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

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

The Realization
For regular readers of my blog, you know that one of the main themes that I watch and then blog about is the changing dynamic of digital communications and the Internet in society, especially as it applies to the fund raising work of Development departments of nonprofits. In fact, this is what Browne Innovation Group was founded to address.

If all was well with the world of fund raising, there would be no need for a consulting practice like BIG, dedicated to helping established nonprofit fund raising departments develop a new strategic plan to address these fundamental changes to our economy and in society that are reshaping “How” and “Where” we communicate with new and existing donors.

Recently, one of my favorite writers shared some thoughts that were both extremely insightful and practical to what all nonprofit fund raisers are seeing and dealing with today.

Over the next two blogs, I am going to use Seth Godin’s insights juxtaposed against how they translate to the problems that nonprofit fund raisers are facing. Seth lays out first, the Realization of this Fundamental Change and then shares the Opportunity that this Brave New Digital World opens up.

Seth writes:

It’s one thing to read about changes the Internet brought; it’s another to experience them. People who thought they had a valuable skill or degree have discovered that being an anonymous middleman doesn’t guarantee job security. Individuals who are trained to comply and follow instructions have discovered that the deal is over...and it isn’t their fault, because they’ve always done what they were told.

What’s actually happening is this: we’re realizing that the industrial revolution is fading. The 80-year long run that brought ever-increasing productivity (and along with it, well-paying jobs for an ever-expanding middle class) is ending.

It takes a long time for a generation to come around to significant revolutionary change. The newspaper business, the steel business, law firms, the car business, the record business, even computers...one by one, our industries are being turned upside down, and so quickly that it requires us to change faster than we’d like.

Mike’s commentary:

Change always comes faster than we’d like. But, the truth is that this change has been happening since the early to mid-90s. Remember, Amazon.com was founded in 1994 and their Web site went live in 1995. That was 16 years ago and Amazon changed retailing forever. Today, it isn’t just the fading recession that is keeping all those open spaces empty at your local mall. It’s the combination of people from the old economy jobs that are still out of work and hence not spending money and all the new online retail competition.

Yet fund raisers see this fundamental change going on around them, but, just like the newspapers, the steel companies, law firms, car dealers, the music business and computers – do you own an iPad yet? – the nonprofit fund raising world “as a whole” is slow to adapt to the digital Internet age. The implications of the Internet are going to start hitting fund raisers very soon and it may not be pretty for those that don’t actively seek to embrace it. And the fact that you have a Web site, send emails and e-newsletters, and arm your charitable gift officers with smartphones isn’t even close to enough. Just like the newspapers who still have readers, but have seen their number of advertisers decline, so too established nonprofit Development departments have donors, but are finding it tougher and tougher...and more expensive...to get new donors.

Seth writes:

I regularly hear from people who say, “Enough with this conceptual stuff; tell me how to get my factory moving, my day job replaced, my consistent paycheck restored ...” There’s an idea that somehow, if we just do things with more effort or skill, we can go back to the Brady Bunch and mass markets and mediocre products that pay off for years. It’s not an idea, though; it’s a myth.

For a while, politicians...promised that things would get back to normal. Those promises aren’t enough...and it’s clear to many that this might be the new normal. In fact, it is the new normal.

Tomorrow, the Opportunity.

-Mike

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BIG’s Blog: DRTV and Web Video

For those of you who read my Monday (04-25-11) blog, Gail’s blog yesterday was a great segue way--talking about DRTV (Direct Response TV) as a real potential adjunct to your current direct mail fund raising program.

Of course, in today’s world, you don’t just put video in paid broadcast like DRTV; the same video in different length versions can be on your Web site as well as emails with embedded links to YouTube.

In fact, you can build whole campaigns around DRTV, Web, and email with video, plus direct mail. Your direct mail fund raising team has lots of direct marketing expertise and it can be argued that all marketing in the digital age is direct marketing . . . so you direct mail marketers . . . start thinking about incorporating video!

Now, think of the most successful direct mail package you or your team has ever put together. Then, check out the below “successful” online video campaign appeal and then ask yourself, “Why can’t we do that?”

Water Changes Everything.

BTW, when I looked at this video I was visitor 49,178. What’s your number? Email me and let me know. I’ll share the numbers and we can see what viral videos are all about.

-Mike

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BIG's Blog: Have you considered DRTV?

I recently attended the Direct Marketing Association of Washington's monthly luncheon on Using DRTV to Affordably Increase Response from ALL of Your Media. Ron Guberman, President of Media Reactions, Inc., gave a persuasive presentation on why DRTV should be a part of your marketing/fundraising strategy.

Ron spoke to the fears that hold most organizations back from testing DRTV in their strategy. The list included:

• Initial costs too high
• Threshold too high in TV as well as risks
• The ability to work with new media (daunting)
• Concerns on the ROI

Ron addressed the myth about the high cost and stated that this is no longer true. The costs to create an ad can be less than $10,000 by using existing photos, voiceovers and other resources.

Using DRTV allows you to show and tell the audience about your mission. But, the presentation must be: compelling, persuasive, impressive, engaging and delivered with high fidelity. Incorporating these touch points effectively will influence the behavior of the audience: your prospective constituent.

So, what is stopping your organization from testing DRTV in you marketing plan? The concerns about ROI can be put to rest. The analytics that monitor both Web and inbound calls are extensive.

I would suggest that if you have not considered DRTV because of fear that you should consider speaking to the experts in this industry. The nonprofit and profit examples presented were compelling.

My take away from this event is: Let the experts do their job and your organization’s mission will reap the benefits.

-Gail

BIG’s Blog: The Post Office Closes Tomorrow

Any of you still listen a lot to commercial radio? Do they still do those interruptions for the Emergency Broadcast System or was that a relic of the Cold War? What I particularly hate about those interruptions is the obnoxious noise blast in the middle followed by the guy saying, “This has been a test of the Emergency Broadcast System; if this had been a real emergency etc., etc.”

I reference those radio interruptions with the obnoxious noise so that, in your mind, you will hear that obnoxious noise after you read, “My headline is Fiction; My headline is fiction.” We don’t want panic here.

The headline in the newspaper and online is, "The Post Office Closes Tomorrow." The money losing ($7.8 billion last year) U. S. Postal Service succumbs to the Tea Party-inspired Federal budget cutting new attitude among law makers to stop funding multi-billion dollar deficits to money losing, quasi-governmental entities. Let’s also pretend they de-fund Planned Parenthood just for good measure.

What’s your first move after coming out of a hastily called Board/Council phone conference where you have assured the Board/Council that the sky is not falling, even though you personally are wondering whether it is?

There is an old saying, “Nothing focuses the mind like running out of money.”

So, there is the scenario. The USPS has announced its closing since the congress refuses to continue to fund its losses. What is your first move to continue to generate donations?

That’s it.

I don’t know how you process emergencies in your mind but that specter is what I want you to take the next ten seconds, ten minutes or ten hours thinking about as reality today.

You never know; you may be well served by having thought about this scenario even if it’s only for ten seconds.

-Mike

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BIG’s Blog: Competition in Fund Raising

Do you believe that fund raising is competitive?

As recently as 1997, the Internal Revenue Service listed 690,000 nonprofit corporations or foundations. By 2010, the number was over 1.5 million. And, of course, this 1.5 million doesn’t include all of the unincorporated local organizations that raise money.

With or without competition, what is the key metric typically sited for fund raisers? Most boards or councils would say that the number one metric is, "Did you raise more revenue than last year?" All the fund raising ways and means still focus on this one key metric.

But, focusing on that metric without getting into the numbers and information below the numbers puts the organization at great risk for the future.

We can probably assume that most of the donors giving to your organization also give to other nonprofit organizations. The question for today is, "How many of your donors would consider your organization in their Top Five of organizations they regularly give to?" "The Top Three?" "The Top Two?"

How many of you know the donor's names who consider your organization their #1?

How many stories have we all heard of the donor that regularly gave ten or twenty dollars a year for years and years and then left a bequest of a million dollars or more?

How do you know if you don’t ask?

Exactly!

-Mike

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BIG's Blog: Changing Technology – It’s not going away!

An interesting article was posted on April 11, 2011 by McKinsey Quarterly on Internet standards and mobile technology. The article focused on the changing technology and the role it plays within industries and organizations.

The article addressed a new concept defined as Web-centricty. Though a future concept, this is an example of how technology is changing at a fast pace.

At a recent fundraising conference, a speaker made the statement that direct mail, email, telemarketing and web are “old technology” and Facebook, Twitter and more are the “here and now.” To some organizations in attendance, that statement was a scary thought. If this is true, the question is, “How does a nonprofit with limited resources compete with the 1.5 million nonprofits in the US today?”

For starters, let’s look at current staff. Does your organization have the personnel with the skill set to address these new forms of communication? Do you know what skills sets are needed to address the technology?

Take the time to review your current personnel and their skill sets. Make sure data analytics as well as programming abilities are included in the review. Get outside help from the experts if you are uncomfortable in dealing with the technology.

The reality is that new technology is not going to go away.

-Gail

BIG’s Blog: Is This the End of Email?

Last week, an article’s headline caught my eye: "Is This the End of Email?"

I try to keep up with a lot of writers, blogs and other publications to see if what they are wrting about has relevance to fund raising. So, when this headline caught my eye out of all of the articles that I was looking at that day, I couldn’t resist teasing you with the same headline.

The author, Jeanniey Mullen, starts out telling about her work life before email . . . which many of us can relate to . . . and then walks us through her career and the impact email had both on her personally and her jobs. But, then she takes it to another level by . . .

Wait a minute; you just need to read the article yourself.

Is This the End of Email?

-Mike

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BIG's Blog: The Challenges of Integrating Technology

“There are so many channels in today’s environment and all organizations need to take advantage of integrating them. You need to move quickly and master campaign integrations today because they’ll change tomorrow.” This statement was made to me by the vice president of a Christian organization about our changing world.

Continuing our discussion from yesterday’s blog on trends that affect nonprofits the most; if nonprofits don’t learn how to integrate technology quickly, it will be a challenge to keep donor's attention on our missions.

Today, people go to the Internet for everything: pay bills, search for a vacation, buy a book or find a friend. The list goes on. When and how will your organization reach out to this growing audience?

But, how does one go about “moving quickly” into the use of this technology when that is not the culture of the organization? The answers:

• Have a plan
• Hold internal discussions about the direction to manage expectations
• Seek out guidance in areas where it is needed

Technology is changing the way nonprofits communicate with their donors. But, that has always been true. I remember, in the early 90s, training religious staff to use personal computers. New technology provided this organization with the ability to thank donors the next day and have real-time access to their data. This was new technology back then.

To make this story short, the week-long training was extremely difficult for staff. Before leaving their office I explained to the executive director that it would take three months before staff would learn to adapt to this change.

After an angry call from the president, a second week-long training session and numerous phone calls walking staff through the new processes, things finally began to settle down. The staff overcame their fear and began to understand the value of this new technology. Six months later, I received a gift from this organization. I laughed when I opened the card. Inside it said, “We should have trusted you.”

Integrating technology can be challenging for staff. But, there are ways to make this change go smoother. In upcoming blogs, I will present ideas for you to consider.

-Gail

BIG’s Blog: Fast Changing World

When you hear people talking about the “fast changing world” (whether it is me writing about it in some of my blogs, or others) while one person may not be able to pinpoint all the changes that are affecting them, nonetheless, they feel it and know it’s real.

In the fund raising world, the three societal areas that affect our industry the most are: 1) Generational shifts, 2) Information technology coupled with the rise of the Internet, and 3) The rise of competition for the donor dollar.

There is so much to say about each of these topics. For fund raisers who are looking at the declining effectiveness and profitability of their large and long-tenured direct mail fund raising programs, these are the three crucial societal catalysts that are driving that change.

More to come . . .

-Mike

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