Invest, invest, invest…

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Jon Kelly

Written by Wood for Trees Managing Director, Jon Kelly

There’s a lot of talk about the cost-of-living crisis at the moment and undoubtedly supporters are starting to have to cut back on their giving and make difficult decisions on how and where to give their support. Our own benchmarking data is showing the increase in lapsing supporters and difficulties in recruitment, and we’re also starting to see lower results from charity campaigns and appeals.

At times like this it’s obviously tempting, and on face value logical, to cut back on spending. Combined with the pressure of increased costs then it clearly makes sense?

But disinvestment now will lead to problems further down the line. It’s a well-known marketing adage that it’s cheaper to retain a customer (supporter) that acquire one. And any activity that doesn’t happen today will need to be made up later.

At Wood for Trees, we’ve seen time and again the results of reducing mailing volumes and cutting back on activity. This is often done to achieve greater ROIs but the affect is the same. The leaky bucket which is your supporter file will grow bigger holes and the tap that is filling it up will run dry. All this will lead to dwindling supporter files, further lapsed supporters, and a big hole to fill when the outlook gets better again. Supporters do keep giving through recessions and overall fundraising income tends to hold up fairly well, so if you’re not engaging with your supporters, then somebody else might be.

We know that it’s a difficult argument to make to keep that investment tap going but those charities that do continue to spend will reap the rewards later. And whilst it may be inevitable that some budgets will need to be cut keeping spend going as much as possible can still bear fruit.

Strange as it may seem we often see an upturn in spending on analytics when the going gets tough. Using your data to better understand your campaigns and supporters will help you make the right decisions on what and how much to cut.

We suggest two key things to be looking at:

Campaign response analysis – now is the time to really be looking at who responds to your communications and who doesn’t. Is it time to take a look at your selection segmentation? Going beyond standard RFV, or even building muti-variate propensity models, can reveal hidden pots of responsive supporters and allow you to cut volumes whilst retaining response levels.

Income forecasting – being able to accurately forecast your income based on different investment scenarios, and different levels of campaign performance, can also help show the longer term effects of reduced investment and give more confidence in the outcomes and benefits of continuing to spend.

We’re not by any means saying it’s easy and to just keep spending will not alone be the answer. But by being smarter you can continue to maintain good levels of income, engage and communicate with your supporters, and protect your supporter file from deteriorating as we navigate our way through the coming months.