Old-fashioned, traditional organizations measure the efficiency of the organization’s own internal actions rather than the effectiveness of how the organization’s actions directed toward the donor actually affect donors’ attitudes.

A surprising number of fundraisers fail to understand a basic axiom of the organization-donor relationship: It is the actions an organization takes toward its donors (donor experience) that determines the attitude positively or negatively of the donor. In turn it is the donor’s attitude that determines the donor’s behavior toward the organization. (E.g. giving, volunteering, staying or leaving.)

For this reason donor experience metrics (loyalty/commitment/lifetime value), not organizational performance metrics (RFM, ROI, conversion rates) represent the GPS of metrics in terms of steering value where the future is concerned.

In short, if an organization is to become truly donor-centric, a new organizational model and set of metrics are required and must be brought to the fore. Out with the silo; in with a seamless structure that can deliver — and measure the delivery of — better donor experiences.

The reason old-fashioned organizations are generally broken into silos is that management is narrowly focused on efficiency. And, it’s far easier to measure ‘efficiency’ by silos or specialized function. (Direct mail, online, F-2-F, telemarketing.)

loveOn the other hand, the donor-centric organizations focus on pleasing, holding on to and upgrading the donor by providing experiences that make a difference to that donor — and by extension to that customer’s commitment and lifetime value to the organization.

Assuming this major cultural barrier can be overcome, just what should an organization be measuring if it wants to be considered truly donor-centric?

The answer, of course, involves focusing on metrics surrounding ‘donor experience’. Metrics that enable an organization to develop a deep understanding of its donors. What is important to them? What makes them satisfied? What do they consider an excellent experience?

Of course, there’s a big disincentive or barrier to making those changes. The current culture in most organizations favors pleasing the senior management rather than pleasing the donor. Almost without exception the senior management is focused on the ‘numbers’ of campaign and channel-oriented performance.

Assuming this major cultural barrier can be overcome, just what should an organization be measuring if it wants to be considered truly donor-centric?

We’ll visit a range of these donor experience metrics in the future, but for today let’s focus on one of the most talked about and least understood — donor satisfaction.

As a general rule, overall ‘satisfaction’ — the type that’s generally measured in most ‘donor surveys’ — is a weak indicator of donor attitude, preference and loyalty.

In a recent Harvard Business Review article, the authors cite data showing 20% of the ‘satisfied’ customers intended to leave the company in question; 28% of the ‘dissatisfied’ customers intended to stay. Analysis by Bain & Co. found between 60% and 80% of customers who defected scored themselves as ‘satisfied” or “very satisfied” on prior satisfaction surveys.

As Kevin Schulman, the CEO of DonorVoice, indicates in this must-read post “Don’t Measure Donor Satisfaction (it is a waste); Instead Measure and Act on Donor Experience”:

“The problem is not surveys and the often-wrong, never-in-doubt-crowd who trot out the well-worn diatribe that ‘people don’t do what they say’; except when they do…

“The problem is the measurement and approach, both flawed by the lack of a useful purpose or goal unless of course the goal is a trend line chart with high satisfaction scores that temporarily gets management off your back while producing no real business or ‘donor experience’ improvement.

“Even if overall satisfaction were a good predictor of future behavior there is another, more fundamental problem with it. What do you do with it? What is the action or change plan? Why are donors dissatisfied? How do you fix it? Overall donor satisfaction is way too generic and global to be useful for much of anything.

“It is akin to asking a consumer to rate the quality of healthcare. This is an amorphous, vague concept that needs to be deconstructed and broken down into the component parts of a healthcare provider visit. This might include:

The ability to research and find a doctor in network

The appointment setting process

The interaction with the front desk staff

The wait time

The clinical care provided by the nurse

The clinical care provided by the doctor

The bedside manner of both

The level of trust you have in the diagnosis

The quality of the explanation”

Kevin then goes on to indicate how ‘satisfaction’ should be specifically and effectively studied.

“What if you actually measured each of these interactions/touch points on a continuous basis?

“You’d quickly discover which interaction points were working well and less well and have a much more prescriptive ‘fix’ plan for the latter.

“Furthermore, for each customer who had a bad experience at a given step along the way you had a mitigation plan to ‘undo’ the negative effect of a bad experience.”

How does all this apply to the nonprofit organization?

Picking up on Kevin’s health care example, what is the comparable charity list of experiences? Kevin answers:

“It depends on the donor activity or experience we are evaluating. For example, for event experiences the list might look like this:

  • The usefulness of pre-event marketing materials
  • Ease of registration
  • Understanding of next steps, post registration
  • Ease of setting up fundraising page
  • Usefulness of event day information
  • Parking at event day
  • Logistics at event day
  • Actual event meeting expectations
  • Post event marketing usefulness/relevance
  • Etc…

What about the online donation experience?

  • Doing a search for charity x
  • Finding a donation page quickly/easily
  • Finding a donation page that matches the direct mail offer
  • Filling out the form
  • The confirmation page
  • The email confirmation
  • The thank you
  • Etc…

“Each of these reflects a set of steps a donor might encounter and form opinions along the way. If the experience is poor at any point the donor may simply abandon the effort. Or perhaps they still hit the final “donate” button but mentally commit to never do it again.

“Overall donor satisfaction as a global snapshot will never uncover this and even if it did it would provide no direction on what the heck to do with a low score.

“In fact, measuring it may do more harm than good in creating false comfort (since most scores will be relatively high) and spending money that yields no business value.

“Make no mistake, however, measuring the donor experience at these various interaction points and acting on it is one of the ways charities can actually grow.”

Changing from near total reliance on silo-driven performance metrics to donor experience metrics represents is a mindset shift for the sector. And, it’s not a matter of money or resources. It’s a matter of mindset change.

As Kevin notes: If we assign value to the experiences we deliver then we will apply resource to measure them, act on them and continuously improve them.”

In the next post we’ll explore the issue of ‘donor satisfaction’ in even more detail.

Meanwhile, what are you doing to determine how the experiences you’re offering are pleasing or displeasing your donors?

Roger

 

 

 

This article was posted in: Communications, Donor retention / loyalty / commitment, DonorTrends / DonorVoice, Fundraising analytics / data, Innovation, Nonprofit management.
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