The old saw was that nobody ever got fired for buying IBM.  Being part of the herd is a safe, comfortable place to be.

But back on Tuesday, we talked about zigging where others zag by avoiding year-end matches to increase revenues.  Now, there’s some concrete proof that doing what you’ve done before, and what others are doing, can hurt your results.  After all, the odds that you are working on an IBM right now are low.

The comfort zone of the donor is called their mental accounting, the idea that we earmark money for specific purposes.  You can spend money on anything. Economists call this “fungibility”, which has nothing to do with mushrooms and everything to do with the dollar bill in your pocket that can be used for rent or food or entertainment or whatever.

But one of the many areas where classical economic assumptions don’t square with reality is in this idea of fungibility. People have sophisticated mental jars of money earmarked for different purposes – that’s mental accounting. And we experience mental pain every time we take from one jar to compensate another.

Your donors think this way also.  Somewhere in their minds, there are mental Mason jars with “CHARITY” written on them.  There may even be several such jars: one for each organization they support.

So far, this sounds like it’s important not to change things.  After all, people who donate to a particular campaign are more likely to give to that campaign again the next year, especially when they are reminded that they gave to last year’s campaign. They have their mental jar ready for it.

However, that also means you can’t expand your audience.  Recent research shows that when someone expects that there’s another campaign to come, they lower their gifts substantially – by almost 40% in average gift.

So how do you break out?  It isn’t just by doing something different.  It’s by advertising it.  Researchers put up two sets of ads for the Alzheimer’s Association’s Walk to End Alzheimer’s.  Instead of talking about their walk as an annual event that happens every year (“Held annually for Alzheimer’s”), they talked about it as an event that only happens once per year (“Only once a year for Alzheimer’s”).

This latter framing is called an exceptional expense. Think of this as an “incidentals” budget.  This is a “what happens if my 2003 Saturn Ion chooses to give up the ghost today” contingency fund that we can dip into. (Yes I’m truly rollin’ like a G in this sweet ride.)

The hypothesis was that by framing the gift as “only once a year,” you could get people to break into that piggy bank.  And break they did.

People were more likely to donate to the exceptional expense (46% versus 35%). They were also willing to give more ($7.13 versus $4.82). When they tested this live, the exceptional expense ad had an 11% greater click-through rate.

They also tested this in the mail, where the following…

“This mailing is part of a special charity drive that happens only once a year. Alex’s Lemonade Stand is requesting only one donation a year going forward.”

outperformed  this…

“This mailing is part of a regular charity drive that happens annually. The charity is requesting a donation every year going forward.”

It is wonderful to be budgeted for by donors. And as you ask several times at the end of the year, you will likely get those budgeted gifts.

But you want to get the unbudgeted gifts too.  So, as you approach year end, is there anything you can do that is unique?

Nick

 

This article was posted in: Behavioral Science, Communications, Copywriting / creative, Research, Uncategorized.
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