Understanding a complex multi-channel fundraising world
It used to be so simple. You sent out a mail pack, the supporter read it, picked up their cheque book and sent back a donation. Easy – there was a clearly-traceable link between a specific marketing action and the resulting donation. But things are becoming more and more complex in our multi-channel world, as new technologies deliver ever more inventive ways of asking and equally creative methods of responding. In essence, the ‘give’ does not always relate directly to the ‘ask’.
Read on, or see our Overview paper for more detail.
HOW TO MEASURE?
This is a phenomenon that we all recognise, but it seems many are still struggling with how we measure this. At a recent forum of charity fundraisers there was much discussion about multi-channel marketing and how to do it. I asked the audience how many were actually measuring the impact of their efforts. The answer was none. So on one hand we are readily embracing this brave new world in our activities but on the other, we’re not really sure how to measure the results.
The ‘traditional’ method – of adding source codes to the outbound communication so the inbound response could be identified – no longer gives the full picture. Many donations are now made online, so there is no direct way of linking back to the marketing stimulus that triggered them. Even where this is known, it’s a one-dimensional view – was it only the email that stimulated the response, or was it because that person had also seen a TV ad that week, seen a poster on the tube, and received a tweet from a friend mentioning the good work of the charity – or any combination of these influences? Attribution models can help to distribute some of the credit across multiple channels, but these generally only look at known activities (mail, email, web visits) rather than the fundraising environment as a whole, and are often based on gut feel and assumptions rather than any fact-based evidence.
The current spotlight on direct fundraising practices brings this issue into sharp relief: charities need to get smarter and more innovative in how they identify, reach and engage with/talk to their supporters. There will be increasing emphasis on using less intrusive methods to nurture supporters along a journey designed to generate engagement and value further down the line.
So what do we do about it? We need to look for new methods of evaluating our success. Econometrics (or market mix modelling) is a way of understanding these complex relationships, and how a combination of all your marketing activity, plus external factors, drives the income received by your charity across all products and channels. Retailers have been doing this for years: indeed they have always faced a similar challenge, namely that when somebody walks into their store to buy a loaf of bread they have no direct way of knowing what has driven that action. Similarly, it is time for charities to change the way they look at measuring fundraising performance.
A LEAP TO BETTER UNDERSTANDING
It is a big leap of faith – and requires a change in mind set – because the £15 cheque from Mrs Smith will no longer be attributed to any specific campaign or appeal. Gone will be the comfort blanket of appeal response rates and ROIs. But what will follow will be a revelation in understanding the true impact of many marketing activities, particularly those which are ‘hunters’ rather than ‘harvesters’. Each £ of income received by the charity will be attributed to a specific activity to build up to overall income, and in place of specific campaign analysis you will see organisation-level metrics showing payback and ROIs on activities (DM spend, TV spend, PR, Web Activity, etc) as a whole.
Jon Kelly, Strategic Analysis Director, Wood for Trees