The Direct Approach: Donor dilemma
By Mike Spicer, Arc Worldwide, campaignlive.co.uk, Friday, 06 October 2006 12:00AM
Charities face a choice in their quest to attract high-value donors. Do they pitch for the 'usual suspects' or a key 'brand' of giver, Mike Spicer asks.
Charity marketing is tough and it's getting tougher. To put this in perspective, there are at least ten charities actively campaigning for every cause.
In any business, an effective acquisition strategy is vital for survival. Charities need to acquire as many high-value donors as possible to cover costs and reach the necessary return on investment. Analysis, profiling and common sense tell us these people are older, more affluent and within a certain life stage. Market research tells us they prefer mail as a communication channel.
Armed with this imperative, predictive models are then built to zero in on these people - all very clever, all very DM. Now comes the $64,000 question: would a model to acquire cancer charity donors generate a radically different set of people to, say, a sick children's charity? One of the main reasons people give to a cause is that it is relevant to events in their own life. So how do you model having had a sick child? You can't.
Compounding this is the fact that charities appear to use a collection of "usual suspect" sources for prospect names. Take reciprocals: charities often create shared pools of donors, which they all dip into. Can you imagine Ford and Vauxhall playing swappies with their customer databases? So we've got the same models, picking the same people, then we communicate using the same channels.
The battleground for charities is therefore often in the creative. UK charities do world-class creative, but even superb creative can be drowned in the tidal wave of "asks". There are two net results for the people selected. Firstly, Ask Fatigue: "The world and his wife are trying to pull on my heart strings." Secondly, Channel Fatigue: "No more mail, please!" What do the charities achieve? No stand-out, no differentiation, and where is the engagement? The blend of art and science that was direct marketing is constricted. It has turned into a churning process as prosaic and formulaic as factory work.
Some charities, though, are becoming more sophisticated and are fighting their way out of this corner. Many are thinking innovatively about what the "ask" actually is - after all, one size certainly does not fit all. From our experience with Great Ormond Street Children's Hospital, it's also important to create messages that challenge the norm.
By differentiating themselves, these charities deliver cut-through to the traditional audience. But to reach new donors you also need to be channel savvy. An holistic view of all ask channels, and a willingness to test new channels to acquire and retain is critical. It's still about being in the right place at the right time, but now, rather than just hitting different audiences with relevant messages, you're providing them with their channel of choice.
Many charities now understand that people are interacting with brands in a more sophisticated way - look at Oxfam's testing of PayPal donations. You only have to look at the younger, transitory market, made up of people who have mobile numbers and e-mail addresses far longer than a traditional home address, to understand that we need to talk to them in their own media language.
For charities, this level of interaction means pro-active engagement, but people still need to know that their money is doing some good and is making a real quantifiable difference. Appearing wasteful is definitely a fast-track to donor disengagement; a glossy expensive-looking mailing pack can induce a terminal sense of humour failure in even the most loyal donor. From a marketer's perspective it is wasteful and the diminishing returns it causes a travesty.
People engage with brands that reflect their own values and perception of themselves. They engage in a way that reflects their current lives. Some would prefer to trek in Peru to raise money, others prefer to attend a concert like Live8 where they feel part of a movement. Others are simply happy to donate on a monthly basis via direct debit. And how do people perceive themselves? Well, go to MySpace.com or any user-generated-content driven site and you'll find people marketing themselves as effectively as any marketing agency. The distinction between consumer and brand is blurring. Consumer-to-consumer marketing is exploding. The power of word-of-mouth, and the impact of key influencers, are having a profound effect on how brands are perceived, and what preconceptions people bring with them when they first interact with a brand. NSPCC "talk town" exemplifies how getting consumers talking about the work of the charity can increase word-of-mouth and donations.
Arc views the world as moving from B2C to C2B. When a person interacts with a business touchpoint they are doing so as a brand and are looking for a reflection of their own brand values. Knowing how to extract and comprehend these values and express them back in an affirmative and cost-effective manner is now the art and science of DM.
The art is creating diverse and refreshing communications across all channels, which describe your own brand values and allow a dialogue with the recipients, so you can glean their values. The science is capturing these insights and predicting what "consumer brands" are coming to your door and which of your products and services have the best synergy with them. The science is identifying the cost implications of expressing these values and the revenue potential for the lifetime of the relationship. From these insights, the communications become part of a virtuous cycle always refining how we express our values.
If people are behaving as brands, they will evolve over time. Understanding key life stages and life events is paramount to understanding how people change as a brand. Getting married, having a child, getting a new job - all these things have a fundamental impact on how people behave and how they perceive themselves. By anticipating and reacting to these events, businesses can adapt and change with their consumers, ensuring a longer relationship, which must improve long-term profitability.
- Mike Spicer is the managing director of Arc Worldwide.
This article was first published on campaignlive.co.uk
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