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Ask Less, Make More. Turning the “ask more, make more” adage on its head.

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Overview “Ask more, make more” is a direct marketing truism and the unyielding approach employed by the vast majority of fundraising charities. How do we reconcile this with another truism; the reality of little or no growth in the sector and, in many cases, decline. There is one UK charity – a large, well established brand – that has lost more donors that it has gained every month except 8 over the last 96 months. This is not unusual; it’s the norm for most large and mid-sized charities. As for the small ones, the vast majority either go out of business or never even approach mid-size. To recap: “Ask more, make more” is the philosophy that drives today’s fundraising apparatus despite the fact that the sector hasn’t grown in a long time. Most charities are barely staying flat. How to reconcile the two? After all, if the ‘truism’ is true and charities are asking more why no growth? Albert Einstein said: “There could be no fairer destiny for any physical theory than that it should point the way to a more comprehensive theory in which it lives on as a limiting case.” David Sackett, the father of evidence-based medicine said, “Half of what you’ll learn in medical school will be shown to be either dead wrong or out of date within five years of your graduation; the trouble is that nobody can tell you which half–so the most important thing to learn is how to learn on your own.” How long has the “ask more, make more” physical theory and practice of fundraising been around? Decades. Why hasn’t it evolved into a more comprehensive theory? Do we honestly believe our handle on the world is that much more firm than the medical profession? So much more solid that it should live on for decades because it is so accurate, so fundamental? Maybe we’ve nailed it--- maybe. Or perhaps, we need to get better at learning how to learn differently. As a final, summary footnote, describing outdated or discredited theories as "wrong" misses a major subtlety in all sciences – physical or social: discarded theories aren't really wrong, they just fail to explain new evidence, and more often than not the new theory to come along builds on the old with some extensions, caveats or alternatives.

A warning to readers: Don’t stop reading if you’ve prematurely decided this paper is all theory and idle speculation. To cut to the chase, there is data and evidence that there is more to the story than just “ask more, make more” and we lay it all out in this paper. We also offer a specific alternative – with proof - and take aim at “engagement” and “donor centricity” as empty, albeit well-intended, terms offered as an elixir to the problem of over-communication. An elixir that creates a false sense of progress or worse, accelerates the donor exit out the back door.

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Ask More, Make More, Right? This is a real test (Table 1) by a charity over the course of a year. The only difference is the number of appeals (i.e. asks for money) that were sent – 18 vs. 15 vs 12. Total revenue and net are reported. The data are clear - 18 beat 15 and 15 beat 12. Ask more, make more. Proof. End of story. Or is it? Under current and conventional practices it is indeed the end of the story. The need to try and “make the number” at the end of the year leads to the unchallenged practice that sending one more appeal nets more money. And vendors are more than happy to oblige in creating, producing and mailing one more appeal to meet the goal. Of course this isn’t just about mail. Don’t forget the other truism: “donors who give in more than one channel tend to give more.” Enter ‘multi-channel’ communication, and by extension, even more asking. It is not at all unusual for large charities to have 40, 50 or 60 asks in a year across all channels and upwards of 100 or more when “no-ask” touchpoints or “engagement” touchpoints are added in. Many CEO’s and Boards and senior executives argue – with personal opinion and gut feeling as opposed to data – that “this feels like a lot, too much in fact”. But what about “ask more, make more”? Shouldn’t 50 asks beat 40 and 40 beat 30 just like 18 beats 15 and 15 beats 12? Let’s return to our same results but add in an important and simple math wrinkle – calculating the average revenue and net per appeal (Table 2). Both go down, a lot, as we increase the number of appeals. In fact, look at the net gain between 15 and 18 appeals – a lousy $3,507 from three more appeals or $1,169 per appeal. How can this be? The average per appeal in the 15 appeal test is almost $27,000. Why don’t we get an extra $81,000 (27k * 3) with the three extra appeals? Because there are massive diminishing returns from every marketing or advertising effort. This is a direct marketing reality that is as true as 18 beating 15 and 15 beating 12. And this is the starting point, but only the start, for understanding how you can “ask less and make more”.

Three Test Panels to Evaluate Impact of # of Asks

18 Appeals 18 Average 15 Appeals 15 Average 12 Appeals 12 average Total Revenue $423,652 $23,536 $403,674 $26,911 $388,367 $32,363 Net Revenue $281,578 $15,643 $278,071 $18,538 $273,725 $22,810

$3,507

Total net revenue gain

$1,169 Net revenue gain per appeal

Decline in net improvement

1%

2%

Three Test Panels to Evaluate Impact of Number of Asks

18 Appeals 15 Appeals 12 Appeals

Total Revenue $423,652 $403,674 $388,367 Net Revenue $281,578 $278,071 $273,725

Table 1

Table 2

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What do diminishing returns look like? For the house file it is a concave curve (Figure 1). So what? Isn’t $3,507 more net for the program and cause even if it is way out on the concave curve of flatness? Yes, it is. However, the better question is: Can we, somehow, get the extra $3507 from the 15 appeals and not mail the extra 3? Currently, the way direct response fundraising typically works is that everybody who is deemed “active” gets the same number of appeals, no matter what. In short, we treat the house file as if everybody “lives” on the same blue curve of performance and what we’d call “tolerance” for the number of asks. We’d like to call it “preference” but we’ll get to true donor preference later. For now, this is “tolerance”. Is it so hard to think or believe people have different ask tolerances? We readily accept they have different gift frequencies and recency patterns. How do we think they got this way? They are responding differently based on receiving the same 12 or 24 months’ worth of stuff. The reality? There are different curves for different segments of donors. None of the “mail more, make more” tests – like the one we’ve described and many others we are familiar with – use any sort of selection or model to group people into the 12, 15 or 18 appeal track. It is simple, random nth select. This means they get a mix of Donor X, Y and Z in each test track. The result? Mailing everybody to a random and pulled out of thin air number of appeals (and single tolerance curve) and yes, marginally more net. However, if you conduct that same test but slot donors according to a model based on “ask tolerance” you get a very different result. If you add up the net revenue of tests for Donor Z (18 appeals), Y (15 appeals) and X (12 appeals) compared to the control where everybody gets the same 18 you can increase net revenue by 20% to 30%. “Ask more, make more” is broken. The reality is you can ask less, make same for some donors and spend less and net more for many other donors on the file. But what if this improvement is still selling the true potential short? What if you can ask less, make more, spend less and net even more? All we’ve really proven thus far is using transactional data and promotion history and statistical modeling you can increase the efficiency of what is an incredibly inefficient process. Hardly earth shattering. It is time for a more comprehensive theory and way to do business.

Figure 1

Figure 2

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Ask Less, Make More. How to get there? Consider pizza; Domino’s specifically. The year is 2010 and Patrick Doyle is the new CEO of Domino’s. He was brought in because the prior two years were the worst ever for sales. No growth and a tough, highly competitive market. Sound familiar? What happens next is where it won’t sound familiar at all. Mr. Doyle elects to conduct customer research and learns – in largely qualitative sessions – that customers hate the pizza. Tough to hear. Easy to ignore and even easier to rationalize away, which is exactly what happens every time a consultant or nonprofit staff person chooses to discount donor comments about the amount of mail, email, etc… Mr. Doyle is clearly not in the fundraising sector. Not only did he elect to internalize it, he made it public with nationwide TV ads showing customers complaining about the pizza. Then, Mr. Doyle appeared on the screen with an apology and a promise: “We hear you America. Sometimes you know you’ve got to make a change. Please give us another try.” In the three months following those ads Domino’s had its fastest rise in sales in company history. Do we hear our donors the way Mr. Doyle heard his customers? We see lots of industry comments about being “donor-centric” and listening to donors. But is this really happening? Consider this actual donor comment.

“You send me wayyyyyyyy too much paper mail, and I need it to stop!! I love giving to you every year, but I can only afford to give small amounts. When you constantly send me thick, expensive paper mailings asking for more donations, it's a complete waste of my donation. It feels awful to see that my annual donation was probably worth less than what it cost you to send me all that mail. So wasteful. And I can't find an easy way to get you to stop mailing me paper! Please help it stop so I can feel like my money is going somewhere other than right back into my mailbox/recycling bin.”

Every charity on the globe has received a similar comment. Many large charities get thousands of these comments a year and this is with most putting their collective finger on the “mute” button, making it hard to find contact information and rarely, pro-actively soliciting feedback and never, ever doing continuous listening and interacting.

Now consider this comment from a well-known blogger and fundraising consultant who refers to complaints about “too much mail” as “You can't please everyone" complaints.

He goes on to say,

“Really, you can't. If you try, someone will still complain. And your attempts to please everyone will destroy your fundraising effectiveness. Don't let the complaints guide your decisions about those things! Watch donor behavior -- typically, you get hundreds or thousands of donors endorsing your work with their wallet for every one who complains. The correct action to these errors is not to change what you do. Not to let the vocal minority drive your strategy.

We quote this consultant because his opinion likely matches a lot of people in the fundraising sector. Do fundraisers out there actually think the lousy retention rates are wholly unrelated to the ‘stop sending so much stuff’ sentiment we’ve all heard?

This same consultant and the legions of people who likely agree with him have apparently not connected those dots at all. The 18, 15, 12 test is all he needs as proof. No more inquiry. And yet, using just donor behavior data we have proved a change in strategy from the oversimplified ‘ask more, make more’, ‘don’t change what you do approach’ is warranted.

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Donor Preference and Intent

But what about these complaints? First of all, are they actually complaints? Take a minute to re-read the donor comment. How would you characterize their comment; a complainer to be ignored or a donor making a semi-desperate attempt to help the charity?

Consider another donor comment:

You don't have to spend so much sending me solicitations nearly every month. My family will continue to donate with one simple reminder a year.

The thousands of comments like these are clear indicators – better than any behavior data – of two very important things, 1) Preference and 2) Intent. The intent is to keep giving. We’ve analyzed tens of thousands of donor comments – most from a feedback program for our clients designed to actively and regularly solicit feedback and act on it – and found that the vast majority of the “too much stuff” comments are not complaints at all. They are attempts to help the charity. They have an expressed intent (implicit or explicit) to keep giving. The preference is merely for less stuff. It is almost always vague and general. The donor preference stated with a high degree of specificity – e.g. I just want to get 2 direct mail appeals, one renewal mailing, the annual fund, no reports, the e-news 4 times a year and a matching gift offer at the end of the year - does not exist. This vagueness is an opportunity to put together a thoughtful, specialized set of communications. Unfortunately, “special” is not a part of how this gets operationalized. Instead, this donor and others like her get coded in the CRM system and get the same stuff they used to get, just less of it. Often, the preference isn’t even acknowledged, just coded into the database and marked as a task completed. Consider the National Committee to Preserve Social Security and Medicare (NCPSSM) who does just this - code em’, send em’ less and forget em’. They looked back at performance and discovered this group of donors actually gave more than other groups. Or a large UK charity with two groups of donors identical in every way except one group had the “do not contact” flag and their LTV was double the group who got all the stuff. These are not isolated examples, we’ve seen it plenty of times before. But what if we did develop a more thoughtful, customized set of communications based on this stated preference and intent? For starters, what if we took a page from the Domino’s playbook and tell these donors we heard them and we apologize and tell them we are changing as a result of their direct feedback. Which charity out there couldn’t use a 3 month bump in donations to exceed your best performance ever? And what if the communications go beyond just the initial “we heard you, we will change, we are sorry” communication and focused on using the limited opportunities to communicate to simply remind people of their intent. One client has a telemarketing list that contains nothing but people who have said they will donate 1 time per year. The conversion rate on this list of donors is 83%. Why? Because the main message is a reminder of the donor’s intent to give and this call being their opportunity to do exactly what they intended. Humans like consistency. We look for it in our interactions with people, companies and yes, charities. We also look for it within our own actions.

One client has a telemarketing list that is nothing but people

who have said they will donate 1 time per year. The conversion

rate on this list of donors is 83%. Why? Because the main

message is a reminder of the donor’s intent to give.

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That is why this works. It isn’t random or dumb luck. It can be explained by part of what amounts to a more comprehensive theory of how to raise money by taking the ‘ask more, make more’ adage, identifying the holes and then coming up with an alternative by looking at the data differently and considering new data (i.e. qualitative donor feedback and comments). The reality is that “ask more, make more” is simple and convenient and, for a while, maybe even “true” in that the holes were less obvious and less necessary to discover. The game has changed. Growth is really hard to come by. The new “formula” for success is more involved than what we’ve conveyed here – coding up a few “send less stuff” comments and looking in the rearview mirror is hardly the end-game. For starters, do you really think the relative few who take the time and make the effort to find a phone number or email address or even write on the reply slip requesting less stuff are the only ones? They represent the tip of a very big iceberg and taking the finger off the “mute” button to actively solicit feedback about donor experiences after every interaction and acting on it is a key ingredient in this new formulation for growth. Additionally, preference can be modeled using attitudinal and behavior data to identify the touchpoints that actually cause loyalty and value. None of this is necessarily more work but it is very different from how most organizations operate today. That means change. But if you aren’t going to lose your job or your sleep over flat/no growth then “simple and convenient” and status quo will probably win the day. Just realize there are charities who are making these changes and growing. What other alternatives exist --in addition to doing nothing? How about “engagement” or “donor-centricity”? The definition on these two buzzwords is elusive at best. The risk is settling only for what we view as commonplace, default and unhelpful definitions that permeate the market. “Engagement” in the eyes of most seems to ultimately boil down to sending more stuff but making sure it doesn’t ask for money. This is almost a direct admission that at least somebody in the organization thinks the stuff that asks for money isn’t “engaging” at all. Setting that aside, we know many charities in the US and the UK who have worked off this premise and definition as the way to tackle their no-growth and high attrition realities. This results in even more stuff being sent. That stuff has cost and no off-setting revenue. In every instance we are aware of it hasn’t worked. In some cases it actually made the problem slightly worse. If we are “over-communicating” (a polite euphemism to be sure) to large parts of the donor file today – and we are – then sending more stuff, no matter how well-intended is hardly the answer. “Donor-centric” as the term is commonly applied often reduces down to a generic set of copy and layout points and a reminder to thank our donors properly followed by a still raging debate over whether this thank you can or should include an “ask” or not. We’ve seen these common sense changes made and marginally improve performance. However, as Roger Craver of The Agitator warns, “we can’t ‘pronoun’, ‘indent and underline’ and in 14 point copy ‘Donor Love’ our way out of what many donors consider either waste or worse, abuse; no matter how many channels we’re using.” Making these copy changes and revisiting your thank-you’s is fine. Thinking we can check the proverbial box on then being “donor-centric” is quite another.

Taking the finger off the “mute” button to actively solicit feedback about donor

experiences after every interaction and acting on it is a

key ingredient in this new formulation for growth.

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Summary and Confession Some folks change because they see the light, others because they feel the heat. Our change in point-of-view comes about as a result of both. We are on record as having argued that over-solicitation is not a cause of lower retention. More specifically we said,

“…the frequency of ‘touches’ or contacts is not a driver of donor relationship strength and retention rates. What this means is that sending more or less within the frequency ranges in the industry today, does not negatively OR positively impact relationship strength or value.”

What we failed to examine at the time were the alternatives. So, while the statement is still technically accurate, there are alternatives that render it outdated. New types of data and a willingness to look at the same data differently, along with experience in-market will effect a change in mindset and point-of-view. Or at least it should.

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DonorVoice The Experience and Relationship Company

US Contacts:

Kevin Schulman, Founder and Managing Partner kschulman@thedonorvoice.com

Josh Whichard, Partner

jwhichard@thedonorvoice.com

UK Contact: Charlie Hulme, Managing Director

chulme@thedonorvoice.com

Phone: 202-246-9649 www.thedonorvoice.com

Our other white papers (just click):

Donor Experience: Why CRM Fundraising is broken and how to fix it. Donor Churn: How to stop it before it starts and why current approaches prevent this from happening. Overcoming Barriers to Growth: How the nonprofit sector can move from the foothills to the mountain peaks Applying Relationship Theory to donor stewardship