The RNLI’s first opt-in-only appeal hasn’t proved the Pareto principle, which suggests 80 per cent of the benefit comes from 20 per cent of the activity, but it wasn’t far off.
The charity reached 61 per cent of its previous year's income from mailing just 21 per cent of that year’s audience.
For most fundraisers and sales professionals, that shouldn’t be a surprise. It is common sense that when we focus our time, effort and communication on the people who are most engaged, we get significantly better results.
It's common sense, but not common practice.
There are three reasons we don’t have this level of focus as much as we should: we worry about becoming too dependent on a minority; we worry about disengaging the other 80 per cent of the audience; and we worry that we won’t match last year’s numbers if we don’t hit everyone on the list.
We worry too much. Here’s how to stop.
Whether you’re fundraising or selling products and services, split your potential customers and donors into four types: high value, high potential, low potential and unknown.
High value donors and customers are those that give the most and are completely bought in to what you do. They are the commissioning managers that fight tooth and nail for the budget to fund your service rather than a cheaper alternative, because they know it gives the best outcomes. They are your opted-in, volunteering, campaigning, direct-debiting donors.
They probably represent no more than 10 per cent of your database and, if you don’t know exactly who they are, make that your top priority. This group is your most reliable source of income, reach and impact, and listening to them and looking after them should be 30 per cent of your team’s focus.
High potentials are the people who buy in to what you do, but spend only a fraction of what they could spend with you. These are the commissioning managers that use some of your services, but like to share the contracts around. They are the donors who opt in but don’t fundraise, the signatories to campaigns who don’t volunteer. Many of them never will, but some of them, with the right encouragement, will go all the way. Not everyone who opts in will be high potential, but anyone who is high potential will opt in.
If you don’t have the mechanisms to capture their actions and interactions with you, and to identify and follow-up with each of your high potentials, make that your second priority. This group is your single best source of growth and should be 30 per cent of your focus.
Low priority is everyone else on your database – and, yes, this might mean that 75 per cent of your customers and supporters, even of your opt-in lists, are low priority. Your job is to maintain the relationship and provide occasional opportunities for them to identify as high potential. This group is the biggest current drain on your time and should be just 10 per cent of your focus.
That leaves 30 per cent of your focus free for the unknowns – the potential buyers you’ve never worked with, the members of the public who aren’t on your database and could be in any of the three groups.
Whenever I train sales and marketing teams, we talk about how to prioritise, what to prioritise and how to stick to the things you’ve prioritised. It’s not part of the course, but the training is a catalyst – it makes us answer the big questions. The same is true for opt-in fundraising.
Opt-in isn’t a threat to be feared; it’s an opportunity to understand your supporter base, to start identifying the high potentials, to build segments and strategies that will deepen engagement and increase your impact, your influence and your income.
The RNLI might have just scratched the surface, but it has also shown the way, not just on fundraising, but on what a focused, engagement-led approach can do across all your income streams. Hopefully it’s a lead that many more charities will follow.
Martyn Drake is the founder of the management consultancy firm Binley Drake Consulting