In our work we emphasize the need to study the marketplace. You need to be sure that the market you are counting on is a reality. But things change and the “reality” we perceive can turn out to be an illusion. Here’s one example we need to be particularly wary of: the hope that as they age, the Baby Boomer generation will give a much needed boost to our fundraising programs.

Yes, many of us are waiting for the retiring Boomers to become our big new group of contributors. But who will save the Boomers? It seems that as a group, Boomers were pretty poor planners for their futures and many are in real trouble. Whatever the exact statistics, we can probably count on only a modest percentage of them being able to support non-profit organizations, while the others may need help. We need to find and target those boomers with the dependable income to support us.

“New Poll Reveals a Future of Financial Worries For Many of Us” states a headline from an article about Boomers’ retirement and investment plans. In this poll, among the noteworthy findings for fundraisers are:

• 44%  of Americans born between 1946 and 1965 are not confident that they will have enough money to live comfortably in retirement.
• 57% say they lost money in the economic downturn and have to delay retirement.
• About 55% have some confidence that they’ll be able to live comfortably during retirement.
• More than two-thirds of these with higher income feel ready for retirement (we’d better learn how to find these people).
• Median retirement savings is at $40,000 (due to a quarter of this population having saved nothing). Among those who have saved something, the median savings is $100,000. (Again we need to find the group above the median.)

According to this article there are about nine things Boomers could do right now to help themselves. You can read about the eight others in the article, but one is: What you’re paying for in comfort today, you won’t be able to afford tomorrow. So scale back your lifestyle!

Well, I don’t need to tell you we need to make sure that “scaling back your lifestyle” does not include curtailing giving to non-profit organizations. And we definitely need to identify those who do NOT have to scale back.

This is a good illustration of how important it is to know what is and isn’t our market and how it can change, and to make sure what we perceive is not an illusion. Most importantly, we must adapt our planning and execution to what is happening rather than to what we wish were happening or the ways things used to be. That’s the only way to succeed. Otherwise, we’ll always be looking for reasons why something didn’t work.

If you would like to share any of your experiences in dealing with the real or illusory marketplace, please pass them along to us or comment below.

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In this difficult economy we often hear from fundraisers who are considering trying to offset a loss of income by raising their basic membership level or lowest gift ask.

We’ve been asked for advice on this critical pricing decision, and here it is: Don’t. Instead, you need to think about how to upgrade the gifts of high dollar donors, while discounting the basic rate so those who want to support you can find an acceptable level and frequency of giving – acceptable both for their pocketbooks and their pride.

Recent articles in the press, surveys and research back up this recommendation. “As Middle Class Shrinks, P&G Aims High and Low,” a Wall Street Journal article from September 12, 2011, details marketing plans of giant marketer Proctor & Gamble. Another Wall Street Journal article, from September 19, 2011, “Coke Tailors Its Soda Sizes,”  reports on a shift in product development and pricing in reaction to the unfortunate trend of the shrinking middle class, and of middle class shoppers trading down to lower-priced goods.

The shrinking middle class is the bad news. The good news is that people who have money aren’t skimping on their purchases. They are being up-sold, with more costly products designed for their pocketbooks and tastes.

So P&G offers Charmin Ultra-Soft for affluent shoppers and Charmin Basic for cash-strapped customers. Coca Cola is coming out with “Mini Cans,” dropping the price by 20% to lure more customers who are counting their pennies. For those who want more beverage (and calories) and have the money to pay for it, not to worry; Coke expects stores to increase prices on its 16oz., 20 oz. and one liter bottles.

These giant corporations are pretty knowledgeable when it comes to their markets and sales planning. So we fundraisers need to take heed. This would be the wrong time to increase basic rates; middle class people are strapped for cash. And even if they really aren’t, they feel they need to be careful in how they spend their money. Plus there are fewer of them as the economy takes its toll.

I would venture a guess that people who are having a hard time financially or may be unemployed in part populate our growing lapsed files. So we want to go easy on them. Now is not the time to antagonize them by pouring salt on their wounds.

A case in point is the saga of what happened to Netflix, as reported in the NY Times, September 19, 2001. Before their plans to split into two companies, Netflix announced a $6 monthly price increase for their dual services of Internet Streaming and DVDs by Mail. As a result the company very rapidly lost 1 million of its 25 million customers.

Many fundraisers are actually accommodating the middle class donor who increasingly feels pressed, by offering introductory discounts of $25 to $30. This is working well; tests show that net revenue from these lower asks are better than those of $35 or $40.

As for the higher dollar donors, it appears they are happy to spend more on products and services that confer status and make them feel good. So let’s give them the opportunity to feel really special. Let’s think of ways to confer greater status by upgrading their gifts and/or by giving more frequently as Sustainers. Let’s invite them to glamorous events. Perhaps we should even consider bestowing titles on them no one else has; has any one tried “Sir Donor,” “El General Contributor” or “Princess Giver?”

We trust that these thoughts will provide guidance for you in your planning. Please let us know of any experiences you have had with both high value and lower dollar donors, and any conclusions you have come to.

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Direct response testing allows you to find out, on a small budget and with a limited sample size, what will and won’t work on a larger scale – in what we call the “rollout” campaign. At CBA we test creative approach, prospect and donor lists, incentives, offers and more to find the best performer, which will becomes the “control” mailer or email or phone message.

Knowing the statistical requirements for test volumes, we can predict with confidence the reliability of the test outcome. We’re able to project future revenue that will be generated by each fundraising campaign. Armed with this information we can help you create cash-flow budgets and annual income forecasts.

Testing is a sophisticated art and science. It must take into account your realistic budgetary constraints along with a determination of which kinds of tests will be the most productive for your needs. And the timing of testing is critical in order to get you moving in the right direction most quickly and efficiently.

Whether you’re a CBA fundraising partner or not, we invite you to contact us to discuss ideas that could bring your program to the next level.

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