 ast week, I argued that predictive modeling is not as intimidating as it sounds. In fact, you don't need a consultant to build your models and you are the best person to do it.
You are the best person to build your projections for a couple of reasons: 1) You do/should have the most knowledge about how your program has historically performed and your strategies going forward. 2) You will be the person working with those projections throughout the fundraising year as living documents to guide your path to optimum performance. To work best with the predictive model, you should build it and understand it from the ground up. A great report (if you can easily get it) is a projections versus actual report that shows you segment-by-segment, side-by-side, where you thought you would be and where you are currently. But if you can't get a report like this designed, no worries. You can easily have your projections (your predictive model) in one hand and your up-to-date actual results in another. You should do a P v. A (Projections versus Actual) analysis at least quarterly but ideally monthly. My recommendation would be to work up to more frequent analysis if you aren't currently doing it, as it can be overwhelming and time-consuming in the beginning. The benefits are abundant, though, as I will articulate. Here's how this works on the segment level: I'll use phonathon segments as an example, but this could be anything (direct mail, email, leadership giving, etc.) Say you are getting close to finished with the College of Business but it doesn’t look like you are going to reach your total dollars. You can now use your projections to pinpoint where the downturn occurred and proposed pointed solutions. (See charts above.) You notice that you are very close to finished (completion rate) and therefore you aren't going to have that many more calls in order to make up lost ground. The next thing that pops out to you is that contact rate didn't perform to expectations. This signals one major thing: lack of data integrity. Lastly, the participation rate for this group is much lower than projected. You have isolated the two major issues with the College of Business results thus far. If you never had the projections, your report to the Dean of the College of Business would probably simply be, "I'm sorry but we are going to fall short this year." Or worse, you might feel the need to follow that up with a bunch of speculations and excuses. Instead, you are armed with information and can break bad news with prepared data-driven solutions. So, a conversation with the Dean of the College of Business might go like this: “It appears that we may fall about $2,000 short of our goal for your college. This is due in part to our contact rate being lower than expected for the college overall and a slightly lower participation rate than we hoped for in the future donors. So, I would recommend that we send out a 'where are you?' email to try and get updated phone numbers for all of your graduates and we may lower the ask amounts for the future donors to help improve acquisition for this group.” This works the same way with your higher-ups. You will be able to show which metrics and schools are under-performing and explain the statistics rather than provide anecdotes or excuses. It works the exact same way if your results are amazing! You are able to report on where and how you beat the goal and therefore where the areas of opportunity are for the future. This perspective can change the course of your career because you will become the most trusted person in your organization. You are informed, realistic, and have solutions and analysis galore! Try this with your next project. Let me know how it goes.  “Predictive Modeling” sounds intimidating, right? It sounds technical and complicated. You probably think you should hire a consultant to help you create a predictive model for your organization.
Well, let’s all agree together to take the bite out of this phrase. I like Wikipedia’s uncomplicated definition of predictive modeling as a system that “uses statistics to predict outcomes”. Creating a predictive model is merely using statistical educated guesses to build projections and then work with those projections dynamically throughout the year. Projections is a version (model) of what you think will happen in your program this year (predictive). I’ll discuss here how to build you’re your projections and next week, I’ll post about how to work with your model dynamically throughout the year as the actual results impact your ability (for good or for ill) to reach the projected goal. For this exercise, you will need:
You’ll building each segment into your spreadsheet like you’re building a house: brick by brick, cell by cell. This takes a long time but it is the essence of predictive modeling. It must be detailed to be relevant. Once done, you’ll have a powerful tool for the entire year. So, let’s take an example or two (see the chart above): Let’s say you want to know how your fall direct mail will likely perform. You estimate from past results and database reports that you have 1,156 lybunts (last year's donors) and 567 sybunts (donors who gave 3-5 years ago) to send a letter to this fall. Looking at past years, you see that your response rate has been between 8-10% for lybunts and 4-7% for sybunts. You feel like playing it safe so you put in the low-end values. Using formulas (see my video on that topic here), the information you have put in so far tells you that you can expect 92 gifts from the lybunts and 24 from the sybunts. Based on past reports and your best guesses, you put in $135 for a lybunt average gift and $87 for sybunts. This makes your likely total dollars $12,484 from the lybunts and $2,096 from the sybunts. Now, assuming those were your only two segments for fall direct mail, you can then total up the letters, gifts and dollars and you know what to expect. Your models might include just one vehicle (direct mail, phonathon, email solicitations, etc.) or it might include everything your shop plans to bring in. Your model might have hundreds of segments or be exceedingly simple. The point is not to be baroque but specific enough to be valid predictions of results. This method is powerful because you’ll be able to see immediately which segments have a negative return on investment and can decide actively whether they merit sending the letters anyway to acquire the donors. You will also know exactly where you fall short if results don’t live up to these expectations, which enables you to course correct in future projections and change strategy for the rest of the year. I’ll show you how to do this in next Wednesday’s post – “Demystifying Predictive Modeling, Part 2”. Don't ever be intimidated about predictive modeling again. In fact, because of your knowledge of your program, you are the best person to build and adapt your predictive models. You can do this!  The short answer to this question is “no”.
But, many will miss this because we personally (as marketers) don’t like getting direct mail and probably are cynical in our responses to it. This bias leads us astray from recognizing the particular advantages of this medium. We delude ourselves that email and social media will take the place of this ancient vehicle of communication because we relish the new and the innovative. The problem is that our donors don’t think like we do. And groups act differently than any one individual in that group thinks. The United States Postal Service had revenues of $68.8 Billion in 2015 and that number has stayed rather steady since 2009 (after a drop in revenue associated with the economic downtown in 2007-2008). In 2015, USPS handled 80 Billion pieces of advertising material. Are all of the organizations and businesses sending through the mail kidding themselves? I don’t think so. A significant portion of that mail is non-profit direct mail. In fact, 91% of nonprofits are using direct mail. Out of those using direct response, 54% saw an increase from 2014 to 2015. The real answer to the question “Is Direct Mail Dead?” is “No because bottom line: it works!” The question we should be asking is, “What is direct mail particularly good at? How can we play to those strengths?” Direct mail has powerful things working in its favor: Nostalgic Getting a hand written note (especially a thank you note) in the mail is so much more powerful than an email. Part of this is nostalgic and retro but that nostalgia is rooted in the notion that people today don’t take the time to write notes. Mired in our daily lives driven by insta-communication, when you do take the time to send mail, it’s noticed. Familiar Everyone understands what mail is. We all know the conventions of how to fold the letter, address it, use the stamp, how to check the mailbox, etc. New media like text-to-give and various online giving platforms can be baffling, especially to the very elderly. Mail also allows us to form a visual brand that makes the donors feel comfortable giving because they feel they know that organization and trust has been built. Secure With all of the various information breaches these days, many donors feel that writing a check and sending it through the mail is more secure. The USPS is still a trusted entity protected by laws that forbid tampering with the mail. This reassures donors. Informative Although it is much more difficult to personalize than a phone call, direct mail can be highly informative. You can write a long and detailed letter and include points of pride on the back of the letter. You can include buck slips with more information for very little cost. A donor can, after absorbing your direct mail, feel like they have learned a good deal about your mission and organization. Tangible You can hold a letter in your hand. You can keep it in a file for years. If an angry donor sends a copy of the letter with a complaint written on it to your director, it has much more weight and seriousness than a forwarded email with a complaint. Part of the power of direct mail is the same power as real books and real magazines. People like to hold something in their hands other than mobile phone or kindle.  If you haven’t heard, Stanford University ruffled some feathers last week by announcing that is doing away with its phonathon. Here's the announcement from Stanford. Donor Relations Guru and Annual Giving Network wrote about it. Here’s my take. Stanford is not the first to get rid of their phonathon and they won’t be the last. Does that mean that phonathon is dead? No way! One friend of mine said “So It Begins” on Facebook about this because with such a high profile university ditching their phonathon, annual giving specialists all over the country will have to go into a new cycle of justifying their programs to administrators who think that their universities are also Stanford. The truth is that Stanford could afford to stop fundraising full stop and they wouldn’t lose any market share for years. Eventually revenues might drop, but it would take a while. The loss of new fundraising revenue wouldn’t seriously impact their rankings or ability to recruit students for decades probably. Stanford has two very powerful things that your university probably doesn’t have that make it possible for them to say to donors: “You meet us on our terms. We don’t feel like calling you anymore.” Or as they put it in their paperwork. “Give online. It’s the modern way to give!”
Donor Relations Guru makes the point that we should be multichannel and of course we should. Giving donors options and honoring their choices should be part of your plan. But if you aren’t Stanford and you don’t have a long game plan to replace the things that phonathon brings you (up-to-date data, donors, positive public relations, dollars, and donor education) proceed with caution. Don’t get rid of any medium that you can afford that gives your donors another way to give. I work for an institution that stopped communicating with donors via phone a while back and now we have to rebuild and repair those relationships. Phone calls have significant advantages that haven’t changed:
Imagine if we just gave up trying to visit major donors and just decided to tell them all to give online. I don’t think we would clutch our pearls. We would laugh and wish that institution the best in their experiment. (I guarantee that political candidates aren't even considering giving up their "Get Out the Vote" phonathons!) Personal interaction works best. We know this because fundraising is about relationships. But it is also about asking. Phonathon allows us to do both and reach a large amount of people at the same time. No other medium does this. If your phonathon isn’t working, it probably isn’t because the medium is dying. It’s more likely that the problem originates from poor caller training/management, you have poor contact rates or ironically, you aren’t calling enough to make your fixed costs worthwhile. There are solutions to all of these issues.   Motivation goes far beyond call center games. Games are one of the most visible manifestations of external motivation in the call center but I have seen too many well-meaning managers become over-fixated on games. It is important to have other things undergirding your motivational strategy so that the games become only the icing on the cake.
Make sure your call center has:
All of these things come before the nightly games. It is also important that games not detract from the purpose of the calling shift, which is to raise money efficiently. Games should never take time away from calling or create a situation where callers are disturbed or distracted when talking with prospects. That said, call center games are a cornerstone of what makes having a such a hard job FUN! You can get some great ideas for new call center games (and new twists on old favorites) by subscribing to Real Deal Fundraising. My "15 Best Call Center Games" guide is my gift to you for subscribing to this blog. Click here or the button below to sign up for updates today.  One of my most favorite techniques for improving caller motivation is to write letters to local businesses to ask for “gifts-in-kind” to use as prizes for outstanding callers. That idea is far from new, but there is one tweak that I think many haven’t thought of that makes all the difference in terms of success.
Many universities and colleges commission economic impact studies that quantify the value that these higher educational institutions have on their local economies. These studies usually herald impressive numbers, from the number of jobs provided by the university to the total estimated dollars of economic impact. Here are a few examples to show you what you’re looking for:
If you can get your hands on a study like this specific to your institution, you will be able to craft a letter that is optimally successful. Some studies have a statistic that actually shows how much money university students spend in the local marketplace, like the ones from Notre Dame and South Carolina above. If you can get this figure, it’s clutch. The data from these sorts of studies will motivate the businessperson to get their business more in front of students. They will see what a significant portion of their business that students (and the university in general) represents. And you will be providing them with a quick and easy way to advertise to students. All they need to do is provided a few coupons for free merchandise or services and you will not only put them on your webpage or Facebook (or both) but you’ll give these out only to the top performers so they get to try their products. To find an economic impact study for your institution, start just by googling “economic impact study” and your institution’s name. If nothing comes up, contact the College of Business or Economic Development department at your institution and they may know of a study or where to find it. Some universities do a great job of promoting this important information and others don't exactly. It may be hidden away in some office of institutional research. Put it to good use. Do you solicit “gifts-in-kind” from local business for your phonathon? If you have a killer letter that you use, please share the text in the comments!  Now is the time to be thinking about how you are going to train your new callers. But, the truth is you aren’t just training phonathon callers.
You are training young fundraisers. If you do it right, every caller in your center will have a knowledge of fundraising that rivals most experienced development officers. The techniques that your young fundraisers learn can be applied in nearly any area of business that they choose to pursue. If your system reinforces these lessons, they will be incredible young fundraisers. They will raise serious money for your institution and have an impact on many students, faculty, and staff. From the time he or she is hired, you are a part of that student fundraiser’s education. He or she will also be an integral part of the life of your educational community. A Holisitic Approach to Training If staffing is about quantity, training is about quality. Of course, you want staffing to be about quality too but speed takes precedence. In training, you should still be as efficient as possible but that isn’t as important as being effective. You want to take all of these students you hired and make them into incredible young fundraisers. When someone says phonathon training, generally “new hire training” is the first association we make, as if that’s the only kind of training there is in a call center. Training is necessary throughout the entire time that a caller works with your phonathon. If we take a more holistic approach like this, quality and quantity begin to work together. Believe it or not, you can get more done in less time and it works to the benefit of both the callers and the program. Here’s my proposal: what if we presume that for the first couple of weeks new callers will be calling only future donors (my optimistic phrase for a non-donor)? Suddenly, there a ton of things we just wouldn’t need to cover in new hire training. Upgrades, special giving societies, leadership levels, extra objection responses and fresh ways to build rapport could wait a couple of weeks or a month. Now this change of perspective on new hire training as outlined above does three amazing things:
Training doesn’t only happen on the front end. Training actually starts in the interview process, as that shapes how the employee views the expectations and responsibilities. And training continues every single night in team meetings, coaching, and formal continuing education sessions. Training continues as new hires become donor callers, donor callers become new hire mentors, and lead callers become student supervisors. Once you switch your perspective, you don’t feel the pressure to squeeze everything in during new hire training. You can then consciously design a holistic growth and education program that will teach each student fundraiser what they need to know when they are ready to learn it. Oh, by the way, this kind of "life-cycle" training that I recommend will have the end result that you “grow your own” call center leaders. If you put these strategies into play, you will have many productive callers, but also many mentors and leaders in your call center. When you get promoted, and you will, you will have graduating seniors ready for a chance to make their mark on your institution. Talk about succession planning!  So, this weekend my debit card/checking account was hacked for over $1,100! Lucky for us, we have a great credit union that helped me get the issue fixed immediately Monday morning and all of it (including the overdraft fees that it caused) will be fully refunded.
My mother asked me who actually ends up paying for these issues since the culprits are rarely caught. Strangely, I knew the answer because I have been trained on PCI compliance. The credit card companies end up eating the cost of fraudulent charges. If you aren’t familiar with the term, PCI or PCI DSS stands for Payment Card Industry Data Security Standard and it is an effort on the part of credit card companies to prevent fraud and protect their bottom line. Anyone who charges credit or debit card is responsible for handling cards in a PCI compliant way. As fundraisers (and more specifically phonathon managers), if you aren’t sure what PCI is or whether you are PCI compliant, you probably aren’t doing it right. Check with your Advancement Services staff and ask about this. Educate yourself, your student supervisors and your callers. The standards were updated in April 2016 and you can download them for review by visiting www.pcisecuritystandards.org/. This happened to me at the University of South Carolina. We utilized every standard and precaution and took it very seriously. However, over a six week period, we started to get a string of complaints about rogue charges a few days after the alumni had made gifts via phonathon. There was no traceable pattern to the issues. Although we never identified the offending caller, we did isolate through analysis of our nightly seating charts that it must have been a caller who was overhearing other callers read out the number to the prospect for verification. We changed that part of the script and never had a problem again. I talk about training our student callers about donor confidentiality and PCI compliance as often as I can because it impacts donor confidence in our organizations but also it impacts families. Most donors are not multi-millionaires, they are well meaning folks whose monthly budget can be wrecked by fraudulent charges and the time it takes to clean them up. So, review the policies and start asking questions about how data and credit/debit cards are handled in your shop. Train your employees about properly taking care of the data, which is really taking care of people. It’s part of stewardship and it’s super-important. If you found this article helpful, you may also be interested in my e-book How to Staff Your Phonathon Super-Fast: Seven Secrets to Fill the Seats. It's on sale now for $40 with the coupon code fillseats (valid through 9/1/16). This book guides you through innovative ideas and practices to turbo-charge your phonathon staffing efforts and break free from the hamster wheel of turnover. It also includes an appendix full of templates and samples to get you started implementing this system fast.  Mock Calling is a critical part of any new caller training session. It's also important for new major gift officers and leadership giving officers to practice in this same way. All-to-often, though, the exercise becomes stale and perfunctory. Here are 5 ideas to re-invigorate your mock calling practice, whether you work in phonathon, annual giving, or major gifts.
Voicemail Have your callers each call from their cell phones and leave a voicemail on your office line of an abbreviated script. Then have the entire training class listen to each voicemail and critique the caller based on enunciation, speed, sincerity and other qualities. Scenario Cards Create a set of cards with fake prospects on them. Create corresponding cards with background information on how the prospect is predisposed to react to an ask. Pair up callers and give them several sets of cards to work through alternating between caller and prospects. (This works for leadership and major gift officers too. Just practice asking for a visit and handling objections to taking the visit.) Observation Calls Have one caller go to a nearby office (far enough so they cannot see or hear the group) and have them call a line with a speaker phone function. Put the call on speaker phone so the rest of the class can hear the conversation. Make sure everyone gets a turn and that you debrief after every call what went well and what could be done better. Rapid Fire Objection Practice Divide callers into teams and have them stand in two rows. Give each caller at the front of the line an objection. “I can’t give this year. I just had a baby.” Caller must respond immediately. After each round, have an impartial judge (student supervisors or lead caller) award a point to the team whose caller handled that round best. Winning team gets a prize. Judge selects an MVP from both teams. (For full-time fundraising staff, just practice objections to taking the visit.) Power Intro Drills Practice just the first 10-15 of a call, including asking for the prospect, introducing the institution and yourself and lastly stating why you are calling. Every caller gets several chances and then everyone gets to go again at the end of practice. Select a most improved caller or two who show significant improvement. Judge their intros on sincerity, diction, energy and enthusiasm. Every fundraiser needs a strong introduction whether they are a student caller or the CEO. If you found this article helpful, you may also be interested in my e-book How to Staff Your Phonathon Super-Fast: Seven Secrets to Fill the Seats. It's on sale now for $40 with the coupon code fillseats (valid through 9/1/16). This book guides you through innovative ideas and practices to turbo-charge your phonathon staffing efforts and break free from the hamster wheel of turnover. It also includes an appendix full of templates and samples to get you started implementing this system fast. Over the last few weeks, I've been posting about a wide variety of best practices to improve contact rates in phonathon. This post will serve to consolidate this information and recap the recommendations.
It is not possible to raise money from someone that you can't get in touch with, so contact rate is crucial to a healthy phonathon. When your contact rate improves, you will raise more money even if call quality doens't improve at all. It is not optional. You must have a plan to get your data clean and valid and keep it that way. First Steps to Improve Phonathon Contact Rates: This post outlines the importance of contact rates and details the basic research processes that every phonathon should be doing prior to loading data for the year. Next Steps to Improve Your Phonathon Contact Rate (Wireless ID and Wireless Append): This post lays out the trends with respect to households transitioning to wireless only. Your database must manage phone types properly to accommodate this shift. There are also new data research tools that you need to make use of to acquire cell phone numbers. Continuing to Improve Phonathon Contact Rates (Most Best Practices): In this installment, I recommend that you manage your data so that you do not load known invalid phone numbers for calling again. Once you remove those invalids, you'll need to find more groups to call and I show you how to lobby to call new colleges, schools or units. Improving Contact Rates in Phonathon with Where-Are-You-Now Emails: Besides making good use of data research services, you should also go to your constituents and ask them to update their information. In this post, I give an overview of sending next day "where-are-you" emails and "where-are-you" email blasts. Young Alumni, Contact Rates and the History of Cell Phones: This post shows why young alumni are a strong group for contact rate and gives a comprehensive argument for why you should not remove young alumni from phonathon. I hope you find these tips helpful. If you implement these strategies, your contact rate will improve. Improved contact rate in your phonathon will mean more money for your institution. Please comment below and let me know your results. |
Jessica Cloud, CFREI've been called the Tasmanian Devil of fundraising and I'm here to talk shop with you. Archives
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