Research, Relevance, and a 107 Percent Revenue Increase
By Ginger Conlon | 5.7.18
You know you should, but you don’t always
Conduct research to learn your customers interests and channel preferences, and then
Use that insight to guide your marketing strategy and tactics.
The benefits can be exceptional. NancyJo Houk can attest to this.
“I’m a person who is used to seeing exponential growth and huge outcomes,” says Houk, chief marketing and development officer at the American Indian College Fund and a 30-year veteran of the nonprofit industry. “And the things that we’ve been able to do have surprised even me.”
In a recent interview with MKTGinsight, Houk shares how she and her team
helped the nonprofit increase its number of donors by 100 percent, nearly double its acquisition response rate, increase the average single transaction gift/spend
by 11 percent, grow annual total revenue 107 percent, and increase ROI nearly
Tell us about the American Indian College Fund.
The American Indian College Fund has been around for about 29 years. Our mission is to serve Native students, help them further their education, and subsequently build Native communities. We’ve awarded more than 126,000 scholarships and invest between $8 million and $9 million annually into direct student support.
We also have daycare centers, early childhood education programs, and college prep, as well as tutoring, mentoring, internship programs, and coaching for college students. We help students transfer from two-year institutions to four-year institutions. We have leadership programs and programs that help students make the mind-set shift from school to work.
You’ve been with the College Fund about four years. How has the marketing evolved since you joined?
We had so much that we wanted to tell people. It’s all good and it’s all interesting, but it’s not necessarily what people wanted to hear. We would inundate or overload people with information that was appealing really only to a particular, fairly small group of people and we had pretty much saturated that audience. Instead, we wanted to shift our marketing to a donor perspective based on donor behavior in multiple channels.
We were looking for broader, stronger, and deeper engagement with current and prospective donors. So, we took a step back to figure out what things about our work were interesting to more people and how to then use that messaging and information to get the right message to the right people.
As a result, we’ve made a significant investment in technology-based fundraising and marketing, including creating a digital and social media presence and strategy designed to expand the donor ecosystem. For instance, we completely overhauled the customer/donor section of our website based on constituent motivation. We now have three distinct points of entry on our site based on what we’re driving you to the website from. If, for example, your motivator is social justice, your social campaign will have a social justice message and you’ll be directed to the website entry point featuring disparities between Native American education statistics and other ethnic groups and student videos with stories demonstrating those disparities. As a result, our web statistics have improved dramatically, including number of pages visited, time spent on site and conversion rates.
We also implemented paid social campaigns that complement both acquisition and retention efforts and use a combination of paid social, SEO, and SEM, directly supporting our traditional channel outreach. That was something that was really new for the College Fund — and, actually, it’s pretty new in the nonprofit space.
Did the new focus include rebranding?
We started rebuilding the College Fund brand through our messaging and audience identification and by using segmentation in all channels.
We have different audiences in different channels, but there’s always consistency in messaging and brand across all channels. We took the opportunity to take a close look at how we can combine channels for the greatest success in different audience segments.
How did you get insight into donors’ motivations?
We use all model-driven targeting in our donor acquisition. Marketers often purchase, rent, or exchange lists, but we don’t use any particular list. Our marketing is all model based.
That followed a significant investment in research. We spent a lot of time on quantitative and qualitative research, and then conducted validation surveys and stakeholder interviews. This was all to figure out who we should be focusing on, who our target audiences are, and how we could reach them better.
We discovered that there are a lot of people who are interested in Native issues and we needed to speak to them about things that are interesting to them instead of inundating them with information about all the great work we do. It’s tough to do and do consistently, especially when you're in the nonprofit realm because everybody feels so passionately about their work.
Our story used to be centered on the institutions we support. We know that people give to people. So, one of the first switches was using marketing that would get people to think about helping develop other people, which they’ll relate to more than to an institution.
Tell us more about the research.
I can't underscore the importance of the research we did. Research pays for itself exponentially if you take it to heart and do what it tells you to do.
When I started at the College Fund, everybody knew that what we were doing wasn't producing the outcomes that people were looking for. But everybody also had an opinion about what we should be doing. And no matter how much experience you have or what kind of successes you’ve had in past lives, when people are emotionally attached to your mission, everybody really has a strong and passionate perspective on how you can be successful “if you just change this or that.”
I listened to everybody’s perspective for about six months. And of course, everybody had a different opinion. So, I was able to say, “We all have a different perspective and I'm not sure that any of them are going to get us where we want to go,” and convince people to invest in research. It was a huge step forward for the organization.
What changes did you make in terms of people and process to support this donor-centric marketing?
My whole team is about 20 people; two and a half of those people are completely dedicated to marketing. So, we use a lot of agency partners. They do great work and their data is wonderful. We work with ad agency Wieden+Kennedy, digital marketing agency Vladimir Jones and digital acquisition partner VeraData.
We did add a position for someone who spends about three quarters of her time working exclusively on social media posts and responding to comments. We’re now able to respond to about 100 percent of the comments we get on any social media platform.
Any new technology?
Technology continues to be one of the challenges for us. Part of that is figuring out what makes sense for us to implement and do ourselves and what makes sense to outsource. We’re continually assessing that. Currently, we rely a lot on our agency partners for much of the technology, especially the reporting.
There are so many different tools you can use in reporting on and across channels, and what’s available is constantly changing. It's good to use agencies because, as a nonprofit, it’s hard to always have the latest and greatest — particularly in the reporting space, where you’re able to tie your investment to outcome, there’s always something new available to do that better.
Is there particular technology you’ve added that’s been especially effective?
Social is absolutely my favorite addition because you get instant gratification and see the long-term impact in the relationships we’re building. When I look at the increased annual value of our donors, when I look at the growth we’ve seen, I can in some instances directly, but always indirectly, attribute that to the multichannel layering and to people’s ability to engage with us in the way they want to, in a way that has really become the norm for them.
What are some of the benefits of this audience-focused approach to marketing?
The number of our donors has grown by 100 percent within the past three years. Plus...
Our new donor response rate — that is, our acquisition response rate — has nearly doubled from .27 to .45 percent. And that’s directly attributable to layering the digital and social media on top of traditional communications and advertising.
Our average single transaction gift/spend has increased by 11 percent.
Our annual gift/spend per person has increased by 16 percent.
Our annual total revenue has increased by 107 percent.
We've added more than $98 million of value to our database. That’s a 31 percent increase.
And we’ve made substantial investments in prospecting new donors and other constituents and expanding the channels that we use to communicate with them. And still, we’ve increased our return on investment from 2.7 to 3.1, an increase of 14.8 percent.
We’ve achieved this growth with a lot of investment in donor acquisition and still managed to increase our ROI. And when I talk about ROI, that includes all of the agency fees, as well.
We’ve focused a great deal on acquiring and retaining higher-dollar donors. As a result, we’ve increased our revenue annually from first-time $50-plus donors from about $150,000 per year to over $600,000 per year.
That’s why I’m such a huge advocate of doing this type of work and incorporating the things that we’ve incorporated — the research, the highly targeted donor-focused marketing, the layering of multiple channels. Because the results are
It shows the benefit of connecting with people based on what they're interested in and where they're interested in having the conversation.
Right. Everybody has a story, and each story has a lot of different elements. Over the years, branding was like giving an elevator speech: You’d know exactly what you want to say to people in any given moment and it would always be the same because that’s how you build your brand. That’s just not really true anymore. Today, it’s about knowing your story well enough that you can actually identify someone’s interest and where their passion lies, and then connect with that through some element of your story and the way that you tell it.
When you start as a smaller organization, your percentages in growth are huge, but the actual dollars are in the millions, not tens of millions. When the numbers start getting bigger, then the dollars start getting bigger. So, I'm really looking forward to seeing the day when it’s 100 percent increase in revenue and that translates to $20 million or $30 million or $50 million.
The other thing I’m looking forward to is updating our research. We conducted our research about three and a half years ago, so it's time to do a refresher. Our world has changed and there’s a shift to addressing social injustice that opens up a whole new space for the College Fund to exist in. So, I'm looking forward to developing that and seeing great response and engagement with it. And of course, translating that into dollars.
About the Author
Ginger Conlon, chief editor and marketing alchemist at MKTGinsight, catalyzes change in marketing organizations. She is a frequent speaker on marketing and customer experience, and serves in advisory or leadership roles for several industry organizations. Ginger was honored with a Silver Apple lifetime achievement award for her contributions to the marketing industry.