If the recession’s changed the game, you just need a new game plan!
Howard Lake | 24 November 2008 | Blogs
Yes, it’s a fact. When the economy hits the rocks, so does donor acquisition.
Whilst recent articles provide conflicting estimates of the extent to which fundraising is being damaged, it’s time to remember that giving to charity (or rather making fresh commitments to give to charity) act, according to economists’ definitions, as a luxury purchase. In other words a 1% positive or negative change in disposable income is met by a greater than 1% change in charitable giving.
This is backed up by long-range econometric analyses in both the UK and Australia, which show almost perfect correlations between charitable giving and macroeconomic indicators.
So what can you do? Find a cave and curl up until it’s all over? Accept that your results will be down and soldier on regardless? No! You need a new dashboard – one that will allow you to monitor the things that will enable you to negate or even overcome the downward trend in giving or donor recruitment.
When times are good, non-profit marketers pump money into advertising and promotion and watch the support roll in. The main focus is on optimising the cost-effectiveness of recruitment channels, usually measured by cost-per-enquiry or response rates.
The emphasis is on getting more and more people into the top of the acquisition ‘funnel’ and leaving the rest of the organisation (usually admin folks) to convert and bed down the proportion of prospects that eventually become regular givers.
So, if times are tough and the number of prospects to throw in the top of your funnel is dramatically reduced, there’s only one thing to do – widen the funnel so that more folks make it to the bottom.
This means that marketers need to turn their attention toward the many steps in the process of turning vaguely interested prospects into committed givers.
I was recently reviewing the marketing effectiveness of one of our offices in Europe who had witnessed a 25% drop in enquiries since their economy went through the floor. We sat down and looked at every step in their enquiry conversion process and identified simple steps that could be taken to increase their conversion rate, which stood at only 50%. If we could push this to 67%, we could more than offset the reduction in enquiries.
What sort of things am I talking about? Here’s a few things that should be on your new dashboard:
Improving the visitor to conversion ratio (VCR) of your website. Don’t be content with what you have. Test the site’s usability, make the processes easier and the content more persuasive. And plot the weekly improvements in the VCR on a big graph on the wall.
Reducing the abandon rate of inbound calls. What proportion of enquiry calls ever get answered? 80%? That’s every fifth prospect lost! Let’s remember that people who are contacting us in difficult economic times are much better prospects than ‘fair-weather donors’. If you are using external call handlers, crawl all over their daily statistics until the abandon rate goes down.
Improving the contact rate of outbound telephone operators. How many people who express an interest in supporting you are actually contacted by your follow-up staff or agency? I’ll bet that maybe two calls are made to that person and if they are not contacted then their details are discarded in favour of fresh prospects. I’ll also bet that the attempt to contact the majority of enquirers is not made at the time of day or day of the week that they contacted you. In my European example, one third of all enquiries were received in the evening, and people left their contact details on an answering machine. Our office picked them up in the morning and called them during the day – while they were most likely at work, on another phone number.
Increase the value of every ‘sale’ – at the point of sale. Many of us promote a fixed price proposition, such as child sponsorship. This ignores the concept of the price-elasticity of demand – the fact that some people would only be comfortable with paying less than our asking price, whilst other would be more than willing to pay more – if only we asked them. Therefore our price proposition should be scalable, either through flexible pricing or up-sell, down-sell or cross-sell ‘product’ offerings.
I could go on…
But I challenge you to look at your overall process. I’ll bet you a sticky bun that there is more than enough slack in there to overcome the decrease in demand. If you can tighten things up, you can buck the trend – and be more effective than ever when the economy eventually turns around.
Andrew Barnes is Senior Marketing Advisor for World Vision in Europe, having previously been head of marketing for World Vision both in Australia and the UK.
About Howard Lake
Howard Lake is consultant editor of UK Fundraising. He founded the site in 1994 and successfully sold it in 2022. As director of Giving X Ltd he is exploring growing giving on a massive scale.
He is the founder of Fundraising Camp and co-founder of GoodJobs.