Wednesday, April 18, 2012

What brand is your thank you?

In a fit of fundraising heresy I posted this question on Linked In last week:
Does saying thank you really make a difference? Do you know of a research study that proves that thanking donors will lead to further or increased donations?
There was some method to my madness. I had just read the findings of a study conducted for AFP Canada by Ipsos Reid, entitled, “What Canadian Donors Want.” One of the conclusions reported was:
"Less than half agreed with the statement that not receiving a thank-­you message would decrease their likelihood of giving in the future (14% strongly agree, 31% somewhat). Fifty-­two percent disagreed with the statement (30% somewhat disagree, 22% strongly disagree)."
Stripping away the confusing double negatives, it tells us that 52% said that not receiving a thank you would not decrease the likelihood of giving in the future.  That seemed to fly in the face of fundraising fundamentals.

Being a proponent of data based decision-making, I decided to see if in fact there was research that could confirm the efficacy of thanking donors.

So, I contacted some industry experts and I posted my question. I received a number of interesting responses although none of them could point to studies that directly confirm that thanking donors will lead to improved results.

I was directed to research conducted by Penelope Burk that indicates donors say they will give again if they receive:

1. prompt, meaningful acknowledgment of their gifts
2. reassurance that their gifts will be directed as donors intend
3. meaningful results on their gifts at work, before they are asked for another contribution

But that speaks to intent and not actual results and in addition, the "prompt, meaningful response" was only one of three requirements.

There is interesting research at Donor Voice that shows that a significant number of donors feel that a gift should be acknowledged within two weeks. But that speaks to timeliness. Interestingly, 54% of donors said it didn’t matter how long a charity should take to say thank you. It occurs to me that’s pretty close to saying it doesn’t matter whether they say thank you at all.

Some seemed to feel that the answer to my question was immaterial. For example:
"Why would it matter? You are going to thank them because it's the right thing to do, anyway, so what difference does it make?"
Others responded more rhetorically and one of those responses unwittingly addressed what I believe is the core of the issue. Here’s what he said:
"Is there really a reason to consider not thanking a donor? If we found out it doesn't make a difference, how do we change our behavior?"
Well, maybe the AFP study has told us that it isn’t making a difference and that yes, we need to change our behaviour. I believe the research may indicate that donors have become cynical about “canned” thank you letters and emails. Perhaps they are saying that no thank you is better than a clearly automated thank you.

In commenting on the research that he presents at Donor Voice, Kevin Schulman says, “there are in fact a lot of donors who don’t care about the acknowledgment." He also speculates that there may be a segment of donors who are “annoyed by the constant stream of thank you’s” And then he addresses what I believe is the crux of the issue. He says, “… I’d further guess this is about … the way the acknowledgement is done.”

In the same way that organizations have to break away from the clutter to compete for donated dollars, they have to make sure that their acknowledgments also stand out. Thanking a donor just because it’s the right thing to do may be a wasted opportunity. If branding helps get the gift in the first place than the thank you ought to reflect that branding. The thank you is part of the brand experience and organizations should give a lot of thought to expressing gratitude in a way that is brand-consistent. This may include considerations like:
  • the voice in which the thank you is written
  • the design of the thank you
  • content that accompanies the thank you
  • the medium that is used for thank you
  • who says thank you
I’d bet that organizations that give serious thought to the experience of being thanked see a great lift in gift frequency and amounts.

The last thing that organizations want is donors who say "no thanks" to being thanked.

I’d love to hear what others have to say on this and in particular would like to see some great examples of well branded thank you’s.

 

10 comments:

  1. Great post! Very thoughtful. I continue to believe that thanking is the beginning of donor retention and is equally important to the 'ask'. Anecdotal or not, experience bears this out over and over. You've nailed it with the concept of branding. Yes! The thank you must re-enforce for the donor that they made a good decision. If they simply receive a canned thank you, then they feel... meh... not too connected. They might gift again. They might not. I doubt they'd give significantly more.

    One of my favorite examples is in Penelope Burk's book. I don't have it in front of me, but I recall it was for an Alzheimer's Group. The first line of the thank you was along these lines:

    You remembered, because they couldn't. Thank you.

    Powerful!

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  2. Thanks for your comments Claire. Please feel free to share the post. And thanks for originally directing me to some of Penelope's work. If brand is the sum of the experiences that one has with an organization, then every interaction with a donor is worthy of thought. Looking forward to more discussions.

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  3. Chuck,I agree that studies based on intended behavior are not as scientifically sound as those based on past actions. Regardless of what the data shows, sending a thank you for a donation should not be negotiable.

    What message would nonprofits send if they accepted funds without any acknowledgement at all? Saying thanks is not only a show of common courtesy, it's another communications touchpoint. Keeping the cause top-of-mind, with frequency, can only increase brand awareness.

    Besides, in some cases, what donors say and do can be two different things. I remember reading a past study that indicated donors being annoyed when organization newsletters included another "ask" and remittance envelope. Yet, in spite of the sentiments, response rates increased.

    The luncheon speaker at my recent AFP chapter meeting advised fundraisers to make personal contact with donors by calling them on the telephone. No voicemails; real conversations. In his experience, the one-to-one contact increased brand loyalty.

    Rather than studying whether nonprofits should thank donors, maybe we need to study what their preferences are based on the many ways that organizations have already thanked them.

    Good post!

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  4. Chuck, I can't imagine not thanking a donor. I recently blogged about donor appreciation and some creative ways to thank your donors that go beyond the usual letter. Nonprofit organizations need to communicate with their donors all year round in ways in which they are not asking for money. A thank you letter is a start, followed by newsletters and other updates. Of course, people can always opt out of these if they choose.

    Good post! A lot of people are talking about this.

    Ann

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    1. Elaine & Ann,

      Thanks for taking the time to comment.

      I clearly understand that any contemplation of not thanking donors - whether for research or other purposes – is at best challenging and may in fact be foolish. On the other hand we cannot ignore data that tells us that the giving behaviour of 52% of donors will likely not change if they are not thanked. I also don't think that we can read into it conclusions that happen to be easier to align with conventional wisdom. The challenge is to look seriously at the way we are thanking donors and be prepared to make changes.

      Elaine, rather than studying preferences, I'd like to study giving patterns. Perhaps that's what you meant.

      Glad to hear that a lot of people are talking about this. I think its a healthy process.

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  5. Hi,

    I've been in the fundraising space for under a year, but in Integrated and CRM for many more - so forgive any naivity in the following:

    *I think that answers to this question lie in donor relationship context
    * Is this a question of a "thank you" following initial acquisition/first gift, or does it relate to all subsequent appeal giving?
    * Would most respondents to this question apply it to the context of their EXISTING giving relationships?
    * I'd suggest all initial gifts should be acknowledged, on the basis we don't have any giving pattern or stated preference to guide us.
    * It would be a brave organisation that decided to measure the effect of dropping acquisition "thank yous" without establishing or maintaining a further communication to gather donors' explicit relationship preferences.
    * Is there an assumption within "52% would not change their giving if they were not thanked" that those people nonetheless still want some kind of visibility to where their gifts are going, and what they are doing?
    * If nothing else, the Donor Commitment Score developed by DonorVoice suggests that the common courtesies of any human relationship should be instigated in the first instance.
    * At a personal relationship level, do we tend to explicitly thank someone - i.e. with a "go out of your way", dedicated communication - every time someone does us a good turn?
    * With that in mind, beyond an initial acquisition "thank you", is thanking within the subsequent update as/more appropriate than a dedicated "thank you"? Is it less awkward, does it demonstrate both frugality and gratitude? Does that update provide a better context to expand on our thanks with a demonstration of effectiveness?
    * Should we consider the possibility that when someone donates, they may also be saying "thank you" to/for our works - i.e. if we've demonstrated how we make a difference, and then made a further ask, is the donor gift acknowledgement or thanks?

    All of this requires disciplined testing, but it's legitimate to question issuing dedicated "thank you" communication for every appeal response from a given donor.

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    1. David, you raise some interesting points and I agree that it would take a brave organization to consciously not thank first-time donors. Your last point is really interesting. Conventional fundraising training often makes the point that a solicitor is not asking for something but rather is offering the potential donor the opportunity to make a difference. That may demand the question of who should be thanking whom.

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    2. The following was posted by Sean Triner. While his corrections managed to appear, the original comment didn't. It's fascinating:

      First: A definition - for the purpose of this comment, when I say 'not thanking' I mean not sending a stand alone thank you without an ask. I am not saying never say thank you in appeals or other communications.

      Long term cohort data testing, that is not US based, is really hard to come by to prove whether your should thank or not. Also, the US data I have seen (which proves that from a mass direct mail point of view, there simply is no point or gain sending separate thank yous) does not come with enough evidence of what those charities are doing about bequests/legacies or major donors.

      In the US, incredibly cheap print, list purchase, postage and mailhouse costs mean that to some extent, some charities dont need to worry about anything other than mail, mail and mail again.

      However, here in Australia, it costs up to three times as much than in the US to get a mailpack in the post, and charities with unlimited budgets would still struggle to find enough people to mail to run programs with 300,000 donors. So it is difficult for charities to rely on just 'big DM'.

      Consequently, I think both sides of the argument here are correct. A hybrid approach is needed, which is based on the best evidence you can get - direct, measurable from the DM program and anecdotal, specific examples from major donor / bequest relationship fundraising approaches.

      Here is a real case study.

      A charity I have been working with over the past few years embarked on a mass donor acquisition program, using premiums, which has added 29k premium donors in six acquisition mailings, averaging around 4% or so from cold, bought lists. They have acquired those donors at slight profit (which is awesome).

      Premium mailings tend to get a very 'flat' Pareto return - in other words it takes much more than 20% of people to donate 80% of the income. Even so, 962 donors (3.3%) gave 20% of the income, around $220k. So these top 3.3% of donors gave an average of $220 as compared to the rest, who gave $880k - an average of $31 each. The overall average was $38. (NB - that stat alone show the danger of only really considering mean average donations).

      So, in terms of thanking, the US data indicates to me that the charity should probably not bother thanking about 28k of the 29k new donors.

      I utterly disagree with people that thanking is a moral obligation - if there is evidence that doing so will decrease the total charity net income, then the moral obligation is NOT to thank. You are not employed to be nice, you are employed to maximise your charity net income in the long term.

      In the absence of holistic, empirical data with an understanding of the context is seems to me that common sense kicks in. To be honest, for this charity I imagine it is marginal whether you should thank those 28k donors or not. My advice will be to test that over at least a year, maybe no thank yous to one cohort, normal thank yous to another and the final one with thank yous with asks in them.

      However, for the other 962 donors, it seems that thanking should be a matter of course, including phone calls and visits where appropriate. Our research shows that bequests from donors are most likely to come from higher value donors who do feel they have a relationship with the charity, as do higher value donations. Thanking helps create occasions for major donor and bequest people to begin relationships with these high value donors and there is tons of evidence that personal, one to one relationships with high value donors and bequest prospects is worth.

      My common sense conclusion is that many of the ideas, and certainly the spirit of apprach portrayed in Relationship Fundraising in the early 90s are completely justified with enough anecdotal evidence for high value donors.

      But, like you, I am not convinced either way on the other 95% of donors.

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  6. Correction:

    "...bequests from donors are most likely to come from higher value donors ..."
    should say
    "...higher value donors are more likely to write a charity into their will..."
    It was incorrect because whilst the % of them is higher, the absolute number of bequests from higher value donors is lower.

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  7. The common sense and best practices most fundraisers follow, while common, are often not the best. There is very little research and empirical data to support most of what is recommended to do. I have often and repeatedly found value in breaking from fundraising tradition to go beyond best practices.

    Finding that thank you letters do not increase the rate of giving would not surprise me. On the other hand, there are business studies that show that asking customers what they want is a bad predictor of what their true needs and buying motivations. In short, customers do not know why they behave the way they do. I expect the same is true of donors and their own motivations.

    While an intriguing finding, fundraiser beware when interpreting and using any findings from studies. The real answer is often much more complex than a single study can reveal.

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