Tuesday, 23 December 2008

My crunch hunch

Optimism is dead. Regarding the wider economy, at least.

You no longer hear the occasional optimist saying things will pick up in the spring. Everyone agrees that things are going to get worse.

As winter suddenly bites in January and February, the only thing getting brighter will be the sky as the days gradually lengthen. The economic outlook will get darker.

The post-New Year lull can often feel a bleak time of year but in 2009 it could be dreadful.

Over 80 percent of marketers are investing in CRM because of the economic downturn but this sudden focus on relationship marketing comes too late.

With brand and product homogeny, and the relentless growth of online retailers fueling the Long Tail, differentiation by customer service is increasingly important. A concept widely promoted in the 80s, it is sad that so few brands really embrace it.

Charity brands from the NSPCC down are losing direct debit donors at an increasing rate, and commercial brands such as Dixons are reporting rapidly dropping sales. The sorry demise of Woolworths, it has been said, is only the beginning.

Improved customer service seems to be one of the few ways left to avoid catastrophe as the recession bites.

(Interesting, then, that just at this critical moment BT axes 10,000 posts ... and if you have ever had the misfortune of calling BT Customer Services, you will agree that this move does not inspire confidence in future levels of service.)

Marketers must start to engage with customers – really engage, by taking time out to sit on the phones and take Customer Services calls for example! Similarly, fundraisers must start to engage with donors, for example by regularly spending time with Supporter Services, opening post and seeing what they're saying about their appeals.

In September, CAF and ACEVO reported that 88% of charity CEOs expect income to drop over the coming year. And recent press reports appear to be confirming this outlook.

While 62% of charities expect to increase fundraising investment to mitigate the effects of the recession, according to IoF/PwC/CFDG's Managing in a Downturn research, some charities are already on a slippery downward slope. They are the ones whose copies of Relationship Fundraising have been gathering dust for the past decade, while they’ve persisted with the charity equivalent of the assault on Falluja.

So what can you do to stem the attrition of donors, and protect your income in 2009?

If I were back in that position, I would seek to communicate – at least twice between January and March – the following key messages…



‘Your money’ is the vital phrase. And it is one that I think deserves a moment’s reflection.

This slightly old fashioned notion of it being ‘my money’ is very relevant in times of recession. It’s my money. Why should I continue to give donations on the vague promise that, ‘this is what you will do with it’?

I want to see what you did do with it.

Otherwise, I’m not so sure about giving you any more.

As Karen Osborne puts it, this ‘delivery on the promise’ is what donors want – and it is the best way to unlock their next gift.

The good news is that Bluefrog has developed several solutions to this challenge that are already reaping rewards for clients.

My hunch is that unless charities lead on this message in 2009 they will end the year with fewer than half the active donors they have now.

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