Overall Performance Metrics are Rubbish

Overall Performance Metrics are Rubbish

Your ‘healthy overall retention rate’ is a lie and you should feel bad about believing it. Well, probably. Let’s start with this. Take a look at the chart below and tell me if you’d rather be Organization Blue or Organization Orange? The choice is obvious right? Orange is killing it… WRONG! So, so, so wrong. Now let’s look at projected revenue for the same orgs: What the heck. How is this even possible? It’s not only very possible, I see it all the time. In creating the scenario above, I made each performance metric for Org Blue and Org Orange exactly the same. Their retention by lifecycle – all at the same benchmark levels, their gift sizes and frequency – held constant. Everything about the two orgs is identical except for one thing: Orange is acquiring 10% fewer donors each year, while Blue is acquiring 10% more. Why does that impact retention? Since Blue is adequately growing its file, it has a higher proportion of donors each year in transitional segments (second-year/reactivated). These two lifecycles have lower retention rates than long-term loyal donors. Meanwhile, donors in the active file for Orange are  dropping like flies because the only ones it has left who are factored into overall retention rate are the increasingly lonely, but high performing multi-year donors. These remaining loyal donors are propping up the overall metrics on a crashing file. There are two lessons here… If you like your org and don’t want to have to start a new one, keep acquiring new donors. Always. That’s the lesson from this specific scenario. But what I really want...
Analysis, Plus One

Analysis, Plus One

  What does Analytical Ones mean anyway? Well, the real story is that when Bill ran his own shop in Seattle in the 90’s it was called Analytical One – singular. When the decision was made to move forward with partners in the 2011 relaunch, the company name was pluralized to represent that he was no longer going it alone. As time has moved on, this name has developed another meaning for me. One of our four company values is to Be Curious. Our value to our clients does not come from delivering automated reports like a computer. Our job as strategists and consultants is to maximize the power of your data by thinking with the lights on upstairs. Personally, my passion for this work has always come from the “a-hah!” moments – when I get to deliver that extra insight that breaks through the status quo. As Henry Ford famously said, “If I had asked people what they wanted, they would have said faster horses.” I believe the ideal deliverable is grounded first in fulfilling the agreed scope of work, but then delivering at least one more thing… the Plus One our client never thought of. When you think of our name Analytical Ones, think of our promise to stay curious about your data and our passion to deliver your Plus...

Tax Reform 2018: All Eyes on Mids

Several groups have done research to address the question of how changes in the tax code for 2018 might impact charitable giving. Much of this research has focused on the fact that only 30% of Americans itemize their deductions. Some have gone further to include demographic splits by wealth or region. At Analytical Ones, we believe the most predictive measure of future donor behavior is how they have given in the past. This perspective informs all our statistical models, analytics reporting, and strategy recommendations. A national survey co-sponsored by  Donlon Agency and Analytical Ones found that in the case of 2018 tax reform, segmenting donors  by their past giving levels reveals an important piece of the story. While less than a third of Americans itemize their deductions, our most valuable charitable donors itemize at a much higher rate. As many as 75% of donors who give $1,000 or more to charity each year itemize their charitable deductions. General donors (Under $1k annual) and Major donors ($10k+) are mostly immune to the changes to the tax code for 2018.  However, nine percent of Mid-level donors ($1,000 to $9,999 annual) report that they will have a significant decrease in giving next year in response to the change. Because this group typically makes up a large portion of revenue for non-profits, it is more important than ever to have a specific strategy to cultivate and upgrade mid-level donors. See the infographic below for more...
Granny’s $5 birthday surprise won’t cut it any longer.

Granny’s $5 birthday surprise won’t cut it any longer.

I’m on the 3rd floor of a Michigan Avenue focus group facility with a group of healthcare donors. I’ve just finished describing the directions of one my go-to exercises. They’re being asked to allocate $100 how they please across the organization. A male baby-boomer, on the younger side of the boom, says something unexpected: “I can’t allocate $100… because I would be embarrassed to give this organization just $100.” What just happened? $100 is a decent gift for a direct mail donor right? $100 used to really mean something in this business! Not anymore. Not like it used to anyway. This particular focus group was 3 years ago. I’ve been following this trend through my other research since. In many settings we’ve validated that younger donors have higher first gift amounts in acquisition. But why? It’s the same reason granny sends $5 bills in birthday cards. Our perception of the value of a dollar is very different by generation. At least, that was my hypothesis. So, I tested this assumption on a survey of 300 donors. I asked, “What is the minimum gift you could make to an organization and actually make a difference?” This is an adaptation of the Van Westendorp’s Price Sensitivity Meter question: “At what price would you consider the product to be priced so low that you would feel the quality couldn’t be very good?” The results supported my hypothesis in a way a researchers only dreams about: Mean Response: Donors under 55: $171 Donors 55-70: $68 Donors 70+ $35 What does this mean? Well, in today’s world it means your low ask-strings in direct...

Should you conduct your own survey? If you have to ask, then no.

Online software such as Survey Monkey and Google Forms have made the power of survey research available to anyone with an internet connection rendering us a society of survey experts. And WebMD has made us all doctors… And Pinterest has made us all pastry chefs… Do you see my point already? Bill Jacobs and I share an alma mater in Northern Arizona University where we both managed survey projects for the Social Research Laboratory while obtaining our graduate degrees in Sociology. Although our time at NAU was over a decade apart, we were first connected to each other by a mutual mentor from the lab. Since then, we have shared in conducting hundreds of surveys for non-profit, as well as commercial, governmental and private clients. From time to time we get to witness the horror of the “in-house” survey. It sort of reminds me of the local news every Fourth of July when you hear about all the amateur fireworks accidents. The perceived simplicity and relative user-friendliness of the survey tools mentioned above have resulted too many times in false confidence and ‘shoot from the hip’ research. Sometimes we’ll be called in to make sense of a bad survey, but the problem is that once the data collection is done, it’s too late. At best you have useless data. At worst, you’ve been making bad decisions off of bad insights. So, how do you know if you should conduct your own survey? I’ve put together a list of top-line questions about the process. If you feel comfortable about your answers below, survey away! Sampling: • How do I create a...