Targeting Affluent Donors

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The most recent daily post from e-marketer may be worth taking note of as it relates to high net worth donors.

While I appreciate that it was brands/companies and not brands/non-profits that were the subject of this study, the results can still be instructive to fundraisers. Certainly those with financial means are going to be of interest to any charitable organization and understanding their online behaviour may help in building relationships.

While the most traditional and still most effective way of approaching affluent donors is in person, it would be a mistake to assume that social media can’t be an important tool in building relationships with this cohort. To that extent the study is very useful.

Some of the results were predictable. I would have assumed that “affluents” aren’t looking for bargains online so the differential in the responses to “I wanted to get deals/discounts” and “I love the brand…” isn’t surprising.

But the responses to the next four statements are far more telling. For the sake of analysis I would organize them into pairs. “I noticed someone following the brand/company profile” and “the social network recommended it,” both indicate the greater degree to which people in this category are influenced by the opinions of their peers and sources they trust. It’s not news to any major gifts specialist that the most important factor in any solicitation is the person doing the asking or who has brought the philanthropic opportunity to the donor’s attention. This is in fact borne out in interviews with Canada’s top philanthropists that I have been conducting as part of a book project.

The to do list regarding this factor would be to find ways to extend the influence of your current affluent donors. Perhaps consider setting up a Facebook page that reflects the interests/concerns of affluent donors. Make it easy for donors to convey information about your organization. Create giving opportunities targeted to affluent donors and strategically use social media advertising to create awareness and drive traffic.

The last pair that caught my attention was “An ad (print, tv, online) led me to it” and “It was mentioned in an article.” Both of these underline the need for cross channel marketing. It has been well documented that marketing and fundraising efforts that use multiple channels enjoy better results. In practical terms this may mean considering ads in targeted publications to drive traffic to an “affluent-focused” Facebook page. Perhaps the content of that page can be unique enough to attract media attention (with a little pr help of course).

There are undoubtedly many other practical ways to use these research findings to create and enhance your relationship with affluent donors and I’d love to hear some of your experiences and/or suggestions.

Data That's Relevant to the Majority

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There’s a ton of fundraising-effectiveness research available these days but is it relevant to the realities of the majority of organizations?

There’s been lots of buzz in the past week about a new study on email fundraising released by M+R Strategic and NTEN. What’s attracting attention is the study’s conclusion that organizations with smaller email lists are getting better results than those with larger lists. In fact in some data categories, the small list results are almost double those of the large lists. These are interesting findings but here’s what I was thinking.

The definition of a small list according to the study is under 100,000. But 100,000 is an astronomical number of email addresses. For most organizations, having 5,000 - 10,000 email addresses would be a stretch. So, let’s resist the inclination to be intimidated and see how the numbers play out if you are only sending let’s say 5,000 emails.

Based on the study’s findings for small list campaigns, you can on average expect:

• Open rate - 19.8% which means that 990 people will open your email
• Click through rate - 4.1%. OK, now 205 people will use any link in your email to visit your site
• Response Rate - .25%. That means that 12 people will make a gift
• Given the average gift amount of $100.65, your campaign will gross $1207.80
• And if you can do this – as small list organizations are – 2.3 times per month, or let’s say even 25 times per year, that’s $30,195

Admittedly there are lots of assumptions in these numbers including that 5000 is even a large enough sample to generate average results. But it does raise questions. What are the costs associated with an ongoing email campaign including the acquisition and maintenance of lists, the development of regular email content and monitoring results? If that takes an additional staff person, your email campaign just became a losing proposition. Or, does the value of first-time or monthly donors mitigate the cost? What’s the longer-term value of having almost 1,000 people visit your site? If you can double the number of emails and reach over $60,000 in gross revenue, does the campaign become worthwhile?

I don’t have all the answers. Every organization will have to come to its own conclusion but it seems to me that for most, it’s not a slam-dunk. An informed decision can only be made on a careful consideration of the numbers. The good news is that the digital world can provide all the data necessary.

Make it work:

• When considering an email campaign, do your diligence and use available research to project results.
• Don’t forget that there is a qualitative aspect to email campaigns. Effective writing and compelling design will always be more successful.
• Remember that the effectiveness of the donation landing page is also a key component. Make sure that once they get there, prospective donors are encouraged to give.
• Think long term and consider how you can increase the size of your email list and the cumulative effect of increased site traffic.