BIG’s Blog: The Realization and the Opportunity – Part Two

The Opportunity
In my last blog, I used a recent article by Seth Godin wherein he is talking about changes in our commercial economy as it affects an individual’s job and the commercial sector they work in. Then I comment on what he says, but spin it around so that the perspective is on nonprofit fund raising.

Yesterday was “The Realization,” and today is “The Opportunity.”

Seth writes:

At the same time that our economic engines are faltering, something else is happening. Like all revolutions, it happens in fits and starts, without perfection, but it’s clearly happening.

The mass market is being replaced by multiple micro markets and the long tail of choice.

Google is connecting buyers and sellers over vaster distances, more efficiently and more cheaply than ever before.

Mike’s commentary:

When Seth is talking about “Our economic engines are faltering,” he is talking explicitly of the business models that commercial companies have used for the last 50+ years. But, this has direct application to today’s fund raising methodologies. If your organization depends on direct mail fund raising as a significant portion of your revenue stream and...if you haven’t noticed by now, that engine is faltering.

What will take direct mail's place? He answers that question by stating, “The mass market is being replaced by multiple micro markets and the long tail of choice,” followed by his last statement of, “Google is connecting buyers and sellers over vaster distances, more efficiently and more cheaply than ever before.”

The short answer is that the Internet will take direct mail's place. But, more particularly for fund raisers, the move is away from “mass market” mass direct mail that all looks alike and therefore presumes that all of the individuals that they are mailing to are the same. The shift is to an Internet methodology that connects to multiple micro constituencies via Google literally down to the individual making the decision to contact your organization. Did you know that today some of the largest consumer product companies that used to spend the biggest portion of their marketing budget on TV (mass market) now spend the biggest portion of their budget with Google et al on Search?

And finally, Seth writes about “the long tail of choice.” This is a key concept that has more to do with the shifting attitudes in the generations. Younger cohorts who grew up going to malls and knowing nothing but plenty of assortment and options expect choice even in ministries. The Internet opens them to the world.

Seth writes:

The exchange of information creates ever more value, while commodity products are ever cheaper. It takes fewer employees to generate more value, make more noise and impact more people.

Right before our eyes, a fundamentally different economy, with different players and different ways to add value is being built. What used to be an essential asset is worthless, while new attributes are both scarce and valuable.

Mike’s commentary:

There is a lot here I don’t want you to miss. This is very important. When Seth writes, “The exchange of information creates ever more value,” he is talking about the interactive capability of Web-based communications. A prospect reaches out to your organization and you respond to them via email, live chat or phone person-to-person. Real communication has just happened and you are quickly creating a relationship; a real human relationship.

Seth writes, “It takes fewer employees to generate more value, make more noise and impact more people.” Fewer people...more use of technology...impacting your donors' lives more directly and much less expensively.

Seth writes, “Right before our eyes, a fundamentally different economy, with different players...” This is the challenge to established fund raising organizations. Over the next decade, many of the long-established charities and their great work are at risk of disappearing. It is not that their work is not valuable, but that they will not be able to generate the revenue they need to sustain their ministry/mission. Look around your Development department. When you embrace the new dynamic of what this new Internet-based fund raising opportunity is about, your department will look different. It means new expertise and people doing new things. It also means fewer people.

In closing, let me just let you read how Seth closes his article. But, unlike the rest of his article which pertains more to the commercial economy, this closing could have been written for nonprofit fund raisers and the Opportunity that is before them.

In 1924, Walt Disney wrote a letter to Ub Iwerks. Walt was already in Hollywood and he wanted his old friend Ubbe to leave Kansas City and join him to build an animation studio. The last line of the letter said, “P.S. I wouldn’t live in KC now if you gave me the place–yep-you bet-Hooray for Hollywood.” And, just above, in larger letters, he scrawled, “Don’t hesitate-Do it now.”

It’s not 1924, and this isn’t Hollywood, but it is a revolution, and there’s a spot for you if you realize you’re capable of making a difference. Or, you could just be frustrated. Up to you.

-Mike

Welcome to BIG’s Blog and yes, by all means forward our blog to your friends and co-workers.