Raise More, Ask Less — Part 1
I’ve been around long enough to know the unmistakable squeal of conventional wisdom being challenged.
So, when my St. Patrick’s Day post — Are You Abusing Your Donors? — triggered a barrage of comments and protestations pro and con I knew some nerves had been struck. And it wasn’t because of leprechauns or green beer.
It was because I raised the question of whether we should reconsider, revise or evolve the direct response fundraising playbook rule that says, “The more you ask the more you raise”. To those who like their playbooks simple, I guess the question was unsettling. After all, a number of us veterans — myself included — have been preaching this at conferences, on blogs, and to our clients for at least a decade.
Are today’s “truisms” wrong?
Like most “truisms” in most trades, much of what we learn and preach will eventually be shown to be wrong or out of date. That’s why it’s so important, as Simone Joyaux noted in her comment to my post to think or re-think these truisms. In Simone’s words: “There’s thinking, not just rigid rules and no thinking.”
Those of us who’ve been preaching the old gospel of conventional wisdom shouldn’t get upset when challenged. It’s not that we’re ‘wrong’. But perhaps our sermons fail to take into account new evidence. More often than not, as seen in both the physical and behavioral sciences, a new theory will come along to build on the old and provide some better alternatives.
That’s why I want us to continue this conversation. There’s so much at stake. Clearly the conventional wisdom of ‘ask more, raise more’ ain’t all it’s cracked up to be. If it were, we’d have to accept, for example, a belief that today’s lousy retention rates are unrelated to the ‘stop sending so much stuff’ donor sentiment we all hear.
We need and deserve more than a from-the-podium chant that ‘People still respond to appeal number 18, 19, 20 or 25 don’t they?’ This is hardly a satisfactory answer to a fundamental question.
Among the comments I received after that St. Patrick’s Day post was a full-fledged white paper from Kevin Schulman of DonorVoice in response to the questions I raised. I hope you will download and read it carefully.
Kevin has gone to the time and trouble to raise some key questions that we should ask and attempt to answer in our discussions. He also provides data to help keep us out of the swamps of tribal wisdom and conjecture.
To whet your appetite for digging into this subject let’s begin with Kevin’s conclusion:
“‘Engagement’ and ‘donor centricity’ are empty, albeit well-intended, terms offered as an elixir to the problem of over-communication. An elixir that creates a false sense of progress or worse, accelerates the donor exit out the back door.”
Here’s why. The traditional example of proof for the ‘ask more, make more’ theory lies in this real life test example.
As seen in Table 1 the only difference is the number of appeals asking for money — 18 vs. 15 vs. 12. The data are clear: 18 beat 15 and 15 beat 12. Ask more, make more. Proof positive.
Not so fast! As Kevin notes in his paper: “Under current and conventional practices it is indeed the end of the story. The need to try and ‘make the number’ at the end of the year leads to the unchallenged practice that sending one more appeal nets more money. And vendors are more than happy to oblige in creating, producing and mailing one more appeal to meet the goal.”
And then another ‘truism’ comes into play: “Donors who give in more than one channel tend to give more.” Enter the multi-channel communication, and by extension, even more asking.
Kevin goes on to point out: “Because large charities have as many as 40, 50 or even 60 ‘asks’ a year and upwards of 100 or more when ‘no-ask’ touchpoints or ‘engagement’ touch points are added in, many CEOs and Boards and senior executives argue — with personal opinion and gut feeling as opposed to data — that “this feels like a lot, too much in fact”.
But what about ‘ask more, make more?’ Shouldn’t 50 asks beat 40 and 40 beat 30 just like 18 beats 15 and 15 beats 12?
Take a look at Kevin’s Table 2 and you’ll see what happens to the average revenue and net per appeal. Both go down a lot as the number of appeals increases. The net gain is just $1,169 per appeal from 15 to 18 appeals.
Kevin asks: “How can this be? The average per appeal in the 15 appeal test is almost $27,000. Why don’t we get an extra $81,000 ($27K * 3) with the three extra appeals?”
He answers with: “Because there are massive diminishing returns from every marketing or advertising effort. This is a direct marketing reality that is as true as 18 beating 15 and 15 beating 12.
Ask Less and Make More
Kevin goes on to show how the ‘mail more, make more’ theory can be applied more efficiently to the point of increasing net revenue by 20 to 30%. BUT … he argues that even by improving efficiency using the methods he suggests, an organization is still selling itself short.
Tomorrow we’ll explore: How to make more by asking less.
Let’s keep the discussion going. Your thoughts?