Your top 3 burning questions — answered, Part 2

In Digital, Featured by Scott VanderLey

In my work with charities, I hear a lot of questions. Many seem to come up over and over again. And some I would describe as “burning questions” — the kind that keep nonprofit professionals up at night.

This is the second in our burning questions series — and my best shot at an answer:

QUESTION:

If digital is the future of donor acquisition, why are my new donor counts declining?

This issue currently bedevils the industry — you need only spend a few moments with Blackbaud’s latest set of benchmarking studies to see it. You’re rapidly growing your digital investment, with donor acquisition as your leading objective, and yet donor acquisition as a whole is trending toward the negative. What gives?

ANSWER:

The simple answer is that donor counts are declining because digital acquisition costs more on average than DM acquisition, and because digitally acquired donors are typically worth far more than those acquired through mail — two to three times more, in many cases.

So, fewer donors provide greater support. Value versus volume.

But there’s more to it than that. Digital works differently from list-based mail. With mail, you run acquisition with one set of lists, and cultivation with another. Different campaigns, different metrics. Nice and tidy. And lead generation is, in a way, built into the model.

We repeatedly send our mailings to continuation lists, with the understanding that it usually requires multiple touches to activate a new donor. (Moreover, that first gift from a DM donor is arguably a warm lead, since it has negative value if a second gift never occurs.)

There are some areas of digital — notably Facebook and email marketing — where lists can be similarly targeted. This, in my opinion, is one of the reasons Facebook has been so productive for nonprofit acquisition. It fits our existing model fairly well.

But digital as a whole is not a list-based medium. When you activate the whole array of digital marketing tactics — display, native, search — you enter a new reality. Lead generation, acquisition, AND cultivation will occur within the same media campaigns, leading to donors who are many times more valuable than the donors you had before.

But your metrics will get all scrambled as a result. Money you may have earmarked for acquisition will be doing triple duty. And it will appear that digital acquisition is failing you. But, to use a scriptural analogy, the wine’s not the problem. It’s the wineskin.

We need models that fit how digital really works. Our bifurcated, DM-centric growth model will no longer suffice.

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Well, that’s two down, one more to go. Join me next time as we dive into another of your burning questions.

(Read part 1 in the series.)