Direct response fundraisers face an uncertain future (declining number of donors, declining retention rates, increased costs, increased shortage of experienced staff are just a few of the troubling indicators).
So, in figuring out how to navigate choppy waters it’s helpful to understand that the default position for most of our sector is to resist even more experimenting with innovative tools and processes.
Why do so many cling to what they believe to be the safety of the status quo? Because when it comes to trying new approaches too many fundraisers insist that ‘It’ – the ‘It’ being some innovative approach—be it a predictive model, a new online tool, a new multi-channel process, changing the composition of a board, seeking donor feedback, improving donor services— be a nearly 100% correct approach nearly 100% of the time. Otherwise, forget it, “we’ll just stick with the same-old-same-old, thank you.”
Afterall, “we have to meet the numbers”… “we don’t have time or budget”… and “the devil we know is preferable to the one we don’t.”
We arrive at such a silly belief without the foggiest idea or understanding of what the ‘failure rates’ are on the techniques, technologies and strategies we’ve been using — over and over without questioning — for years.
The examples are nearly infinite. Here are but a few.
- We reject the use of predictive models because they only work 80% of the time, not realizing of course that our old RFM segmentation processes may work only 50% or 60% of the time — if we only knew.
- We reject the use of telemarketing for securing monthly donors because ‘it costs more’ and ‘upsets donors at dinner time’, not realizing or bothering to calculate that our ‘failure rate’ for acquiring sustainers by mail is 5 times higher than over the phone. Even worse…we resist even launching a sustainer program ’cause “we don’t have the software”…”don’t have time”… or “it costs too much.”
- We resist firing and replacing a lousy board because we don’t want to rock the boat or feel we don’t have power, without calculating the ‘failure rate’ of a board that doesn’t give, get and often doesn’t even both to attend. (It’s sure not difficult to calculate the failure rate of those boards who forbade fundraising in the pandemic as ‘not in good taste’ or today don’t want to invest more money in “these uncertain times.”)
- We resist thanking and properly welcoming donors because ‘we just don’t have the time’…’it’s a cost center’…’we don’t have the money or system to determine a donor’s identity’ without calculating the ‘failure rate’ of poor retention and decreased lifetime value.
- We resist using direct mail in the mistaken belief that digital is ‘inexpensive’ and easy without calculating the ‘failure rate’ of avoiding a channel that is far more productive but may require the time to learn or cost to work with an expert.
- As Kevin has pointed out in frequent posts–the latest just last week for those who do use direct response the conventional method of incremental and often insignificant A/B testing rules the day.
It’s time to calculate the “failure rate” of not using multi-variate testing, predictive analytics, donor identity and personality traits. Too often they’re dismissed or resisted as some sort of witchcraft — all snake oil, lizard’s tails, and newt’s eyes — simply because they don’t succeed 100% of the time. Even though the ‘good old ways’ succeed only 16% of the time when it comes to beating acquisition controls.
And on and on with the excuses. As Jay Love eloquently told me “Fear is a terribly tough incumbent to beat.”
Tradition and aversion to risk usually determine what’s defined as ‘Best Practices’. Sadly, too few realize that sticking with the status quo is the greatest risk of all.
For example, , even though the failure rate on new acquisition packages is extraordinarily high (fewer than 1 in 6 tests ever beat the control) and the process of getting to failure is expensive and time consuming (with postal direct mail ink must dry, the postal service has to deliver, returns come back over a period of weeks and months, and then have to be analyzed). Despite all this the sector largely persists in approaching testing the same old way despite better, more effective, and far more accurate ways of testing.
There’s both irony and paradox in the way most of the sector approaches direct response. The irony is that those small to mid-size organizations that could benefit the most from the “new” resist change because they think “new” approaches are too expensive or complex . In fact, nearly every “new” but proven approach can be applied at little cost.
This resistance to trying new approaches amounts to what I call the “success paradox.” On the one hand, we settle for conventional testing methos that deliver only 10%-20% success. Yet on the other hand, we reject new processes, new ideas and new analytics just because they deliver 50%-60% instead of 100% accuracy.
Most mysterious to me is the seeming unwillingness of many fundraisers to question and challenge the approaches/techniques they and the sector generally have used year after year. Far too many outside consultants and fundraisers inside organizations seem to be inoculated against the new — even worse the math-based and empirically proven ‘new.
It doesn’t cost money or much time to pay attention and learn to how the habits of consumers and donors have changed, to grasp the applicability of new behavioral science research, follow what successful groundbreakers are doing —and then — ask the question of how this information could be applied to your organization’s work. ( I realize when it comes to Agitator readers I’m speaking to the choir.)
As a simple but terribly important example of questioning your practices compared with changes in society, in the next post (Wednesday Oct.18) Kevin asks an obvious question, one I suspect few of the “best practice” folks have ever asked or acted on: “What Happens When All the Paper Checks Are Gone?”
The point of this post is to simply encourage fundraisers to question and challenge their current practices and think about ‘failure rates’. You’re likely to discover that a superior result (meaning one that beats what you’re now doing or not doing ) of 50% with a 50% failure rate beats the hell out of the ‘superior’ results most folks are now getting by tinkering on the margins almost every time.
We don’t have to fall in love with or obsess over ‘failure rates’. But you sure do have to understand them if we’re ever going to break out of the same-old/same-old pattern that will most certainly guarantee ultimate stagnation, decline and failure.