1. Direct Marketing 201 “OK, So Now What?” 5.15.13 Tom Gaffny tomgaffny@hotmail.com

2. Direct Marketing 201 3 THINGS WE NEED TO STOP THINKING, AND STOP DOING 2

3. Direct Marketing 201 In fact, the opposite is true. You Belong to the Donor You Don’t Have a Donor Base– 3

4. Direct Marketing 201 3 Things We Need to Stop Thinking and Stop Doing 1.We need to stop thinking we own the relationship with ‘our donors’ … because we don’t. 4

5. Direct Marketing 201 -What you send -When you send it -Which channel -Whether to open -When to open -Whether to read -Whether to respond -When to respond -How much to give -Which channel to use The Fundraising Dialogue Sender Receiver 5

6. Direct Marketing 201 You’re in Charge, Huh? This month … the average donor is going to be awake 29,000 minutes During that time she’ll get over 50,000 marketing messages If she pays attention to your communication, she might give you 5 of those minutes 17% of people even open their emails Direct mail … oftentimes less 6

7. Direct Marketing 201 BUT WE INSIST ON THINKING IT’S ABOUT US We ACQUIRE Donors … 7

8. Direct Marketing 201 BUT WE INSIST ON THINKING IT’S ABOUT US We ACQUIRE Donors … ‘hostage-taking’ phase We RECAPTURE them, if they lapse ‘Why Have You Foresaken Us?’ letter Put them through a CONVERSION program Our language reflects our attitude 8

9. Direct Marketing 201 The American Donor Public Is Suffering From Battered Donor Syndrome Craving a relationship that’s more about them 9

10. Direct Marketing 201 The American Donor Public Is Suffering From Battered Donor Syndrome Craving a relationship that’s more about them (and unless we embrace their feelings, we’re screwed) 10

11. Direct Marketing 201 Proof the public craves a relationship that’s more about them? Introducing one of the hottest new acquisition offers in the past 5 years… 11

16. Direct Marketing 201 Interesting, huh? The Offer that explicitly promises We Don’t Want a Relationship, Is Very Successful at Starting a Relationship 16

17. Direct Marketing 201 Why Does This Work? -Because this offer tells the donor ‘you’re in charge of this relationship’ The donor’s need for control is that deep 17

18. Direct Marketing 201 Proof the public craves a relationship that’s more about them? 18

25. Direct Marketing 201 Making it all About the Donor: Food for the Poor contacted thousands of donors in and around Boston area. But that’s nothing new… Hurricane Sandy: Called more than 11,000 donors – followed up with prayer option Sandy Hook in CT: Contacted more than 25,000 donors 25

26. Direct Marketing 201 Proof the public craves a relationship that’s more about them? 26

32. Direct Marketing 201 The Results: More than 25% of people responded Generated more that $171,000 Giving from 20 year+ donor core has been increasing for the first time in years 32

33. Direct Marketing 201 Yes, even this is Proof…. 33

34. The one tactic that lifts response every time.

35. Direct Marketing 201 Three Recent Examples Charity A – Multiple stamps lifted net revenue 92% Charity B – Multiple stamps lifted net revenue 51% Charity C – Multiple stamps lifted net revenue 44% 35

36. Direct Marketing 201 This Isn’t Just About Tactics. And It’s Not Just About Postage. This works because it’s one of the few things we ever do for the donor It’s about their convenience, their ease, their pocketbook Outgoing 1 st class = for us Return 1 st class = for the donor 36

37. Direct Marketing 201 The Nonprofits that Recognize the Donor OWNS THE RELATIONSHIP Will be the Biggest Winners in the Decade Ahead. 37

38. Direct Marketing 201 A PROFOUND ATTITUDINAL SHIFT: Identify the people who really matter Commit to a true donor-centric approach Focus on engagement and donor service A zealous commitment to nurturing the relationship 38

39. Direct Marketing 201 3 Things We Need to Stop Thinking and Stop Doing 1.We need to stop thinking we own the relationship with ‘our donors’… because we don’t 2.We Need to stop relying on the same old one-dimensional pyramid 39

40. Transaction Pyramid Low Value High Value Giving Profile Recency Frequency Amount 40

41. Transaction and Action Pyramid Low Value High Value Giving Profile Recency Frequency Amount Activity Profile # of channels Volunteer? Special Events 41

42. Transaction and Action and Attributes Pyramid Low Value High Value Giving Profile Recency Frequency Amount Activity Profile # of channels Volunteer? Special Events You Know How To Rank Her Attributes Age Wealth Health

43. Direct Marketing 201 But Do You Know How She Ranks You? 43

44. Direct Marketing 201 How Do You Rank in Her Pyramid? Are you a Priority in her life? … or just one of many? Does she give you more than she gives to other charities … or less? Is it unusual for her to support you? … or does she throw a few dollars at everyone? 44

45. Direct Marketing 201 How She Supports Other Charities Also Tells You How Much She Values You How You Rank. 45

46. Passion Pyramid Low Passion High Passion MRS. JONESMRS. SMITH Gives to only 2-3 charities Gives you twice as much as she gives to others Gives to lots of organizations Gives more to others than you

47. Who’s More Passionate About You? Low Passion High Passion MRS. JONES Gives to lots of organizations Gives more to others than you MRS. SMITH Gives to only 2-3 charities Gives you twice as much as she gives to others

48. National organization launched a Planned Giving campaign Selected ‘High Passion’ names who did NOT meet their longstanding planned giving select criteria Real World Example #1 48 Value Pyramid Low Value Passion Pyramid Low Passion % RESPONSE FROM THAT SEGMENT – 3 TIMES OVERALL CAMPAIGN

49. MRS. SMITHMRS. JONESMRS. YOWZA $25$25$25 Real World Example #2 Gives to others But never upgrades 2 times as much to you as other orgs OVERLAY HISTORY WITH OTHER CHARITIES Gives once to others But never again 18 Times More Net 30 Times More Net 49

50. Direct Marketing 201 We Need to Have A Data Dialogue with Donors CAMPAIGN VIEW How We Rank the Donor 50

51. Direct Marketing 201 DONOR VIEW How They Rank You DONOR VIEW How They Rank You CAMPAIGN VIEW How We Rank the Donor CAMPAIGN VIEW How We Rank the Donor 51 We Need to Have A Data Dialogue with Donors

52. Direct Marketing 201 ‘You-centered’ Modeling and Analysis Will Be the ‘Dividing Line’ Tool Will separate the winning charities from the losers in the decade ahead Historically focused on ‘saving money’ – needs to shift more to optimizing relationships “We can’t afford to invest in this”??? You can’t afford NOT to invest in it. 52

54. Direct Marketing 201 3 Things We Need to Stop Thinking and Stop Doing 1.We need to stop thinking we own the relationship… because we don’t 2.We Need to stop relying on the same old one-dimensional pyramid 3.We need to stop believing acquisition is the main key to growing our file 54

55. Direct Marketing 201 We may be the ONLY INDUSTRY In the world That doesn’t view RETENTION as the key to growth 55

56. The most important goals for nonprofit communications strategies in 2013 NonprofitMarketingGuide.com survey

57. The most important goals for nonprofit communications strategies in 2013 NonprofitMarketingGuide.com survey

58. Direct Marketing 201 THE BIGGEST ISSUE TODAY ISN’T ACQUISITION It’s FILE GROWTH. And RETENTION is the key to file growth. 58

59. Direct Marketing 201 The RETENTION Growth Case IMAGINE IF 4 YEARS AGO… 59

60. Direct Marketing 201 The RETENTION Growth Case IMAGINE IF 4 YEARS AGO… Option #1:- Invested heavily in acquisition - Status Quo in Multi-year retention rates 60

61. Direct Marketing 201 The RETENTION Growth Case IMAGINE IF 4 YEARS AGO… Option #1:- Invested heavily in acquisition - Status Quo in Multi-year retention rates Option #2:- Cut acquisition 25% - Invested in multi-year retention; increased rate 2% 61

62. Direct Marketing 201 ASSUMING … Your Program Matches Industry Standards −First Year Retention rate of 25% −Second Year Retention rate of 40% −Multi-year Retention rate of 65% 62

63. Direct Marketing 201 For Most Files I See: OPTION #2 would: -Give you as many (or even more) donors -Result in more ‘multi-year’ donors -Result in far more net revenue 63

64. Direct Marketing 201 KEYS TO RETENTION: Commit to Greater investment, focused on: Truly knowing your best supporters; their interests, their needs Using the Whole pyramid: Transactions, Actions, Attributes … and Passion Nurturing true relationships through superior donor service 64

65. Direct Marketing 201 Thank You! Tom Gaffny tomgaffny@hotmail.com

66. Direct Marketing 201 3 Things We Need to Stop Thinking and Stop Doing 1.We need to stop thinking we own the relationship… because we don’t 2.We Need to stop relying on the same old one-dimensional pyramid 3.We need to stop believing acquisition is the main key to growing our file 66

69. Direct Marketing 201 But aren’t all the old donors dying? (Don’t tell them) 69 Life Expectancy: 85 87 88 90 92 Age: 65 70 75 80 85

70. Profile Data Low Value High Value How You Rank Her Low Passion High Passion How She Ranks You Passion Ranking

71. Profile Data Low Passion High Passion Low Value High Value How She Ranks YouHow You Rank Her Passion Ranking

72. Profile Data Low Passion High Passion Low Value High Value How She Ranks YouHow You Rank Her Passion Ranking

75. Direct Marketing 201 THE REALITY: The one tactic that makes it easier for the donor, Is the one tactic That makes the biggest difference. 75

77. Direct Marketing 201 Proof the public craves a relationship that’s more about them? 77

78. Direct Marketing 201 Dear Fundraiser, 78

79. Direct Marketing 201 Dear Fundraiser, “Don’t talk to me like that, OK?” Sincerely, American Boomer 79

80. Direct Marketing 201 Dear Fundraiser, “Don’t talk to me like that, OK?” Sincerely, American Boomer P.S. I’m really getting to hate name labels. 80

82. Direct Marketing 201 The ‘Winning’ Subject Line: “Hey” 82

83. Direct Marketing 201 “It quickly became clear that a casual tone was usually most effective. The subject lines that worked best were things you might see in your in-box from other people,” Fallsgraff says. “‘Hey’ was probably the best one we had over the duration.” 83

87. National Health organization Important mailing to ‘higher dollar’ audience What if they expand audience –target people with low-tier RFA … but high passion? Real World Example #1 Value Pyramid Low Value Passion Pyramid Low Passion

88. Mailed $25-49 high passion names 150% higher response than w/o segmentation Real World Example #1 88

89. Direct Marketing 201 The Reality: Your donor doesn’t belong to you. You belong to her. And unless we do more to embrace this mindset, we’re screwed. 89

91. 92% lift in NET income.