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

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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 mail have gotten you a lot of low dollar responses from old donors.

Granny was happy to send you $10 – after all you seemed like a nice organization that could use it. Her generation dominated direct mail for the life of the industry. But with ask amounts of $10 or $25 you are giving your young prospects a good laugh. You are asking them to give an amount they feel intuitively will make no impact on your cause. Your ask string might be so low in fact, you are telling them “please do NOT waste your money with us.”

The future means fewer donors overall and higher values. The $10 donor is dead. I have an idea on how to leverage this insight in an acquisition test. Contact me.

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