Sunday, 21 December 2008

Christmas is a time for giving

As the saying goes it is better to give than it is to receive. At this time of year when we're buying gifts for others, thoughts also tend to turn to charitable giving and the trend in recent years has been to give charitable gifts, with more and more charities packaging up their services as items which can be bought and given.

This year though has seen a marked change. Charitable donations have been heavily hit as people start to reign in their budgets by dispensing with any non-essential expenditure. Charitable donations are reportedly down 20%, but for many charities this is much higher; both Shelter and Oxfam are said to be laying off staff and the NSPCC has said it's making 150 of its 2,500 employees redundant. This is not unexpected but it obviously comes at a bad time with more and more people requiring the services of these charities. So desperate is the situation for many charities that the UK government is even considering some form of emergency loan to help charities ride out the crisis.

Charities are essentially like any other business in that they are looking to maximise income and minimise costs, and like any other business they are probably going to have to change how they go to market in the next year or so to become more nimble and proactive. Even in the largest corporate, marketing budgets are being reviewed and people want to make sure they get the best return on investment. There has been an increased focus recently on targeted marketing, sending communications to the right people at the right time to maximise responses and minimise costs. This is not a recent innovation, many programmes have been doing it for years and it's the main theme behind 1-2-1 marketing; however it has always been easier to do mass communications – they take less planning and less thought and provide "known" results.

With tighter budgets and tougher targets though, companies are looking for their loyalty programmes to work harder, using the detailed information they contain to target the customer segments with the most potential. I've no doubt many of the larger charities also have very sophisticated CRM solutions but they too are going to have to become smarter with how they utilise them. The balance from acquisition with blanket mailings may have to shift towards more retention mailings; these retention mailings may also have to change to ensure that they are sent to maximise responses. This may mean having to gather additional information to understand when donors want to be spoken to and what kind of information they want to receive – essentially tailoring the charitable experience and making it more personal and relevant.

In one example of where a small local charity changed its approach to a more targeted campaign to existing donors they saw an ROI of over 900%. After asking donors when they wanted to be communicated to and how often the charity ended up with a loyal customer database with over 50% indicating they wanted to be communicated to just once at Christmas. This saved a significant amount of money on sending mailings that were not wanted and when they did then send mailings, these were personalised to specific donor segments and communication preferences and saw a response rate of over 35%.

All of us, whether charities, businesses or individuals are going to have to think about how to get more value for our money in the near future – increasing income may not always be possible but reducing costs certainly is.

In the short term however what charities really need is our money…

Have a great Christmas and if you feel the need and don't have a preference, try Shelter or Salvation Army to make someone else's Christmas.


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