprofit can enhance its "Store Experience?"

Tom

Posted by tbelford | Filed Under Don't Miss these Posts, Hot Research, branding, donor retention | Leave a Comment 

Test Your Donation Landing Pages

May 19, 2008

Guest Agitator Nick Allen of Donordigital shares some online research generated with Amnesty International.

The project tried to isolate variables that significantly improved the fundraising conversion effectiveness of website "donate" pages.

Here’s Nick’s summary of key findings:

  • Bigger donate buttons helped convert more donors;
  • Vividly colored donation buttons had varying levels of impact on donation page conversion;
  • Removing unnecessary fields from personal information forms significantly increased conversion;
  • Polite header copy yielded better conversion than a more forceful call-to-action.

And here is the full research report.

Our takeaway … we’ve barely in the infancy of isolating the technique and tactical variables that might positively influence online fundraising results on a consistent basis. As Nick’s full report describes, even the same technique — e.g., using bright red "Submit" buttons — produced opposite results in different configurations of the tested pages.

Our advice … read all the online testing data you can get your hands on.

Then design your own tests, starting with attempting to validate in your unique context the most consistent results reported elsewhere. Move from there to testing variables that might be more uniquely relevant for your situation. Always be very clear about the marketing hypothesis you are testing.

And test, test, test!

Tom

Posted by tbelford | Filed Under Hot Research, online fundraising | Leave a Comment 

March To Online Video Continues

May 13, 2008

From ComScore, here are the latest figures re online video viewing. In the month of March:

  • 73.7 percent of the total U.S. Internet audience viewed online video, averaging 83 videos per viewer.
  • 84.8 million viewers watched 4.3 billion videos on YouTube.com (50.4 videos per viewer).
  • 47.7 million viewers watched 400 million videos on MySpace.com (8.4 videos per viewer).
  • The average online video duration was 2.8 minutes.
  • The average online video viewer watched 235 minutes of video.

According to The Agitator’s recent DonorTrends survey, 40% of post-Boomers, 32% of Boomers, and even 25% of pre-Boomers report having watched an online video from a charity or cause. What’s your nonprofit doing to capitalize upon this adoption trend?

Tom

Posted by tbelford | Filed Under Boomers, DonorTrends, Hot Research, online advocacy, online fundraising, online video | Leave a Comment 

Logos On The Left, Please

May 2, 2008

I wish I had more time to read research on brain functioning. I just love this stuff!

Here’s a piece on how the brain processes images, and what the implications are for effective design of ads, etc.

Turns out that images are processed mostly by the right frontal lobe, which gets its input from the left eye.The left frontal lobe specializes in numbers and text, perceived more through the right eye.

Based on its studies of brain hard wiring, NeuroFocus, a "neuromarketing research" firm, has devised a set of marketing best practices. Among the lessons … logos andimages on the left, numbers on the right.

What do you think? Do you buy this stuff? For a trip to the mental edge, visit the NeuroFocus website.

Sort of makes focus groups seem so old-fashioned!

Tom

Posted by tbelford | Filed Under Hot Research, communications | 1 Comment 

Online Marketing Benchmark Study

April 17, 2008

More great data from Convio, compiled from more than 400 nonprofits and millions of online interactions and transactions.

Report looks at seven areas:

  • Website traffic — up 34% for groups with more than 250,000 email addresses
  • Registration rates — 3% of unique visitors convert
  • Email file size — Convio clients grew 32% over previous year
  • Online revenue — grew 25% (including eCommerce), average gift = $60
  • Email appeals — open rates, click-through rates, response rates
  • Email newsletters — open and click-through rates
  • Legislative advocacy — 8.5% of online advocates also donate

The data is great. Exec summary here for anyone. And check out Vinay Bhagat’s video presentation.

Tom

Posted by tbelford | Filed Under Don't Miss these Posts, Hot Research, Uncategorized, email marketing, online advocacy, online fundraising | Leave a Comment 

Next Page »