You’ve heard this quote, attributed to American department store magnate and later Postmaster General for the US Postal Service, John Wanamaker:
“Half my advertising spend is wasted; the trouble is, I don’t know which half.”
A pretty amazing insight.
And yet he was thunderingly wrong.
In advertising, a whole heck of a lot more than half of your money is wasted. It’s more like 80% or worse that goes to waste. That’s the bad news.
The good news is Wanamaker was also wrong about not knowing which half of your money is wasted. There’s a way to get a clear picture of that.
You find out how your spending is going by using direct response marketing. When you use measurable direct response, you quickly learn which half of your money is going to waste. And direct response is how we raise funds.
Because fundraising is built on direct response, we aren’t playing “pin the tail on the donkey.” We know — at least in a general sense — where not to spend our money.
At the very top level, a great way to think about this comes from a presentation by Al Clayton. He places the entire population of the world into three groups.
Thinking about our potential donors with the three-group mindset gives us focus. Helps us spend wisely.
And helps us understand and avoid one of the most common and financially ruinous marketing mistakes that many nonprofits make. Before we get to that mistake, let’s look at who the groups are. For any given nonprofit, the world consists of three groups:
Group #1: People who will always respond, no matter what
These are your true believers, those most strongly connected with your organization and/or your cause. They share your values, care about what you do, and often have personal relationships with people in your organization. Your mother is probably in this group. She loves you and supports you, and will donate to your cause no matter what you say.
I’d hate to say they will respond even if you send them complete garbage, but many of them will! This explains why there is so much sloppy, ill-conceived fundraising out there. Because Group #1 allows us to get away with it!
Your duty toward these people is to be there for them: To keep connecting with them by asking, thanking, and reporting back.
Group #2: People who might respond, depending on what you say
They’re somewhat like the people in Group #1, but they just haven’t given — yet. There are a lot of reasons for that: Some haven’t heard of you, some donate to another organization that’s similar to yours, and others just haven’t got over donor inertia yet. But they are open to donating to you, given the right “push.”
If you are going to grow, you must connect with this group. There are a lot more people there than in Group #1.
And here’s the key thing about Group #2: Effective fundraising is the way it is because of them.
The weird, counterintuitive techniques and approaches that drive effective fundraising are because of them: Long messages, specific calls to action, storytelling, emotional appeals, repetitive messaging, effective thanking, reporting back … basically everything we teach here at Moceanic … these are the things you must do to reach Group #2. If you reject these things, you’ll eventually have to shut your doors, unless you have an abnormally large and self-replicating Group #1.
Then there’s another very different group …
Group #3: People who will never respond, no matter what
I have sad news for you. Something like 99% of everyone is in this group.
They are in the wrong demographic. More importantly, they are in the wrong psychographic. They don’t think or feel or connect with the world in the ways your donors do. They may not give a rip about your cause. Some of them actively hate what you do. Many just don’t share your values. Many of them just don’t grasp the idea of charitable giving and never donate to anything at all.
People in Group #3 can move into one of the other groups. In fact, the main way they do that is they get old. That’s not the only way nondonors become donors, but it’s the most common way. They just don’t do so often enough to make them an effective audience for you.
It is possible to wheedle a donation now and then from Group #3 people. Major disasters and lightning-strike viral phenomena like the Ice Bucket Challenge can temporarily move some of them into Group #2. But you aren’t in control of the situation, and even when it happens, it’s not sustainable. They give, then they disappear.
For the most part, you are not going to get a penny from Group #3, no matter how hard you try. No matter how much you spend. No matter how optimistic you are about it. No matter how cool the agency that offers to get those people on board with you.
It’s not you. It’s them.
All the money in fundraising comes from the first two groups.
All of it.
If you are an effective fundraiser, you already know this, whether you’ve consciously thought about it or not. I know that, because you are doing effective fundraising. Even though it’s weird, and you sometimes struggle to believe in the oddball rules of fundraising. You’re succeeding because you are talking to the people who might respond.
Unfortunately, people like you aren’t the only ones working for nonprofits. There’s a whole other mindset that doesn’t know the three groups. In fact, they fly in the face of it. It’s as if they asked Wanamaker’s question about waste, got a good answer about where their money was going to waste, and decided to spend more money in the waste category!
You know who I’m talking about.
They often work in “communications” or “branding.” Many come from commercial marketing backgrounds. A lot of board members think the same way.
They think we fundraisers are complete dunderheads, because they look at the work we do and note how odd it is. They say, “This would never move most people to give.” They’re right about that. It doesn’t move most people. It moves some people in Group #2. (And everyone in Group #1.)
Every time I’ve presented a fundraising plan to a nonprofit board, someone — usually several someones — wants me to assure them that the new fundraising plan will not resort to things like “all that underlining” or “those emotional sob stories” — things like that. The things that make fundraising work.
They’re hoping to abandon all that — thinking fundraisers do that because they’re so ignorant, so afraid of change, and so uncreative that they can’t do anything else.
What people of that mindset will do, if allowed too, is create flashy, modern, conceptual messaging that breaks through the noise and grabs people by the back of the neck and yells persuasive nothings into their ears.
And it doesn’t work.
Because the problem is not what we say or how we say it.
The problem is the audience. They’re talking to people who won’t give.
It happens every time. It costs a lot. Revenue tanks. People get fired. Budgets have to be slashed.
And then the fundraisers get back to work with Groups #1 and #2 to clean up the mess and rebuild the broken program.
Here’s what all this means to you: In fundraising, the magic happens when you focus on your Group #2: Who are they? Where are they? What media do they use? What are the values and identities that drive their behavior? What calls to action activate them? You can spend a career working on that, and if you do, it will pay off.
Learn about them. Learn what works to bring them on board. When you do that, you’ll also activate your Group #1 people — after all, they’ll give anyway.
The other takeaway of Al Clayton’s three audience framework is to help you recognize when your organization is getting sidetracked by the false promise of Group #3. Very often, those Group #3 campaigns look innovative, promising, and exciting upfront. But when you see that they are not meeting the needs of Group #2, you’ll know …
… a lot of money is about to be wasted! That’s when you should speak up.
If you’d like to see more powerful, foundational thinking for your organization, be sure to check out Al Clayton’s website.
Want help focusing on groups #1 and #2 and fighting the battle against wasting your energy on group #3? Join The Fundraisingology Lab. You’ll get an amazing array of courses, cheat-sheets, templates, and other resources. You’ll also have access to our Facebook community where fellow fundraisers like you are living this reality every day.