A MULTI-CHANNEL STRATEGY TO SAVE YOUR ANNUAL GIVING PROGRAM WHITEPAPER

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1 A MULTI-CHANNEL STRATEGY TO SAVE YOUR ANNUAL GIVING PROGRAM WHITEPAPER

2 A MULTI-CHANNEL STRATEGY TO SAVE YOUR ANNUAL GIVING PROGRAM. A MULTI-CHANNEL STRATEGY TO SAVE YOUR ANNUAL GIVING PROGRAM wwworking Hard for Limited Results Annual giving teams around the country are noticing that they are working harder for the same, or slightly diminished results. In the rapidly changing annual giving environment, the traditional playbook is no longer delivering the results that teams have come to expect. Historically, phone programs were at the heart of annual giving strategy. However, most annual giving shops have recorded a decline in phone s effectiveness as an outreach channel. To make up for the loss of dollars and donors coming in via phone solicitation, annual giving teams have spent years testing new outreach methods such as web, , crowdfunding, and day-of-giving. If your shop is like most annual giving teams, you have seen successes with these emerging channels, but have not yet found any one outreach channel to be a clear successor to phone. As the search continues, annual giving teams risk becoming distracted from big-picture strategy by the effort needed to plan, test, and execute these isolated new outreach methods. In the long-term, continually testing new strategies will begin to affect annual giving ROI. A New Way to Think About Annual Giving Strategy Forward-thinking annual giving professionals are looking for a way to mitigate the risk of relying on single channels to deliver the bulk of their dollars and donors. They ve realized that today s most effective donor outreach strategies are not siloed by channel as they were in the past. Teams are now striving to align their internal organization and processes around a strategy that maximizes their ability to reach donors regardless of outreach channel. Mass-Producing the Personalized Touch Annual giving teams have long known that a personal appeal is the most effective way to find and retain donors. The direct, personal connection prospects make with student callers is one of the reasons for phone s historic strength as a channel. To cut through the competition, annual giving needs to find a way to harness the effectiveness of a personal approach, but repackage and scale it across channel type. New Research to Help You Get the Annual Giving Results You Need Reeher researched channel effectiveness and donor outreach trends to better understand the value of a multichannel, personalized annual giving strategy. We ll delve into the data to show you how this approach will help you cut through the noise to improve your participation rates and donor retention, as well as increase the dollars you ll be able to bring in. We ll be covering: YYChannel Effectiveness: Winners & Losers YYThe Evidence Speaks: Other Channels Have Not Been Able to Replace Phone YYSiloed Channels Are Failing: A Multichannel Strategy Reaches Donors YYDonors Aren t Loyal to Channels: Offer Them Choices YYThe Cutting Edge: Optimizing Your Channel Sequences YYContacting Prospects When You Are Able To vs. Contacting Them at the Right Time Y Y The New Way: Recapturing the Magic of a Personto-Person Approach 1

3 About the Research For this research paper, Reeher analyzed a subset of data from institutions in the Reeher Community for an in-depth look into annual giving trends. The Reeher Community is made up of more than 130 higher education institutions with a total of 35 million donor constituents and 138 million donor database transactions loaded nightly. These institutions include public and private colleges and universities whose programs raise anywhere between $5 million to more than $500 million in private donations per year. wwchannel Effectiveness: Winners & Losers It s no secret that annual giving teams around the country are questioning the effectiveness of traditional outreach channels. Many wonder whether their expensive phone and direct mail programs are worth it when compared to inexpensive digital outreach. We compared donors preference between phone, direct mail and web to learn about the effectiveness of these popular channels. Donors Increasingly Don t Respond to Phone Calls Reeher research backs up what annual giving teams are noticing with their phone programs. Donor preferences are shifting away from traditional phone solicitation. Once the most powerful channel for converting donors, phone s performance has taken a nosedive over the last decade. By 2022, Reeher expects phone s effectiveness to have declined 30% since Direct Mail and Web are Growing Phone s channel effectiveness is trending downward, but direct mail and web are growing. Direct mail has already supplanted phone in effectiveness. Web methods are predicted to follow by These two channels will be viable, growing areas for the foreseeable future. PHONE CALLS ACTUAL FORECAST 50% 45% 40% 35% 30% 25% DIRECT MAIL 20% 15% 10% WEB METHODS 5% % 2

4 wwthe Evidence Speaks: Other Channels Have Not Been Able to Replace Phone Historically, phone programs helped annual giving teams form immediate person-to-person connections with prospects. Once the agent was able to make a meaningful connection, a donation followed. Phone s highquality, personal nature is what made it an integral component of annual giving strategy. Its declining effectiveness has meant annual giving teams have lost out on the power of a direct, personto-person appeal. No one channel has stepped up to fill the void PHONE CROWD FUNDING EVENT SOCIAL MEDIA Despite the rise of crowdfunding, event and social media-driven giving, no single channel has emerged to replace the effectiveness of a phone program when it was in its heyday. For the average institution, phone s declining effectiveness has resulted in a loss of more than 3000 donors over the past 10 years. To see if these donors were being replaced, Reeher calculated the average number of donors coming into Reeher Community institutions by newer channels. Despite the rise of crowdfunding, event and social media-driven giving, no single channel has emerged to replace the effectiveness of a phone program when it was in its heyday. Annual giving professionals need to consider additional factors beyond finding a new channel to replace the donors lost via phone. wwsiloed Channels Are Failing: A Multi-Channel Strategy Reaches Donors Traditionally, annual giving teams have worked in siloed channels. Outreach strategies via phone, , direct mail, web, crowdfunding and other initiatives are largely isolated from one another and often managed by different staff. This strategy is extremely efficient at maximizing the effectiveness of each individual channel, but makes it limits the team s ability to maximize an outreach strategy across channel type. Engaged, interested donors are slipping through the cracks and teams struggle to meet their goals. Coordinating a Multi-Channel Approach A coordinated multi-channel approach helps you cut through the noise and reach donors at the right moment and through the right channel. By putting the donor experience first, annual giving teams are able to increase the effectiveness of their efforts. Instead of working to outperform one another, each channel works together to deliver a cohesive message and capture donor attention. As this strategy matures, timing and channel sequencing can be personalized to best resonate with individuals or groups of donor types. 3

5 wwdonors Aren t Loyal to Channels: Offer Them Choices As teams work to retain donors, a multi-channel strategy becomes more and more important. Reeher researched donors who gave more than once and found that donors are not loyal to one channel as they continue to give. After their first gift, donors become increasingly more likely to give a subsequent gift after receiving an appeal from an alternate channel. By the time a donor has given 5 times, 58.8% of them have given through more than one channel. Repeat donors aren t loyal to channels. The more times they give, the more likely it becomes they will give through a different channel than before. 100% 1% 28% 7% 38% 1% 11% 42% 3% 14% 42% 4 CHANNELS 3 CHANNELS 2 CHANNELS 1 CHANNEL 50% 71% 55% 46% 41% 0% 2 ND TIME DONORS 3 RD TIME DONORS 4 TH TIME DONORS 5 TH TIME DONORS A One-Channel Strategy Jeopardizes Retention Since donors are not loyal to channels, if you rely exclusively on one tried-and-true channel to reach them, you run the risk of missing out on their repeat donations. A multi-channel approach mitigates this risk by coherently presenting your messaging through a variety of channels. When presented with consistent messaging across multiple channels, repeat donors have an increased likelihood of responding to the channel and the timing that best appeals to them. wwthe Cutting Edge: Optimizing Your Channel Sequences As Reeher conducted research on channel effectiveness, we also examined how multi-channel approaches compare single channel strategies. After looking at the data, it quickly became clear that multi-channel strategies outperform appeals sent only using one channel. Among prospects who were contacted three times using mail, , and phone, the multi-channel approach proved more likely to end in a donation than three appeals through one single channel. The research demonstrates a multi-channel approach s greater response rate when compared to the response rates of single channel approaches. Experimenting with different sequences of appeals and varying your appeal type will help you reach the right donors through the right medium. As more and more annual giving programs begin to track and optimize their channel sequences, the best sequencing recipes will emerge. 4

6 wwcontacting Prospects When You Are Able vs. When the Time is Right Traditionally annual giving teams rely on time-consuming, manual segmentation strategies. Donors are contacted at the same time as everyone else in their segment regardless of past giving anniversary or other factors. Despite all the hard work involved, segmentation does nothing to ensure that prospects are contacted at the moment they are most likely to donate. Top prospects slip through the cracks depending on how the segments are chosen. When donors are contacted too frequently, not frequently enough, or just after a their most recent donation they may slip away as well. Donation Anniversary: The Right Moment to Send the Appeal Soliciting a donation to coincide with a donation anniversary date dramatically improves response rates. Reeher research data demonstrates donors prefer to renew their contribution in a narrow window around their donation anniversary. Tracking donor anniversaries and focusing your multi-channel communication efforts during this time is an important way to improve repeat donor metrics and ultimately be the most effective with your time and money. 40% 30% 20% 10% 0% Donors are most responsive when the appeal is made during their donation anniversary month. wwthe New Way: Recapture the Magic of a Person-to-Person Approach You can no longer rely on phone alone to drive large numbers of donations. However, you can distill its unique, personto-person appeal and use it to enhance the effectiveness of your multi-channel strategy. For example, if your institution employs student gift officers, have the same student who makes the phone call to a certain group of donors be the same person sending the s these donors receive. Connecting a student name and story across channel types helps reinforce to donors the direct, personal impact of their donation and provides them with a sense of continuity. Schools have also experimented with content and storytelling that delves deep into the personal experiences of a student, or a group of students. Institutions have long known that direct, hyper-focused stories help donors form a personal connection that spurs their gift. This strategy can be expanded to bridge multiple channels so that when a donor hears from you by direct mail, , phone, SMS or more, they re getting a continuation of a personal story. 5

7 wwthe Take Away: A Multi-Channel Approach Disrupts the Annual Giving Status Quo A multi-channel approach means more dollars and donors in the door, but it demands an incredible shift in annual giving strategy and execution. By leveraging your donor data and orchestrating messaging and delivery across multiple channels, you will be able to reverse the trends that cap annual giving s ability to raise dollars and gain donors. To come to this conclusion, we studied: YYChannel Effectiveness: Winners & Losers YYThe Evidence Speaks: Other Channels Have Not Been Able to Replace Phone YYSiloed Channels Are Failing: A Multichannel Strategy Reaches Donors YYDonors Aren t Loyal to Channels: Offer Them Choices YYThe Cutting Edge: Optimizing Your Channel Sequences YYContacting Prospects When You Are Able To vs. Contacting Them at the Right Time A true multi-channel strategy is an incredibly complex undertaking and will be different for each institution that takes it on. Reeher can help you with the difficult project management. Reach out to info@reeher.com to learn more about the tools, processes, and research that will help you transform the effectiveness of your annual giving program. 6

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