Word of Mouth

Seth Godin Prediction: 90% of your sales will come from word of mouth or digital promotion by 2011. How do you change what you're doing today to be ready for that?

How does a charitable cause develop word of mouth promotion?
Web 2.0? Using the dizzying array of new tools?
Face to face? Facing the uncertainty of contract staff?
Door to Door? Regressing to the use of paid armies?
Events? Embracing sponsorship and crossing our fingers?
Perks? Invitations to the hockey game? Seriously?
Speaking tours? Overcoming time and travel constraints?
Viral campaigns? Using our donors to sell?
Something new? What can we do?

In the last decade, I’ve witnessed a series of trends in charities, all of which make the above list of “opportunities” less plausible:

1. The retraction of voluntary armies because of costs. Maintaining volunteers is not free. It requires dedicated staff time, the ability to support volunteers, and a vision of how to use volunteers to effectively to promote ideas and campaigns.

2. The decreased ability to afford travel in Canada. Travel budgets for charities are small. In a country the size of Canada, that means that it is very difficult to afford to pay for a staff member (or volunteer) to have a face to face relationship with anyone outside of the head office region.

3. Closure of regional offices to cut back expenses? Rent, computers, staffing, overheads. These are the inescapable facts of running an office in a region, and these costs increase with inflation and are a typical target in annual short term accounting which is required in most charities.

4. Lack of knowledge or even a fear of the speed of change in the online landscape? Facebook, according to the Washington Post, is a bad fundraising vehicle, but blogs may be required for fundraising communications and cultivation. Charities are in the business of helping address social needs, not mastering social media.

5. Minimizing staff costs? Charities are trying to shrink the HR budget. People are costly, anyone in business knows this. If charities can keep only core staff, then they can generate a better return on charitable investments…in the accounting office, at least.

6. Outsourcing donor relations work. Toll free lines, charitable processing, receipting are now typically being done by for-profit call centers and streamlined, high tech administration conglomerates. Again, this choice looks good on a spreadsheet, but how do you develop a one-to-one relationship with a donor through a third party administer?

So in a world where charities are paring down costs, word of mouth promotion is a costly proposition. How does one build and sustain relationships one-to-one, if that is the prediction of the future?

Charitable causes have been spoiled by relatively successful non-profit marketing through mass media, direct mail, and DRTV in the last decades. I’m sure some charities would challenge me on that assertion, but costs of acquiring and renewing donors in direct mail may seem expensive, but is a fraction of the costs of word of mouth acquisition without volunteer labour.

Many in the fundraising world will argue against Seth Godin, as direct mail revenues are not falling so precipitously as his prediction might suggest. Nonetheless, when I look at the behavior of anyone under 40 today with respect to their consumer choices, their philanthropic ventures or even how they carry themselves, they are influenced by peer pressure or very personalized marketing. Even advertising messages are trying to mimick a one-to-one relationship through personal testimonials, personality advertising, and very rarely through the mail, or even through email.

I believe Seth Godin's prediction, although I don’t agree on his timeframe. I honestly believe that charities need to work with their supporters to build more supporters. Viral campaigns work. There are various models out there: telephone pre-call, reminder call, followed by mailing a package of paper solicitations for donors to pass along to friends and family. Another is the “pass this email along.” Yet another is to develop “widgets” (little graphic identifiers with a hyperlink to a cause) for people to put on their webpage, Facebook profile, myspace page, or blog. All of these ideas are worth testing for charities.

And they should be tested today, not in five years, after direct mail acquisition and retention costs go through the roof.