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Tapping into the minds of Canadian e-commerce marketers
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Vol. 30 | No. 10 | November 2017 EDITOR Sarah O’Connor - sarah@dmn.ca
Integrating the art and science of advanced analytics to deliver a distinct customer experience
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Fundraising
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A direct mail option customized to drive results
CONTRIBUTING WRITERS Jennifer Lee Teresa Chiykowski John Lepp Diana Faidi Jennifer Meriano Steve Falk Doug Norris Ryan Garnett Susan Wall Luke Karmazin Daniel Kornitzer
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Customer Centricity
Integrating the art and science of advanced analytics to deliver a distinct customer experience It doesn’t have to be one or the other! By Jennifer Lee
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Jennifer Lee is partner, retail & consumer analytics leader at Deloitte.
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n spite of recent headlines on store closures and bankruptcies, Canadian businesses still have reasons to be optimistic. Consumer spending is on the rise and consumers are eagerly engaging with retailers and brands in stores, online, through mobile and on social media. But, as e-commerce growth continues to outpace conventional retail sales growth and as the path to purchase changes, the rate of retail evolution is characterized by disruption and innovation and is happening faster than we ever thought possible. Executives now face increasing pressure to innovate to remain competitive. Many retailers—in Canada and other thriving economies—wonder how they can possibly keep up with these advancements. Artificial intelligence (AI), big data and exponential technologies are rapidly maturing and fundamentally altering the sector. At the same time, they are also expanding the opportunities available to retailers to respond. Advanced analytics use sophisticated techniques and tools to gather, organize and report data and content to uncover deeper insights and better understand the customer. It even has the power to craft predictions and generate recommendations to provide each customer with a distinctive experience. Shifting to the next generation of retail requires agility, precision and responsiveness to new and emerging technology. In today’s environment, retailers have had to respond to changes at a speed unattainable for many. Advanced analytics has the ability to help retailers understand customer preferences and behaviours and to incorporate a full circle ecosystem that will set them up for success. Despite all the headlines, it is our belief that the way retailers future proof their business is to become an Insight Driven Organization. What is an IDO? An IDO iteratively embeds analysis, data and reasoning into the decision-making process, every day. They are resilient organizations that use a data driven approach to build enterprise-wide capabilities. They also hire and retain talent through integrated teams that deliver on technical and analytical abilities like data modelling and analysis as well as business acumen and communication skills. The changing retail environment isn’t slowing down and executives need to consider developing a new playbook. A first step is to look outside their bubble to gain inspiration. We believe the “store of the future” will need to encompass AI, virtual reality and personalized concierge services across all stages of the customer experience. Are retailers adapting to new ways of understanding customers while at the same time challenging the old approach? Do they have the right partnerships
or an acquisition plan in place to fill any gaps in their capabilities or ecosystem model? These questions will increasingly act as the basis for adaptation. Until recently—even within the last five years —the tools of AI, computational analysis of extremely large data sets and rapidly accelerating technologies in retail were relatively primitive compared to how they’re transforming retail today. To get ahead, retailers must go a step further to deliver a distinct customer experience, with profits in mind. The truth is, retailers are doing more. In fact, they’re investing in e-commerce, mobile, social media and in-store digital analytics—all to define and deliver a unified and persuasive omnichannel experience for their customers. So what’s next? The Deloitte Customer Engagement Index can help make sense of the current and developing retail universe and scope out the work retailers must undertake to fulfill the shopping experience consumers want and have come to expect. The index suggests where retailers should invest to extend niches and drive differentiation to capture market share, make the biggest impact and differentiate in an intensely competitive arena. The use of advanced analytics is a competitive advantage and the retail executives who thrive will approach it with open arms. Strategies can include building complex, cross-channel capabilities and responding to micro-moment and micro-market niches and opportunities. Best of all, it’s not meant to take years to put in place. It can be defined over the course of weeks. Analytics-enabled tools that work with large sums of data can identify granular customer sentiments like lifestyle preferences, social values and relationships that offer new ways to connect with customers across the purchasing lifecycle. Risk sensing is another area to keep in mind. These are processes that include monitoring and analyzing risk through real-time reporting and monitoring of big data to integrate insights into retailers’ daily business. Risk sensing helps brands be more responsive and to quickly allocate resources where needed. Analytics are vital to successfully making the leap to becoming an insight-driven, customer-centric organization. These insights can help identify growth opportunities, determine the smartest omnichannel investments and even expand into new markets globally. As market shocks persist, developing a future-proofing playbook will be essential. To do so, retailers will need to become insight driven to win. The reward? Continuously generated insights that empower retailers to adapt to volatile pressure points and offer a distinct customer experience. November 2017
If your message can’t get through, you have to go around The detour is a new medium: print, enhanced by technology. It’s called ResponsivePrint™
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Fundraising
Fundraisers’ attribution problem How fast is your online giving really growing? The data may surprise you By Ryan Garnett
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ig Data. Predictive analytics. Customer behaviour modelling. These are just a few of the buzzwords you’ll hear around most organizations today. With more data at our fingertips than ever before, there’s good reason for it. And a lot of what customers and donors will do in the future is dictated by what they’ve done in the past. But sometimes your data might not be telling you the whole truth… Direct response marketing tools have been and continue to be very effective today. They provide you with immediate feedback on whether your marketing or fundraising campaign has been a success. And, like much of the marketing we’re exposed to on a daily basis, direct response fundraising techniques have evolved over the years. Go back 10 or 15 years. Direct mail and catalogues were thriving. Calculating your
While online giving is growing, much of the donations are being prompted by other channels. ❱ DMN.ca
November 2017
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Fundraising success was fairly easy. Look at the cost of sending out your package. Compare that with your revenue. Remove the lowest performing segments. And repeat. Almost all of the most successful charities have been successful because they made an investment in direct mail years ago. And it’s these donors who are still making the vast majority of donations today. The only thing that’s really changed is the way in which they choose to make their donations. Many of these traditional direct mail donors are now giving online. As they’ve become more comfortable with shopping, banking and doing so much more online, they’re also increasingly comfortable with making their donations online.
There’s always a prompt that causes them to make that donation. They’ve chosen to make their gift online because that’s convenient for them. They’re not thinking channel-by-channel like you are. They know you have a website and they know they can make their gift there. Simple as that. Of course, it’s not that easy because you’re likely getting questions from your board about shifting your fundraising dollars into this “fast growing” online channel. Looking at the numbers this might seem like the right choice, but you’re potentially setting your organization up for failure if you do that. Because while online giving is growing, much of the donations are being prompted by other channels.
The donor is not thinking channel-by-channel—they’re thinking “I care about this cause, and I’m going to make a donation today.” In many cases, it’s something offline that prompted their gift though. That could be your direct mail piece, a news article or even speaking with a friend. There’s no donor sitting on the couch at home who thinks ‘I haven’t made my donation to X charity this month’. There’s always something that prompts them to give. Often this is direct mail. Yes, you can direct them to a specific URL in your direct mail appeal. This is a useful tracking tool. But in our experience only a fraction of the donors who give online (about 10%) will use this link. The other 90% will just do a quick Google search, or possibly go direct to your main URL (if it’s easy enough to type in). This is where the tracking becomes difficult. Now you’ve got a ‘general online donor’ as most organizations would classify them. And this segment is probably growing quite quickly for you. But there really isn’t such a thing as a ‘general online donor’. November 2017
You can’t control how your donors are going to connect with your organization. Another thing you can do is setup your annual budget with three separate revenue streams— direct mail, email and online. Create a separate budget for each stream, but when reporting back to your board or ED just report on the overall revenue figure. If they ask about the specific channels you can tell them you used a combination of direct mail, email, social media and online fundraising to reach your target. That brings up another very important point. Integration is key to success. You can’t control how your donors are going to connect with your organization. What you can control is the message. And it’s vital this message is consistent. So make sure that your messaging is
consistent across all channels. If it’s not you’ll just confuse donors and decrease the likelihood you’ll get a donation. At the end of the day, having access to more data is a great thing. We just have to be careful that we’re not relying on the data too much, because sometimes it won’t lead us to the correct solution. Ryan Garnett is a Certified Fundraising Executive (CFRE) with more than 10 years of experience helping non-profits raise more money for their causes. At Harvey McKinnon Associates, he’s the head of integrated marketing and helps clients develop strategies for integrating their efforts through all channels including direct mail, telemarketing, email and social media.
So what can you do to avoid this pitfall? One thing is to track overall revenue from your direct mail donors (all channels) and not just revenue received through your direct mail appeals. Yes, you’re likely sending emails and posting on social media, and some of these activities could be prompting the gift. That’s just fine. By tracking all revenue you’ll have a complete picture of each donor and how they give. Again, the donor is not thinking channel-bychannel—they’re thinking “I care about this cause, and I’m going to make a donation today.” You can also track your general online gifts for a period of two to three weeks following your direct mail appeal. You’ll never be able to say 100% for sure that the mailing prompted the donation but, if it’s received shortly after your mailing arrives, you can be pretty sure it did. This is especially important at the end of the year when so many donors are choosing to go online for the convenience. DMN.ca ❰
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Fundraising
Why marketers and fundraisers can’t afford not to be accessible By Steve Falk
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nybody born in Canada after about 1990 might not remember a world without disabled parking, accessible bathrooms and those door-opener buttons at public buildings. But these are all pretty recent additions to our landscape. While there’s still a long way to go, for those with the need, I hope that the world is at least a bit easier to navigate with these things in place. My guess is that some of the decision to implement them was a business case for not limiting access for those whose mobility depends on them. Otherwise, 700,000 Ontarians (the number who had disabled parking permits in Ontario in 2017) aren’t getting access to grocery stores, malls and banks. That equates to about nine per cent of Ontario adults who would have some barrier to entry at these doors to the economy. That’s potentially nine out of 100 cars in the mall parking lot.
obstacle to our written marketing communications. We may not be giving enough thought to who cannot read what we so carefully craft into marcom messages. We may not even realize the scale of the issue. The penny dropped for me when I attended a recent meeting for a group called Xplor. The members of this group all share an interest in the CCM (Customer Communication Management) industry. This largely translates into the types of communications that are required by law or are transactional in nature. Not usually the stuff that marketers fuss with because, by and large, they are bills and statements and legalese for financial corporations. Yawn. But they do have some cool technology and a vision for how to do things at scale that I appreciate. When you consider the problem of printing contracts for all the insurance policies that change every day, mailing them, creating
We might as well rip up 15% of all the direct mail we produce for female donors over 75 because they probably can’t read it. As marketers, it’s frustrating to think that we might expend great effort communicating an offer, the value of a brand or an event, just to be blocked at the door of the very place where the transaction could be concluded. So, we should quietly thank (with a nod to our own selfish concerns) the advocates and lawmakers who have been paving this road for us. Recently I realized that visual impairment may be the next “curb without a wheelchair ramp” ❱ DMN.ca
PDF versions, archiving them and emailing access securely to hundreds of millions of users within the regulatory conditions of each area, you start to appreciate how life as a marketer is sometimes a bit simpler in comparison. Oh, but they also add marketing bits to those communications, so they have one foot in that room too. It’s the regulatory issues that caught my attention this time round. Very soon it will be required to have accessibility options for
people who receive these contracts, bills and statements. Xplor members are wrestling with large print options, improving CRM’s to include visual impairment and tech solutions that could read these documents to people in ways that are not currently available. It hit me that this is a problem for marketers too, we’ve just not been legislated to consider it yet (with a few exceptions). So with a bit of digging and some help from Len Baker of CNIB, who was speaking at the Xplor Ontario event this spring, I was enlightened. It seems that 500,000 people in Canada are estimated to be living with significant vision loss. This group cannot easily digest the visual messages that marketers typically produce. I dug a bit deeper because I have a lot of clients in the not-for-profit fundraising sector and we know that the majority of donors are older women. With that in mind I was concerned to learn that six per cent of women 65 to 74 and 14.9% of women over 75 are identified with sight loss in the latest StatsCan Participation and Activity Limitation Survey. And these numbers are not improving as the population ages and people live longer. It’s like saying that we might as well rip up 15% of all the direct mail we produce for female donors over 75 because they probably can’t read it. This is a valuable loyalty group for a fundraiser. They are the most loyal and supportive and as they age we might be losing the ability to communicate to 15% of them. We might as well lose their address or spell their name incorrectly. So what can be done? Let’s start with the digital world. Each locality has its own legislation about accessibility for online communications so you might have already addressed some of these obstacles in response to this. Many people with visual impairment are tech savvy and they can use browsers to read
websites and email, translating them to voice or to braille keyboards. But the key to success is keeping your site optimized for these readers. For starters, having meta tags on your images will help. Otherwise that beautiful sunset shot for the travel site will be nothing but a blank to them. Be descriptive and add a dimension to the images that is helpful. That includes PDFs, video and other such items that are part of the digital information you post. YouTube has it own free closedcaptioning features now, so you can get those up and running quickly. For printed materials there are added complications and this has been a challenge for Xplor members. The easiest solution is simply producing large print versions. But that does not help everyone. There is one interesting solution provided by Crawford Technologies called Voiceye that allows an entire four-page bank statement or insurance contract to be compacted into a 2D barcode on the page. The reader uses a cellphone or tablet to click on the barcode and the document is provided in large print on the phone or a voice reads the contents. It’s a solution to upcoming legislation that requires these documents to be accessible and it is the kind of technology that is evolving around this issue. I know that we will be continuing to experiment with these tools and techniques to expand the audience for the marketing materials that we produce. Maybe one day this stuff will be as innocuous as the push-button door openers are now and I hope they do for marketing communications what the doors do to improve physical accessibility. As president and owner of Prime Data, Steve Falk leads a tremendously talented and engaged team. He’s earned all of his adult income with businesses that put things in the mail and continually searches for opportunities where mail can add the most value to customer and donor communications. November 2017
Do you make decisions about your marketing operations? Are you responsible for customer acquisition, retention or loyalty? Is your department in charge of fulfilling orders or customer service?
Sign up NOW for a free subscription to Direct Marketing magazine. Visit our website at www.dmn.ca and learn more about the magazine Direct Marketing is a Lloydmedia, Inc publication. Lloydmedia also publishes Financial Operations magazine, Canadian Treasurer magazine, Canadian Equipment Finance magazine, Payments Business magazine and Contact Management magazine.
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Fundraising
Inside the hearts and minds of your donors
By John Lepp
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he bar (as always) was full of people laughing and talking Wednesday night at IFC in Holland. Across from me sat Francesco Ambrogetti, author of Emotionraising, and the fundraising, marketing and donor love director at UNICEF Italy. “Asking, thanking and reporting impact to donors… that’s fundraising. That’s retention,” he said. “When we applied donor love principles to our program, ❱ DMN.ca
we started raising 30% more, year over year.” I was the least surprised to hear this. With many of the organizations we work with, we see similar growth. They are raising more from amazing donors who are giving more and giving more often. Because of #donorlove. What is #donorlove? We explain it with these seven principles that we use to guide us in our work every day: 1. Your donors are heroes. 2. You share amazing and inspiring stories of the work that your
donors make possible. 3. You connect to your donors’ values and emotions by sharing your own. 4. #donorlove is a courtship. A romance. How do you make your donor fall—and stay—in love with you? 5. You ask for one thing and only one thing. 6. Who—or what—is the right voice for your story? 7. You say thanks with passion. I’ll also add one more from our pal, Damian O’Broin of Ask Direct
in Dublin: #donorlove is the thousand small things you must do for your donors every day. So how do we get inside the hearts and minds of your donors? What can we do to become your donors’ favourite charity? The good news is that it is deceptively simple. Simple, but not easy. Just like Frankie said as we sat at the bar at IFC, we must ask (something that most charities seem to do pretty well), we must thank and then we must report back on the amazing work our November 2017
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Fundraising donors made possible (two things that almost every charity is crap at). In Canada, you are in competition with about 85,000 other charities—over 1.6 million if you’re in the U.S. Your beloved donor gets close to 30 to 40 appeals a month—more at this time of year, fewer in the summer. What can you do to ensure that she looks at yours? How can you make her feel cherished, important and needed? That’s what she wants. She also wants to help you win. Asking Let’s talk about asking. Does your offer and ask give me, the donor, an opportunity to swoop in and be a hero? Does it speak to my values as a human and compel me to take immediate action? From @thewhinydonor on Twitter: “I don’t care if your fiscal ends in June, August or December. There’s no point in sending me an appeal asking me to help you reach your goal by then. And definitely don’t tell me you need my donation to balance your budget. I want to help you make the world better. Keeping your accountant happy is your problem.” The late, great George Smith was telling us 25 years ago, in Asking Properly, that every appeal should be “special.” Which means every appeal and every ask should be about a specific problem that can be solved with your donors’ help. I know we all want undesignated gifts so our organizations can spend them wherever they’re most needed. But, personally, I’d rather give a friend $100 when they explain they need it to finally get that car they need for their new job, rather than give them $100 for no specific reason and watch them pocket it, turn and walk away without saying a word. #amiright? Thanking Next, we have thanking. Tom Ahern says “Your job as a fundraiser is to MAKE ME FEEL GOOD! Wanted! Proud of myself! Surprised!” It’s easy to do, really—but why do so few organizations take the time to properly thank these amazing people who make their work possible? Penelope Burk tells us that your donor must get a prompt, unique November 2017
How are you emotionally and thoughtfully thanking your donors? and sincere thank you. She says they should be given details about the program or project they helped support and a promise to follow up with a meaningful and measurable report on what you’ve done with their gift (and you need to actually do that!). A simple, handwritten card. A personal call to your donor thanking them, asking why they decided to give, a quick conversation. A photo paperclipped to the top of their tax receipt. A gratitude report that gushes love and appreciation for the amazing work they helped you make possible. The possibilities are endless. How are you emotionally and thoughtfully thanking your donors? Just like in “real” life, it’s relatively simple to show those we care about how important they are. But not easy. No shortcuts are available here. If you thank without meaning it, without real emotion, you might as well not bother at all. Reporting Finally, you must report back to your donor on their impact. This really is the heart of #donorlove. Being able to show and share with your donors all of the amazing things they make possible is, regardless of giving level, the key to retention, loyalty and increased giving. One of the best ways to share impact is with a thoughtful newsletter. Printed. On paper. Not that crap electronic one that marketing wants “blasted” out once a month. Printed newsletters are the trifecta of great direct response. Because they can ask, thank and report impact, all at the same time. And when you pour #donorlove all over them, your newsletters can easily raise more money than any one-off appeal. Ask Save the Children USA, who transformed their “ungainly, corporate-centred newsletter” (to quote Tom Ahern) into a six-pager that obeyed the Domain Group’s
“Domain Formula” and #donorlove best practices. It went from being a piece that raised $0 to $500,000 gross in one year. That’s not a typo—a half million dollars! But you can also show impact in so many other ways... ❯❯ An insert in your direct mail piece that talks about how, in the past year, you accomplished a, b, and c because of your donor and how, next year, you will be focusing on d, e, and f—and that you know, with your donors’ amazing support, you will accomplish them. ❯❯ A photograph from the “field,” literally showing kids digging holes for trees or a mom leaving the shelter for good or volunteers laughing as they sort through mountains of food at the food bank. ❯❯ A simple card with a note about
North American Direct Marketing provides list brokerage, list management and direct marketing services including data processing, printing and mailing services to various Organizations which includes Consumer Mailers, Business Mailers, Advertising Agencies, Government, Financial Services and Non Profit Organizations in North America and Internationally. Our Customer Acquisition solutions include List Brokerage and List Management services of Postal Lists, Telemarketing Lists, CASL Compliant Email Lists, Alternative Media Programs, Prospecting Database Development Services and Modeling and Profiling services. Our Customer Retention Solutions includes Data Append Services, Telephone Append Services and Email Append Services. Our Customer Asset Monetization Solutions include Prospecting Database Participation Development, CASL Compliant Email Lists Deployment and Co-registration programs.
the moment a boy’s face lit up when he realized his days of being shuffled from foster home to foster home were over. Be creative and be thoughtful. Simple. Not easy. ❯❯ #donorlove and direct response is an ongoing conversation from one human to another. It’s emotional, it’s messy and it’s real. ❯❯ Ask with thoughtfulness, thank with emotion and always remind your donor how much you need them and appreciate the amazing work they make possible. ❯❯ Do your work with love, my friends. John Lepp is a partner at Agents of Good,
a collective of passionate and game changing fundraisers who spend most of their day championing your donors and telling great stories.
North American Direct Marketing offers comprehensive list brokerage, list management and direct marketing services including data processing, printing and mailing.
For more information please contact: Kim Young: kim.young@nadminc.com Jannett Lewis: jannett.lewis@nadminc.com
For List Management please contact: Jacqueline Collymore jacqueline.collymore@nadminc.com
North American Direct Marketing, 44 Wellesworth Drive, Suite 206, Toronto, Ontario, M9C 4R1 Ph: 416-622-8700 • Fax: 416-622-8701 • Toll Free: 1-888-378-2711
DMN.ca ❰
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Fundraising
Why putting the brand in non-profit marketing makes more sense now than ever I By Jennifer Meriano
n the non-profit world, where the critical functions of marketing and fundraising are still too often viewed as having distinct and separate roles, there is a broad misunderstanding about what brand marketing is and what role it can play in supporting the entire organization. This disconnect stems from the general tendency of fundraising specialists to believe their marketing colleagues are too wrapped up in the soft and fuzzy ‘big picture’ to do anything practical to move donors to action. On the other hand, many non-profit marketers believe the fundraisers are too quick to jump right into asking supporters for money and are often guilty of delivering inconsistent brand messaging through the channels they control. Faced with some powerful forces of change—the advent of digital technology and changing demographics chief among them—an increasing number of non-profit organizations are recognizing the need to overcome the challenge of internal functional siloes and are focusing their energies on developing cohesive marketing brands that are supported by smart, integrated fundraising activity through multiple channels. The impetus for this new focus on brand is simple—it helps non-profits and charities build recognition and trust and, ultimately, raise more money. How so? The more somebody recognizes your organization, the more they’ll trust you and the more likely they’ll say yes when you ask them for money. Since donors experience an organization’s brand through the fundraising efforts they are
❱ DMN.ca
exposed to, that fundraising activity, in effect, becomes a component of the organization’s overall brand marketing effort. For example, a growing number of people who receive direct mail fundraising solicitations automatically visit the sender organization’s website before they decide whether to donate. Knowing this, it’s vitally important for the organization to be able to present a consistent and professional brand image across these channels and any others that may come into play. How this should work in practice is that when a non-profit is preparing for a fundraising push, it must ask itself what its key messages will be and—once established—it needs to stick with them, regardless of the medium being used. This can be achieved by having brand consistency across all fundraising channels, including direct mail, online, print, out of home, telemarketing, etc. Branding your individual programs can also help a charity raise more dollars by encouraging greater engagement in a meaningful way. This begins by creating a defined and branded program for monthly giving, major giving or planned giving. Creating specific visuals and messaging for a particular segment will help convince a supporter to become a more deeply engaged donor because: ❯❯ It will unite all your materials for that particular program; ❯❯ It shows donors that you appreciate and recognize their added commitment; and ❯❯ It gives your donors a feeling of belonging to a special community of donors. When you create a branded program for a segment of donors that is consistent with your brand
but specially tailored to reach the hearts of those most likely to give, you will better encourage your donors to be moved up the donor pyramid.
Donors have experiential encounters with non-profit brands Fundraisers are often noted for setting direct mail as the focal point for the bulk of their donor outreach activity. Nowadays, however, donors and potential donors have experiential encounters with non-profit brands at so many different levels, including many in which the nonprofit has no control over what is being said about the organization. Thus, the only way some level of control can be regained is to have a consistent and strong underlying brand at every touch point and— where possible—have consistent campaigns that support the brand. The change is technology driven, as the way people interact with brands of all kinds is vastly different than it was as recently as five or 10 years ago. Truth is, the brand game has changed for everybody, including consumer brand marketers, many of whom have transitioned to the nonprofit space in recent years (full disclosure: I’m one). Marketers who come in from the corporate side sometimes have a tendency to only see the branding challenges that need to be addressed and they often forget about Dorothy Donor, who is still very much the bread and butter for a lot of non-profit organizations. Fundraisers, meanwhile, are correct when they say it’s important for them not to lose their traditional base, but the truth is that traditional donors are starting to age off direct mail lists and they can’t be replaced through traditional fundraising methods.
Your brand needs to make money for your organization You have to make sure all of your channels are helping each other out and making money for your organization. The only way you can ensure that is to integrate your solution. It’s harder to know where your donor is going to be, so you have to have all your angles covered. If you’re not where your donor is, you can be sure your competitors will be. Fortunately, a strong underlying brand message can help you become much clearer and more direct in how you speak to people in all areas of marketing and fundraising. Maintaining a clear and consistent brand across everything you do increases donor trust in your organization and ensures all your marketing and fundraising efforts are not just coordinated but truly integrated. And understanding how to maintain clear brand consistencies while respecting the particular strengths and opportunities offered to you by each of your channels and tailoring your message accordingly is what will maximize your donor dollars. The key is to apply informed brand thinking and marketing strategy to figure out how to make an emotional connection with your donors through your fundraising efforts. That connection needs to not only get people to agree that your mission is important but also to get them to write a cheque and support you.
A strategic, multidisciplinary brand director with over 15 years of experience, Jennifer Meriano specializes in working with non-profit marketers who are looking to address brand and integrated marketing challenges within their organizations. She is director, brand & integrated marketing at Stephen Thomas Ltd.
November 2017
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In the mail This column is sponsored by
To learn more about Canada Post’s integrated direct marketing solutions, please visit canadapost.ca/smartmailmarketing.
A direct mail option customized to drive results In September 2014, the Canadian Red Cross put Canada Post’s Customized Postal Indicia to the test and praised the results By Teresa Chiykowski
Working to mobilize the power of humanity Founded in 1896, the Canadian Red Cross works to improve the lives of vulnerable people by mobilizing the power of humanity in Canada and around the world. When it comes to raising funds, competition is fierce and the Canadian Red Cross must constantly find new and innovative ways to reach out to Canadians and secure its share of the donor wallet. Putting Customized Postal Indicia to the test The organization regularly uses Canada Post’s Addressed Admail (now Personalized Mail) service to connect with donors. However, it is always interested in testing new approaches to improve response rates and, mostly, net revenues per name. Canada Post’s Customized Postal Indicia interested the Canadian Red Cross for its fall 2014 direct mail campaign. “We were pleased that Canada Post gave us a great new approach to test with two different visual treatments—all at no extra cost to us,” says Melissa Winkler, national direct marketing at the Canadian Red Cross. The charity created three groups of 10,000 past donors each. The control Customized Personal Indicia delivers better results group received a package with the standard Customized Customized Personal Indicia 1 Personal Indicia 2 black and white (B&W) printed Net revenue h 9% h 2% indicia. The per name other groups received the Response rates h 11% h 5% same package but with two November 2017
different Customized Postal Indicia that looked like colourful postage stamps stuck on the envelope. Visual indicia proves to be the stamp of success Both Customized Postal Indicia outperformed the control group, yielding net revenues per name nearly nine and two per cent higher than the printed black and white indicia. Response rates were approximately 11 and five per cent better. The test also indicated that the imagery of the indicia could significantly impact on the generosity of donors. “Net revenue per name is so important to us to measure because it allows us to continually fine-tune our mailing packages,” says Winkler. The campaign return on investment (ROI) was also measured and the Canadian Red Cross saw the benefit. “We’re so happy with response, net revenue per name and ROI that we will use Customized Postal Indicia for our entire file in the future,” says Winkler.
A direct mail piece marketed in a personal way can yield significantly higher response rates. To learn more about Canada Post’s direct marketing solutions, please visit canadapost.ca/smartmailmarketing. Teresa Chiykowski is a freelance writer based in Ottawa. DMN.ca ❰
Predictable is magnetic Human brains are hard-wired to be attracted to anything personal. Want proof? Direct mail is proven to drive 64% of recipients online and 47% in store.1 Canada Post Smartmail Marketing can help you zero in on your target and attract more customers. TM
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// 16
Feature
Making sense of the census for marketers
A growing and increasingly diverse population presents both challenges and opportunities
By Dr. Doug Norris
C
anadian cites are undergoing rapid demographic shifts that marketers will need to adapt to if they expect to connect with consumers. That’s the message emerging from the 2016 Census. The latest round of data released by Statistics Canada reveals some of the country’s largest urban centres are undergoing a transformation that is proceeding at a pace unmatched among the world’s leading economies. Canada continues to be the fastest growing country in the G-7. And almost all of this growth is concentrated in large urban areas, particularly in Western Canada, while small towns and rural parts ❱ DMN.ca
of the country are seeing their populations decline. Just as the growth isn’t uniform across the country, growth within cities isn’t uniform either. The condo boom is driving growth in downtown districts, while expansion in nearby suburbs is slowing. The suburbs are also aging faster than the downtown cores of these urban areas. Soon suburbia will no longer be dominated by young, child-rearing families. Increasingly, suburban living will be characterized by empty-nest couples and seniors choosing to live their later years close to family, friends and familiar services and amenities. For marketers, this changing landscape has broad implications. As our large cities grow, techenabled services such as online
grocery stores and transportation alternatives like Uber, car-sharing and bicycle-sharing will become even more popular. The greying of suburbia may also increase demand for subscription services that deliver small indulgences like gourmet meals, big bags of pet food or whatever convenience an aging population might desire. Follow the money Overall, Canada’s population continues to get older. For the first time, seniors (65 and older) outnumbered children (0-14 years old), a result of Canada’s relatively low level of fertility. At the same time, aging Baby Boomers are further distorting the age pyramid. The population aged 55 and over
grew by 35% between 2006 and 2016 compared to an eight per cent growth in the population under age 55. While marketers traditionally have paid little attention to seniors, given they tend to have low incomes and fewer expenditures, the rapid growth in this cohorts’ spending power shouldn’t be ignored. The large and rapidly growing number of seniors led to a 56% increase in aggregate income (spending power) for the older population, compared to an increase of only 15% for the population younger than 55. Because this pattern will continue for several more decades, marketers and advertisers should follow the money and pay more attention to older consumers, November 2017
// 17
Feature populations grew in our large urban areas. In 2016, just over half of the population in the Toronto census metropolitan area considered themselves to be members of one of the 10 visible minority groups. In other words, the “minority” is now the majority in Toronto and the Vancouver area will soon follow that trend. Of course, the nation’s largest urban areas have long been culturally diverse, but the Census found that patterns of immigrant settlement have shifted somewhat. From 2011 to 2016, fewer immigrants settled in Ontario and British Columbia and more moved to the Prairie Provinces and even Atlantic Canada. This new migration pattern means many medium-sized urban areas are becoming more culturally diverse. With Canada’s population increasingly drawn from many parts of the world, understanding the different needs and preferences of these consumers is essential. The way consumers hear and interpret messages may be shaped by their past, and marketers will need to consider these influences while evaluating the overall size of Canada’s visible minority population and the diversity of the groups within those populations.
many of whom have high incomes and substantial wealth. As the older population grew in size over the period 2011 to 2016, the number of people aged 40 to 54 and 10 to 24 actually declined. Those 40 to 54 are members of the smaller “Baby Bust” population that followed the end of the Baby Boom and their children are now aged 10 to 24. The decline in these populations means marketers will need to work harder just to maintain sales levels among these consumers. Meet the new majority As Canada ages, it is also becoming more diverse. Immigration accounted for two-thirds of population growth from 2011 to 2016, and culturally diverse November 2017
Develop a multicultural strategy In developing a multicultural strategy, the first challenge is determining what percentage of the current customer base consists of which various visible minorities. Choosing the target population of interest is also important. For example, should the focus be on the entire group or only more recent immigrants? Should the second generation be included? Should temporary residents be included? And the questions don’t end there. Within a visible minority group, there may be several distinct populations. For example, should a broad category like South Asian or Latin American consumers be further divided based on countries or languages of origin? Should the focus be on Chinese populations from Hong Kong and China or those who speak Mandarin or Cantonese? The decision on what groups to focus on depends in part on the extent to which factors such as values,
media and consumer behaviour are distinct among these sub-groups. Another important question concerns which language to use when communicating messages and placing ads in so-called ethnic media. The Census provides a rich array of data on a number of different language dimensions, including mother tongue, language spoken most often at home, other languages spoken regularly at home and knowledge of languages. And marketers should keep in mind that knowledge and use of English and French vary widely in these groups. A related question is the extent to which various groups consume ethnic media. Appeal to the home alone crowd In addition to the age and relative size of population groups and immigration trends, household composition affects demand for products and services. Today over 60% of households contain one or two people, and approximately equal numbers of households are made up of people living alone, couples with children and couples without children. Families are also increasingly diverse as reflected in the increasing number of samesex couples and step families. All of these population segments have different product needs and preferences that touch virtually all industries. Success in the housing industry has always required a clear-eyed assessment of population changes. The aging population and the related changes in household size and mix have resulted in shifts in the types of dwellings constructed—more rental and condo apartments—and much more change is ahead. Homebuilders and renovators need to better understand the preferences of seniors today, whose tastes may be very different from the seniors of yesterday. As Boomers age, some will begin downsizing and choose apartment and condo living. Others may prefer adults-only communities close to amenities. Innovative homebuilders can show leadership in developing new housing alternatives that allow the older population to age in place and remain in their communities where they can be close to family and friends. This is a particular
challenge in the changing suburbs. Capitalize on new opportunities Assisted living residences for seniors will also likely attract increased attention as health problems become more common among aging Canadians and their ability to live independently wanes. Older, empty-nest couples and singles who choose to remain in their home will likely continue to fuel demand for home remodeling services. And as these men and women settle in to their newly renovated lifestyle, there may be many opportunities for gift shops that offer tableware, decorative items and other “niceto-have” flourishes that were out of reach of their budgets when they were raising a young family. Seniors who remain living in their local communities rather than move to much more expensive health care facilities will also have a greater need for home care services. The shifts in housing requirements and mobility limitations will spawn additional consumer needs that astute marketers in all industries—from grocery stores and entertainment venues to home furnishings and healthcare—should be looking to meet with targeted offers and tailored services. Recognize the marketing ramifications Increasing diversity presents both opportunities and challenges, and marketers should be sensitive to the new dynamics at play. Their ability to identify smaller niche markets is becoming more critical to success. Segmentation tools that capture the shift in household profiles will help them understand the real-world lives of their customers, not the idealized view from decades ago. Now more than ever, accurate data is vital for a range of applications—target marketing, customer insights, media planning, site location studies, response analysis—that can help marketers connect with consumers and turn them into loyal customers. One of Canada’s leading experts on the census, Doug Norris, Ph.D., is a senior vice president and chief demographer at Environics Analytics. DMN.ca ❰
// 18
Payment Processing
Tapping into the minds of Canadian e-commerce marketers By Susan Wall
C
anadian e-commerce marketers want to improve the website experience, understand the importance of mobile commerce and explore one-click buying and social selling. Those are the key takeaways from the research we commissioned earlier this year. Working with research firm Demand ROI, we surveyed e-commerce managers, directors and vice presidents at companies in Canada, the U.S., the UK and Australia with a minimum
â?ą DMN.ca
headcount of 200 employees. The survey was conducted via email in the spring of 2017 and we received a total of 409 responses, with 109 respondents from Canada. Of the Canadian respondents, 80% reported having both brick-and-mortar and online operations. Online and ready for business One of the top business priorities for Canadian retailers in 2017 is improving the website experience, which makes a lot of sense
given the online landscape. According to the Canadian Internet Registration Authority, the average Canadian spends 36.7 hours online recreationally each month—more than anywhere else in the world.
The Canadian government considers access to high-speed internet a fundamental right and is working to provide it to 100% of its population. In that kind of environment,
November 2017
// 19
Payment Processing
retailers are right to focus on creating opportunities to connect with consumers online. Each connection is a possibility to create a relationship with the consumer and, ultimately, establish brand loyalty. Mobile’s critical role The research suggests that Canadian retailers know that the mobile highway can bring more customers—and more sales. The majority of retailers we surveyed said mobile commerce is critical (49%) or important (41%) for the future of their brand. As retailers see an increase in mobile usage by consumers, they are starting to blend offline and online retail experiences with options like in-store Wi-Fi for online shopping and price comparisons and personalized in-store offers on mobile devices, two possibilities that they think will have a great impact on in-store sales. So, how are Canadian retailers optimizing mobile strategy? Fiftyfour per cent of the retailers we surveyed have a dedicated mobile strategy and make investments in the mobile experience—but only 47% are optimizing by phone versus tablet. The Canadian retailers who aren’t optimizing their mobile strategy should take note: 46% of those surveyed say that customers use their phones November 2017
analysis tools: 50% named this as their number one concern. It may be that Canadian retailers perceive the cost of the tools as greater than their worth, or they may be waiting to see what happens for retailers in other markets. Is the investment worth it for them? Canadian retailers should bear in mind that investing in data analysis can pay off many times over by providing more information about consumer behaviors and helping them make better decisions about their businesses—which, in turn, can help drive sales.
before, during and after a purchase. This could mean a missed opportunity for those who haven’t optimized their mobile strategy. Exploring the possibilities We asked Canadian retailers where they would focus if time or money weren’t issues. Their response: one-click buying and selling on emerging social channels. These goals make a lot of sense: We know Canadian retailers are already focused on improving the digital experience and 76% responded that social media is the marketing channel with the greatest impact on sales, since it creates opportunities for them
to reach their customers—no matter where they are. Hesitant to invest in data One way to feel confident about adopting new marketing channels or enhancing existing ones is to use data to measure business outcomes and determine which techniques and tools to invest in next. When we asked Canadian retailers how they felt about their ability to leverage data for business decisions, only 53% feel that they are very effective. So, what is holding them back from making better data-driven decisions? The overwhelming concern for Canadian retailers was the cost and complexity of data
A secure future of e-commerce success While the to-do list might seem long (improve the website experience, explore mobile commerce, consider using data to drive decision making), Canadian retailers have a great market to work in. In many parts of the country, stores aren’t easy to get to, so exploring ways to bring the store to the shoppers is well worth the effort. Taking the time to figure out what works is a solid investment. As vice president of marketing for Oracle + Bronto, Susan Wall is responsible for all marketing strategy and leading all lead generation, branding and positioning initiatives. She brings an extensive background in brand marketing, product marketing, marketing research, media and advertising to her role. DMN.ca ❰
// 20
Payment Processing
Why retailers must pre-authorize online credit card payments By Dania Faidi
M
erchants are always looking for ways to protect their business against fraud and refunds, all the while enhancing their customer service and overall customer satisfaction. Sounds like you? Well, you may want to consider pre-authorizing your online credit card payments, then. Don’t know what that means? No worries! Read along and find out why this step is a definite gamechanger for payment processing. Let’s first define what preauthorization actually means for a retailer and a customer. When you pre-authorize a payment as a retailer, you are essentially not charging your customer just yet but are merely placing a temporary hold on their credit card with their purchase amount. The funds aren’t transferred to your merchant account either until they are claimed or “captured”—the second step to the pre-authorization process—by you. For the customer, pre-authorized payments are not yet posted on their transactions list, but the funds are withdrawn from their credit card limit and the customer cannot access that amount unless the pre-authorization expires. The merchant must claim the funds within five to seven days of placing a hold on the customer’s credit card, or else it will expire and they will have to contact the customer directly to place another order and pay again so that another preauthorization hold can be placed. So, why place a hold on a customer’s card? There are a few reasons this is a beneficial step, but this practice is best adopted by businesses where a product is yet to be received by the customer, such as e-commerce shops, for example, where a hold is placed on the card for a few days before the product is actually out for shipping by the merchant. This minimizes refunds, can protect against frauds and makes the retailer appear more responsible and trusting. ❱ DMN.ca
1. Protect your business from fraud One of the most significant perks of pre-authorizing payments has to do with chargebacks. If you’re unfamiliar with chargebacks, they most commonly occur under fraudulent conditions, such as if someone is purchasing products off of your site using a stolen credit card and committing identity theft. Once the true cardholder realizes that a wrongful purchase has been made and that their card has been compromised, they will contact their bank regarding the matter. Once the bank validates the claim, they begin the chargeback process which entails taking the credited amount from the merchant’s sponsoring bank account, plus an additional fee for failing to protect against fraudulent purchases. Chargebacks can also occur out of Friendly Fraud, a (quite unfriendly) common scam practice whereby someone is essentially shoplifting online by ordering a product and reporting their card as stolen, so they get to keep a product but not be charged for it while you get a chargeback fee. The way pre-authorization helps to avoid chargebacks as much as possible is thanks to the hold placed on the cardholder’s account before having to claim the funds as your own. Merchants can often take this time to validate a user’s card and look for any and all indicators of potential fraud from the cardholder’s end, such as: ❯❯ Suspiciously large bulk orders made by new customers; ❯❯ Consecutive multiple orders placed in the same short period of time; ❯❯ Different billing and shipping addresses; and/or ❯❯ Multiple orders under different cards that have the same shipping address.
without any additional fees. Note that pre-authorizing payments does not 100% protect your business from chargebacks, but it can drastically decrease them if fraud is detected in time. To be completely protected from chargebacks, consider integrating fraud protection solutions on your website, like Riskified, that validate credit cards on your behalf and cover any chargeback fees.
If the funds have not yet been claimed, the cardholder cannot file for a chargeback and the transaction can simply be canceled
3. Improve customer service Pre-authorizing payments builds trust and reassures security for customers by letting them
2. Avoid unnecessary fees Many credit card processors charge merchants refund and chargeback fees, not to mention regular interchange fees, also called merchant discount rates (MDR). When you preauthorize payments you avoid being charged fees until the payment is authorized and debited from the shopper’s credit card. This gives you a chance to confirm inventory before claiming the funds, for example, and save being charged with the discount rate if, for any reason, you cannot process the order from your end. As mentioned above, preauthorizations help protect against chargebacks in the case of a stolen credit card, which can therefore prevent any chargeback fees. In addition, in the event of a refund, you will not have to go through the actual refund process if the fees haven’t been claimed yet. Suppose you are out of inventory and cannot ship a customer their product. You can simply not claim the money on hold from their account and not have to incur any refund fees. This also applies to other cases of refund requests or order cancellations that occur within a few days of placing an order. Merchants are therefore only advised to claim the funds from cardholders’ accounts right after they ship the product, to minimize unnecessary fees like refunds and MDRs.
know that their card will not be charged until their order is shipped. Customers can get pretty frustrated when they place an order and pay for it, only to not get it delivered at all and be forced to refund the order. Pre-authorizing payments ensures otherwise, improving customer service and overall customer satisfaction. Pre-authorizing payments is also beneficial for customers when it comes to buyer’s remorse. The customer is able to cancel their order before the estimated shipping date should they need to, without you having to issue any refunds and incurring refund fees in the process. Setting up pre-authorizations Pre-authorizations are not complicated to set up and can be done through your e-commerce platform, depending on your credit card processor and whether or not it supports pre-authorizing payments. Websites like Shopify support pre-authorized payments and make the process of integrating this payment option easy and seamless. If you are not using an e-commerce platform, contact your web developer or integration specialist and let them know you wish to set up preauthorized credit card payments for your transactions. This precautionary practice will greatly benefit you as a merchant by enhancing your security, reducing chargebacks, increasing your bottom line and continuing to build a better user experience for your customers. By providing a safety net for you and your customers, you keep both ends happy and save yourself a lot of time (a.k.a. money) and effort when things go south. Dania Faidi is the digital media buyer for
L49DIGITAL, a mobile-first digital marketing agency located in Toronto. She specializes in writing web and SEO content and strategizes digital media buying plans. Dania can be reached via her email, dania@l49digital.com.
November 2017
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// 22
Payment Processing
Android Pay in Canada: A much-needed boost for mobile payments? Canada leads on contactless payments, but lags behind on mobile wallets on a global level. Will Android Pay change this? By Daniel Kornitzer
C
anadians love tapping their plastic. Contactless payments are a $30 billion industry. And penetration of contactless-enabled payment terminals here is one of the highest in the world. But when it comes to making the leap from contactless to mobile, progress is happening at a snail’s pace. Mobile wallet use currently hovers at around 33%, which means Canada lags behind not just global leaders China and India, but also countries with lower uptake such as the U.S. and Australia. In May 2017, Google launched Android Pay in Canada in collaboration with a number of partners including payment services provider, Paysafe. Canadian consumers can now use their Android smartphone to pay for purchases in-store and in-app at thousands of participating merchants. But can this new addition to the Canadian mobile payments landscape persuade more consumers to make the switch? And what will it mean for mobile wallet adoption in the broader context? A matter of convenience: Barriers to mobile payment adoption From a technological standpoint, the mobile wallet is the contactless card’s smarter sibling. Customers can link as many cards as they want and store them electronically in one place. They can pay for goods online in one click, without having to input their card details every time. And thanks to tokenization merchants receive a digital “token,” which stays encrypted, instead of the actual card number. Mobile wallets ❱ DMN.ca
tend to be far more secure than their plastic counterparts. So why have Canadians been reluctant to switch? Well, the answer is deceptively simple: many see no reason to do it. They’re yet to be persuaded that mobile wallets deliver a superior experience or meet a need that their contactless card can’t fulfill. So what can Android Pay offer that might convince them? Familiarity breeds comfort Several studies have shown that consumers tend to prefer familiarity. For instance, in a 2013 Nielsen Global Consumer Survey, 60% of respondents said they’d be more likely to try a new product if it was made by a brand they already knew. This makes a powerful case for Android Pay’s chances of success on the Canadian market. Fifty-nine per cent of smartphones in Canada run on the Android operating system, as opposed to 32% on Apple’s iOS. So, a majority of smartphone users already have a strong connection with the Android brand and they’re accustomed to the look and feel of its ecosystem. On launch day, Android Pay landed on their devices with almost no extra effort required. The sense of familiarity also extends to the level of infrastructural support. Within a week of launch, Android Pay supported three of Canada’s big five banks, as well as several regional and specialist institutions. At the same time—thanks to the popularity of contactless payments—eight out of 10 Canadian retailers have NFCenabled point of sale terminals, which means they can accept Android Pay in-store. November 2017
// 23
Payment Processing With so much of the groundwork in place, it’s not such a big leap for consumers to start tapping their phone instead of their card. However, familiarity on its own may not necessarily be sufficient. Consumers also have to be convinced mobile payments provide a better user experience. Speed and security—mobile payments’ competitive advantage As attempts at online financial fraud grow more organized and sophisticated, mobile wallets are increasingly pitting themselves against each other in a security arms race. And this is where they arguably have an edge. Contactless cards’ vulnerabilities are well-documented. As with any traditional chip-and-pin card, there’s the risk of the card number and other details falling into the wrong hands. Users don’t need to enter their PIN to complete a transaction, either. So an unauthorized person could potentially complete several fraudulent transactions undetected. By contrast, mobile wallet security is far superior. Not only are card details encrypted via tokenization, but there are also three other layers: ❯❯ Something the customer knows (such as a PIN or password); ❯❯ Something they have (their smartphone); and ❯❯ Something they are (biometric authentication). Admittedly, this added security has been somewhat of an Achilles’ heel; however, Android Pay has made an effort to tackle the issue by offering a choice of authentication methods. Fingerprint scan aside, Android Pay users can also authenticate payments using a retina scan, a PIN or a unique unlock-screen pattern. This should result in a speedier, smoother and therefore more appealing payment experience. Hi-tech for the non-tech savvy Having several authentication options is also significant for another reason. PINs and unlockscreen patterns don’t require the latest hi-tech smartphone. They also work on older and low-to-midtier handsets that lack biometric functionality. In short, a wider range of November 2017
consumers can use Android Pay. And this includes those who would otherwise be discouraged because they’d have to get an upgrade they don’t want. Final word: Mobile payments in the broader context While it’s too early to tell, there’s a compelling case for Android Pay to succeed in Canada. The country has a robust NFC-enabled payment infrastructure. Three of the largest national banks already support it, as do thousands of merchants. And Android is a familiar brand offering a faster, simpler and more secure payment method to a larger swathe of the population than ever before. But will this be enough to drive adoption? Asked what features they’d value most in a mobile wallet, according to RFi Group’s Global Payments Evolution Study 2017, 60% of respondents said it would be the ability to earn rewards, with 25% putting it as their first preference. Users in other parts of the world seem to share this attitude, too. So much so, that Apple Pay and Android Pay rival Samsung Pay launched its own rewards program, which it claims has led to a significant surge in active monthly users. So far, neither Apple Pay nor Android Pay have followed in Samsung Pay’s footsteps, either in Canada or elsewhere. However, when Canadian users pay with Android Pay they will earn the same points and rewards they would have by using the physical card. Seeing as 78% of Canadian adults’ credit cards earned rewards in 2016, this is a big deal. If it does become a determining factor in growing the number of Canadian users, it may be the proof of concept that will finally make mobile wallet uptake pick up steam around the globe. Daniel Kornitzer serves as EVP and chief product officer of Paysafe Group plc. Prior to re-joining the Group in 2014, he was CEO and Board Member of SiteSell.com. In his 20+ years in technology management, Daniel has pioneered groundbreaking initiatives, from one of the world’s first over-the-phone speech recognition systems and the ISO/ITU standards for video coding in use today, to FirePay’s digital wallet and industry-leading risk management processes, which resulted in his subsequent appointment as a member of the NACHA Risk Management Task Force.
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// 24
Date:
July 4, 2013
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// 26
Four steps to better donor segmentation By Luke Karmazin
N
ow that end-of-year giving is on almost every non-profits’ mind, it may seem like a bad idea to take on a large project like whipping your donor data into shape. Nearly a third of annual donations take place in December and that means sending reminders, securing major gifts and, often, very little sleep for dedicated fundraisers. However, the benefits to not just leveraging your data, but doing it during your year-end sprint can have an immediate payoff, not to mention a long-lasting impact on donor retention. 1. Pick the right software Nobody should still be managing any donor records in a spreadsheet. Whether you’re a solo operation or a large nonprofit, there are better systems for logging donations, communications and keeping track of your contacts’ demographic information. A basic CRM can be deployed fairly quickly, preventing embarrassing mistakes like following up with someone who has just made a donation. It will also help you prioritize outreach and see patterns like year-over-year donation increases; which can indicate an opportunity for a larger ask. If you’re already using a Blackbaud product or other CRM, it may be time to make a change. Switching before 2018 is unrealistic, but you should consider targeting January, when most non-profits are wading through receipts and records anyway. Salesforce and Raiser’s Edge can offer a number of options for creating and reporting donor records, going as deep as age and family relationships. Having fresh end-of-year records improves the consistency and detail of your data when you upgrade and that data will help you cultivate relationships throughout 2018. 2. Set aside your planned and major gift prospects Unless they’re earmarked for a specific project, major gifts tend to cluster near the end of the year. Interestingly, more donors make arrangements for future planned giving (either in their will or via annuity) around this time as well. Both planned and major gift prospects should be treated carefully, even excluded from normal year-end campaigns. Focus on tailored, personal communications and ensure they won’t be surprised by a direct mailer or voicemail from your call centre operation. Don’t think you have any major gift prospects? You may be surprised. Having convenient data like estimated income, donor age (or just their generation) and family relationships can make it easy to see who is worth reaching out to. If you can’t segment your donor list based on these characteristics, there’s no way to know who could be ready to make a large gift. Many non-profits offer more than one way to donate, but that often means your donor lists are split between multiple systems. Stop managing your monthly subscription donations in a separate system and include them in any lists of major or planned gift ❱ DMN.ca
prospects. It’s tempting to ignore those who have reliably given every month for years, sometimes even decades, but there’s a lot of data to suggest that subscription and planned givers fit the same profile and may overlap significantly. Which brings us to... 3. Determine your donor profiles Knowing what kinds of people respond to your cause will help you be a better fundraiser. You’ll be able to apply tested metrics to pick the right communications channel for each segment, find new prospects based on commonalities and implement consistent processes that maximize donor revenue. This might be easy if you’ve already got great, centralized donors records, but not every organization has that advantage. For those who have fragmented or unstandardized records, that itself can be a way to segment donors. These gaps tend to happen when staff or systems change, allowing for educated guesses about the donors in each ‘chunk’ based on your organization’s history and fundraising performance. You should still ask volunteers or staff to help fill in gaps when they talk to prospects, especially if they were involved when the fragmentation occurred and have insights to offer. 4. Know the trends After you’ve taken control of your data, the real question is what insights you can draw from it. Being able to build reports that highlight key donor categories allows you to make direct comparisons to some of the exciting research happening in the nonprofit world. Studies like the Case Foundation-backed Millennial Impact report can be a great way to start making datadriven decisions, and you’ll see real returns starting immediately. For instance, door-to-door and sidewalk fundraising are effective across generations, but they can irreparably damage your brand with Millennials, causing donor attrition over time. The trends within your own organization are just as important, so be sure to track how specific groups and demographics are changing. It’s easy to ignore smaller patterns when the bigger picture is promising, but can result in missed opportunities or worse, sudden changes in retention rate or average gift size. As we close out the year, pay attention to where most of your time is being spent. If you’re scrambling for phone numbers or not sure who to call first, it’s a sign that you need to be better prepared for next year’s giving season. Segmentation is more important as non-profits adapt to a changing landscape, and fundraisers have grown to rely on new streams of revenue, further complicating the way we track different kinds of donors. Modern fundraisers need to maximize every contribution—not just try to fill the gaps with fresh donors. Luke Karmazin leads marketing and public outreach at Shift CRM.
November 2017
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