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The outlook for text messaging as a fundraising tool

In the first part of our ongoing series on the future of telephone fundraising, Jenny Ramage explores the principles behind the use of text messaging as an effective fundraising tool and asks whether smaller charities can get in on the action

 

Cold calling is less effective today than ever before. Not only are there the huge problems with limited and poor-quality data, but societal pressures and legislation are making it ever more difficult to talk to someone on the phone from a standing start. As anyone who has received a sales call at 7.30pm on a Friday night, halfway through a mouthful of dinner, will understand, it can be quite an intrusive mechanism and is one that needs to be handled with care.

The telephone, however, is no less important in fundraising today than in the '90s when telephone fundraising in the UK really took off. Advancements in mobile technology have enabled non-profits to diversify their telephone fundraising techniques, making the phone more pivotal than ever.

 

The rise and rise of telephone

The sector today is mainly using the phone to reach an existing audience, where the charity has at least already generated a warm lead. Fundraising expert Rich Fox, co-founder of the first specialist telephone fundraising firm in the UK, Facter Fox, says, “the telephone is still a critical element in building relationships and upgrading donors. As acquisition becomes more costly and more organisations are competing for those donors who are out there, you need to look at maximising the value of the ones you are able to acquire. And that's where the telephone's greatest value is”.

Bethan Holloway, group account director at telephone fundraising agency Pell & Bales, says the reason the telephone is still so important in the fundraising mix is that “donors want a dialogue with the charities they support, they want interaction, and the telephone is an obvious channel for that”.

The key thing today is that phones can now do so much more than make phone calls.

 

Two-stage acquisition

Mobile phones have been a huge enabler in the growth of the two-stage acquisition process, which has become core to what many of the larger charities, including WWF, Unicef and Christian Aid, are doing today. The formula essentially involves using new channels in stage one to create leads and new prospects, and then, in stage two, converting them to a regular gift. Over the last three years, SMS text messaging has become a key driver in unlocking its potential.

It all started with Save the Children’s influential Gaza campaign, back in 2009. The charity placed adverts in all the press on a Friday, with a very striking and powerful image and a simple call to action: “Text CEASEFIRE to 81819”. By Monday morning, the campaign had generated 115,000 responses. The final total was 182,000.

This was incredible in itself, but then the charity had the inspired idea to contact a proportion of these supporters, get a conversation going to engage them further with the cause and, ultimately, ask for a direct debit. Of the 4,000 contacts called, around half were asked for a regular donation. The aim was to convert 5 per cent to regular giving and potentially generate £96,000 in annual income, but this was far exceeded: the actual conversion rate was 9.43 per cent, raising over £270,000.

“This was an inspiration for us”, says David Conway, supporter engagement manager at Christian Aid. “They showed everyone that it can work as a fundraising tool.” 

The formula worked so well, says Bethan Holloway, because “these asks lend themselves to a quick emotional response from a supporter, and a quick conversion response from the charity that has their data”.

Indeed, speed is of the essence. When an individual sends a text, their phone number pops straight into the charity’s database, meaning the supporter can be called back within a matter of hours, if not minutes. “Making contact with new donors as quickly as possible has always been a common goal in the sector, and a driver in lifetime value”, says Holloway. “SMS simply makes that easier, faster and more efficient”.

Christian Aid is among a number of organisations today that have taken the concept to the next level, and are now running campaigns that ask for text donations upfront. And these campaigns aren’t restricted to newspapers; the concept works anywhere you can print an SMS short code (a shortened version of a phone number, easier to read and remember than normal phone numbers) – DRTV, social media sites, and on billboards and posters in outdoor environments. By now we’ve probably all come across those posters on trains or bus shelters that ask for £3 via text to buy a mosquito net, a temporary shelter or an inoculation. And some charities have fundraisers out on the street asking passers-by to text in a micro-donation.

Crucially, the data obtained is reliable. “The great thing about asking a prospect to text in a micro-donation is that you're immediately validating their phone number, which has historically been a problem with street fundraising”, says Holloway.

It is also allowing charities to generate more promising, warmer leads. As Rich Fox explains, “if you can start a dialogue by compelling a prospect to give a small amount via SMS, you can then call them on the telephone to upgrade them and get many of them to consider ongoing, open-ended support, thereby greatly increasing their value to the organisation”.

The results speak for themselves: “Our conversion rate is between 10 and 15 per cent”, says David Conway. “And the regular direct debits we get from it average out at about £80-£90 per individual per annum.”

 

Making it work for you

With its poster campaigns, Christian Aid generated just under 50,000 prospects in the last financial year. Taking its lead from the 2009 Save the Children campaign, Christian Aid was able to make the concept work with a non-emergency based proposition: an international development issue (malaria).

“We've managed to unlock what works and where it works”, says Conway. His team has found that in particular, posters placed in outdoor environments (including on trains) have generated good results. “People have a longer time to engage with the proposition than if just skimming through a newspaper”. 

Can smaller charities get in on the action? Is it harder, for example, to make an SMS campaign work if you don't have an urgent appeal and/or one that attracts a lot of publicity? Perhaps. But Conway thinks it could work on a local level for smaller campaigns – it's all about getting the proposition right. “You need to present a simple need, and a simple solution. You don't want copy-heavy, waffling ads that present people with a seemingly insurmountable problem, with the call to action hidden in small print at the bottom. It just won't get a very good response.”

The mechanics aren't expensive in themselves: to get a short code costs less than £500. “If you just looks at the performance on the ads themselves, they can make their money back in year one”, says Conway. And this is before you take into account the subsequent conversions. As for media costs, “clever charities could probably get media space at a good rate”, he says.

“Some smaller charities have been surprised by how successful SMS can be”, says Bethan Holloway. “I would definitely say it’s worth a try. We’ve had clients whose SMS campaigns have generated tens of thousands of donations almost overnight.”

 

Testing the water

Many larger charities – WWF, UNICEF, Cancer Research UK, Shelter, ActionAid and Christian Aid among them – are continually experimenting with SMS asks in different environments. “To a certain extent, ongoing testing involves a throw of the dice”, says Conway – and larger organisations have the resources to do this.

Essentially, these organisations are looking at SMS as part of a wider, multichannel approach to fundraising. Their tests extend to all the various media we have at our fingertips today. According to Rich Fox, while using SMS and telephone as a standalone can produce strong results (particularly if the follow up call asks for open-ended automatic monthly giving), “if you also incorporate this as part of a wider multichannel strategy, the lifetime value of these donors can be greatly enhanced”.

We’ll be exploring some of these other channels in the second part of our special focus in next month’s issue, and learning how advancements in mobile technology have opened up new realms of possibility which even the smallest charity can take advantage of.

 

 

This article first appeared in The Fundraiser magazine, Issue 15, March 2012

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