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Canada Post kicks serious issues down the road



Boosting Fundraising email success with telesales

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vol. 31 • No. 2 • February 2018

The Authority on Data-Driven Engagement & Operations

The great data debate


How marketers win with customer and geodemographic data

// 3 Customer Centricity



Vol. 31 | No. 2 | February 2018 EDITOR Brendan Read -

VISA Canada: Canadians ready to switch from passwords to biometric authentication

PRESIDENT Steve Lloyd -

Location Based

DESIGN / PRODUCTION Jennifer O’Neill -


Advertising Sales Mark Henry -

Mail less, raise more

CONTRIBUTING WRITERS Jeremy Gilman Kim Arsenault Patrick Bartlett Paul Hagen, Diane Magers Leigh-Ann Clarke Gord Jamieson Steve Falk Stephen Shaw Larry Filler Maeve Strathy


Marketing & Fundraising: mixing the ultimate gin & tonic


302-137 Main Street North Markham ON L3P 1Y2 Phone: 905.201.6600 Fax: 905.201.6601 Toll-free: 800.668.1838 EDITORIAL CONTACT: Direct Marketing is published monthly by Lloydmedia Inc. plus the annual DM Industry Guide. Direct Marketing may be obtained through paid subscription. Rates: Canada 1 year (12 issues $48) 2 years (24 issues $70) U.S. 1 year (12 issues $60) 2 years (24 issues $100) Direct Marketing is an independently-produced publication not affiliated in any way with any association or organized group nor with any publication produced either in Canada or the United States. Unsolicited manuscripts are welcome. However unused manuscripts will not be returned unless accompanied by sufficient postage. Occasionally Direct Marketing provides its subscriber mailing list to other companies whose product or service may be of value to readers. If you do not want to receive information this way simply send your subscriber mailing label with this notice to: Lloydmedia Inc. 302-137 Main Street North Markham ON L3P 1Y2 Canada.


The great data debate Why your customer data may not be enough


Retailers make gains in mobile commerce Feature

Canada Post Canadian Publications Mail Sales Product Agreement No. 40050803

NAMMU: Canada Post kicks serious issues down the road INSIGHT


To survive, ad agencies must reinvent themselves

Twitter: @DMNewsCanada


Boosting email success with telesales February 2018

CMA: How charities can leverage their advantages and methods


The future of fundraising is digital Excellent Execution


POSTMASTER: Please send all address changes and return all undeliverable copies to: Lloydmedia Inc. 302-137 Main Street North Markham ON L3P 1Y2 Canada



Put CX leaders in the business driver’s seat Lloydmedia is proud to announce the appointment of Brendan Read as Editor. Brendan is an industry veteran, having covered the customer contact and direct marketing fields and financial services for a wide range of publications, including DMN. He comes to us from Frost & Sullivan where until recently he worked as a senior industry analyst. Please welcome Brendan and feel free to reach out to him. Brendan Read, 905.201.6600 x227 ❰

Customer Centricity

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VISA Canada: Canadians ready to switch from passwords to biometric authentication By Gord Jamieson


Gord Jamieson is Head of Risk Services,

Visa Canada.


ow many passwords do you use in a day? There’s one for your email account and one to log in to your computer at work. There’s your online banking account, maybe a brokerage account for trading stocks. There are the passwords for your various social media accounts. If you like to shop or pay bills online, there could be several more. If you want to keep your information secure, all of those passwords should be unique. You also should not write them down anywhere, for obvious reasons. No wonder a recent Visa Canada survey of 1,000 Canadians found that a third of Canadians have abandoned an online purchase because they could not remember their password. Keeping track of them has become almost impossible. That’s why many Canadians are ready to ditch passwords in favour of biometric authentication. Until recently, biometrics were only seen in fiction, like in gadgets used in James Bond movies. But today, the technology has come so far that most people have a device capable of biometric authentication in their pocket. According to Visa Canada’s survey, almost one-in-six (59%) Canadians were at least somewhat familiar with biometrics in some form, whether that is fingerprint or eye scans, voice or facial recognition, or something a little less common, like behavioural or vein pattern recognition. In fact, one quarter of people use biometrics every single day on their smartphones, allowing fingerprints to verify their identities. By creating a unique measurement of our physical characteristics, our identities can be verified with a higher level of certainty than with passwords and PINs alone. As consumers get more comfortable with this idea, there are big implications for the future of payments. The payments industry is continuously evolving as consumers look for new ways to make purchases conveniently and securely. Wearables, chip cards, smartphone and “tap” purchases have grown in popularity, and now consumers are increasingly embracing biometric recognition. One of the main issues that consumers have with the current online payment system is the large number of passwords they need to remember to make purchases. Biometrics solves that issue by eliminating the need to create unique passwords. Instead, their payments will go through once their identities are confirmed through unique physical characteristics, such as a fingerprint or voice recognition. 65% of Canadian consumers find biometrics easier than passwords, and nearly 50% of our survey respondents say the top benefit of using biometrics is that it eliminates the need to remember

passwords and PINs. Biometrics can also increase the security of the transactions by reducing the reliance on passwords. To make life easier, many people re-use the same password, or variations of the same password, for every account. Our survey revealed less than a third (31%) of consumers use unique passwords for each of their accounts, which puts them at greater risk of being hacked and having personal information stolen. Retailers should understand the changing needs of their customers and, consider how they can benefit from biometric authentication. As we mentioned earlier, a third of Canadians have abandoned online purchases because they could not remember their passwords. They would rather go somewhere else or not make the purchases altogether, instead of resetting their account details. By integrating biometric technology into the payment experience, organizations can make the process more convenient and secure, and improve customer satisfaction. While consumers are growing more comfortable with biometrics, they still have concerns. Given the increase in data breaches in recent years, and the growing severity of those breaches, security is a high priority. Respondents to the survey had two main concerns: how personal biometric information is stored, and how the technology authenticates and grants access to accounts. Understandably, having biometric information stolen is a top concern for consumers, because of the nature of the information. Because biometrics are measurements based on individuals’ physical characteristics, if they are stolen or compromised, they can’t be changed. How and where the information is stored, and making sure it is secure, will be key to getting consumers to trust the technology. Respondents also didn’t have a firm understanding of how biometrics authenticates their identities. Approximately 44% of consumers currently believe that biometrics are more secure than passwords for authentication. To win over the other 56%, payments companies will need to inform the public about how biometrics works and the advantages they present. This is one of the main hurdles to the wider adoption of biometrics. It’s clear that Canadian consumers are ready to ditch their passwords in favour of the ease and security of biometric authentication when making payments. As awareness and trust in the technology spreads, organizations need to begin exploring how they can integrate biometric technology into their payments experience, or risk being left behind. February 2018

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Location Based

The great data debate Why your customer data may not be enough



s an industry veteran committed to helping organizations leverage data for better decision making, I am often reminded of the great Yogi Berra’s remark: “It’s déjà vu all over again” when I hear marketers debate the benefits of individual versus geodemographic data. This argument is perhaps even more relevant in the era of Big Data, when the volume, velocity and types of data collected by organizations have increased exponentially. The question as to which data type is best may seem obvious. Why wouldn’t businesses prefer using their own customer point-of-sale or transaction data rather than geodemographic data from an outside source that’s been aggregated or modelled to a geographic level? But before jumping to conclusions, marketers should first ask themselves the following questions: ❯❯ What problem are we trying to solve? ❯❯ What insights are we trying to acquire? ❯❯ What data has my organization already collected? ❯❯ What resources (money and people) are available to acquire and analyze data? The answers will vary depending on industry sector or organization. For instance, individual-level February 2018

data are excellent when targeting customers for up-sell and crosssell campaigns in industries with high-frequency transactions, like banking, telco and grocery retailers. But individual-level data are not as useful for industries with high-value, low-frequency purchases patterns, like automotive, home furnishings and appliances industries. The new reality is that marketing organizations should use a combination of individual and geodemographic data to optimize customer insights, improve targeting and communications, and realize the most value from their investment in collecting and managing data. First, let’s be clear on what we mean when we talk about using geodemographic data. While there are many definitions, I prefer the following: using the attributes of small areas as surrogates for individual demographics, behaviours, attitudes, beliefs or preferences — usually for the purpose of linking disparate data together to provide an integrated view of one’s customers. In a perfect world, individuallevel data on your customers or prospects would almost always produce superior analytical or targeting solutions. After all, your transactional data would show what they bought, when they bought it and how much they spent. But the world is not perfect and

the data that we collect about our customers is often incomplete, leaving marketers without the critical information they need. For example, while individuallevel data may provide very specific information about customer purchase behaviour, they don’t provide contextual information on customer motivations, aspirations and social influences. But conducting primary research to collect this psychographic data is generally cost-prohibitive. Geodemographic data, however, can provide this kind of information much more cost effectively. In addition, geodemographic data can give marketers insights into other key areas, including the following: Share of wallet Companies with rich transactional data can easily determine how much a customer spends with them over a specific period. But this information gives no insight into the percentage of that customer’s spend in a specific category, which would help determine the customer’s loyalty and untapped potential. For example, loyalty cards allow grocers to know exactly how much a customer spends with them per week, but they don’t know that customer’s total grocery spend (or wallet size) per week. And a non-for-profit may know how much a donor has contributed in the past year but has no clue

about the donor’s total charitable contributions. Consumer data available from geodemographic segmentation systems like PRIZM can provide data at the six-digit postal code level as a proxy, allowing marketers to factor in this key information and determine share of wallet. Customer acquisition Even the best customer data often has little to offer when it comes to prospects. But organizations can leverage individual-level data on existing customers with geodemographic data to create profiles of potential customers and locate “lookalikes” on the ground. For example, a hospital foundation typically targeted its direct mail appeals to households near the facility. When a PRIZM analysis of its donor file identified prospects with similar demographics, lifestyles and values in postal codes many miles away, the foundation added those neighbourhoods to its campaign. The result: thousands of new donors and a 250% increase in donations. By leveraging both individual and geodemographic data, organizations have the best opportunity to achieve success. To borrow a Yogi-ism, if you don’t know where your customers are going, you might not get there. Larry Filler is a senior vice president, consulting at Environics Analytics ❰

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Location Based

Retailers make gains in mobile commerce

Retailers must think like eCommerce companies to survive and grow BY JEREMY GILMAN


hat was once every marketer’s nightmare—the sight of someone pulling out their phone in a retail store to price-compare online (a.k.a. showrooming)—is actually not as jarring as one might originally think. In this age of consumer mobile maturity, the use of smartphones in stores can become major brand differentiators. They allow retailers to communicate personal messages to each shopper, provide them with real-time insights into inventory, or even help drive up loyalty. Some brands are getting this mobile-first very, very right. Our Mobile Maturity Model: 2018 RETAIL study, conducted with M3, gathered by secret shoppers from 60 different retail stores based on six areas that provide insights on overall in-store mobile experience for customers. These areas break down to reveal context around precise moments when consumers interact with the brands. And if retailers pay attention, they could use these areas as a playbook to craft unique in-store experiences that meet their customers growing expectations. Of the six areas — pricing, inventory, product reviews and advice, personalization, store guidance and checkout and loyalty — retailers currently show more maturity in the first three areas. Of these, personalization has had the most improvement over the 2016 data, jumping 64%. Here’s an in-depth look in how retailers are faring in each area that offers guidance for how they should navigate their business in today’s web/mobile buying era: 1. Pricing comparison. Pricing is a reality of mobile-equipped shoppers, and consumer expectations in this area have risen over the last year. Customers need to accurately assess the price of a retailer’s goods online, but this task is ❱

tricky since this data could change by geographic information and over time. This metric is the only one in the report where retailers marked slightly worse overall than in 2016. This proves pricing is an area where retailers could find new opportunities that equate to consumer wins. With geo-targeting and loyalty information, retailers can target regions where certain goods are hotter commodities — think bread and toilet paper in advance of a hurricane. Or prices can be tailored to store loyalty. Stores could monitor for in-store Wi-Fi usage that indicates customers are cost comparing and then, instead, offer to price match what that person finds online. 2. Inventory. Inventory accounted for the highest ranking metric in the 2017 study, and it’s one that big box retailers excel at. The proliferation of the Internet of Things devices has enabled retailers to boost their inventory mobile maturity. By having automated data aggregated through sensors, stores can connect their back-end systems with the front-ends displayed on customers’ mobile devices. Nordstrom has taken home the top ranking in this category for the past two years. The store has taken a head-on approach with its in-store mobile users, allowing customers to pick out clothes on their website and try them on in the store later. This push for mobile advancements will likely continue in 2018, with a pledge from the company to invest $540 million in technology. 3. Product reviews and advice. Shoppers, particularly of pricier items, make complex decisions when they choose one product over another. And stores that are transparent with product reviews and advice enable these patrons to feel confident they’ve

made the right decisions, which has the added benefit of driving up loyalty. Most retailers now are savvy to presenting reviews in a mobilefriendly way for customers on their sites. But leading-edge retailers that also focus on social media are outshining others. They combine social reviews with their typical product reviews to form an integrated feed of information for their customers to rely on. In 2017, Home Depot, Lowe’s and Best Buy rounded out the top three ranking brands. 4. Personalization. Consumers want brands that know what they want and when they want it. Still the lowest ranking score overall, personalization had the most substantial improvements in this year’s survey. This area is difficult, because it cuts through so many data points and relies on brands to understand shoppers’ nuances. For example, someone buying an anniversary gift the day before may be more willing to buy certain items at a higher price than their typical spending habits. Customer segmentation is the best path to achieve personalization, though it can be expensive to implement. For now, online retailers still have an edge on personalization overall—easier since they have the benefit of tracing every single product a shopper peruses in real time—brick and mortar stores are catching up. 5. Store guidance. When a customer knows exactly what they want to buy it’s up to the store to guide them directly to that product. This year, Lowe’s topped all other competitors in this metric through its mobile-friendly site that shows customers what aisle and what bin contains the product they need. This strategy works

extremely well in stores with a large footprint or those that have smaller sized products and huge inventories. In-store tracking technology has also become much more advanced, offering consumers shopping experiences similar to the one they are used to with GPS to find items inside a big box store. 6. Checkout and loyalty. It may seem like these two topics are oddly intertwined, but checkout is often where loyalty is rewarded through savings programs and discounts. Some stores, like Apple, are driving loyalty through their checkout ease. Encouraging customers to use mobile apps to check themselves out has boosted Apple in the eyes of its loyal followers, taking out one of the biggest pain points of shopping. For any store, though, data is a strong determiner of loyalty, and stores that switch to selfcheckout or mobile checkout have more opportunity to capture information. That helps retailers know how they can incentivize future purchase and provide incentives to come back to their brands versus competitors for the same products. Overall trends Mobile technology isn’t going anywhere, and retailers are getting savvier to the fact that they need to enable their shoppers to use mobile devices as consumer tools to keep them coming back to the brands. The quality and sophistication of retailers’ approach to mobile is going to continue to grow in the coming year. Retailers should continue to seek out new mobilefirst solutions to help them gain market share in what is shaping out to be retail’s most competitive era yet. Jeremy Gilman is senior vice president-strategy at DMI (Digital Management, Inc.) February 2018

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NAMMU: Canada Post kicks serious issues down the road BY PATRICK BARTLETT


ublic Services Minister Carla Qualtrough announced the government’s decision on the Canada Post review on Jan. 24, 2018. The highlights included termination of the Community Mailbox conversion programme, development of an enhanced accessibility program for individuals with accessibility issues, promotion of remittance services and exploring the use of automated lockers for parcel delivery. Minister Qualtrough has been a provincial and national leader on accessibility issues. As a blind paralympic athlete, she has strong credentials and a clear interest in this matter — especially as it relates to community mailbox access. There will be an Advisory Board established to help ensure access. Canada Post has been instructed to do the following: ❯❯ Improve relationships with labour. The current management had no relationship with labour. Instead there is a fresh start in 2018 with a new chair of the Board of Directors, Jessica L. McDonald, a new CEO, as Deepak Chopra is retiring March 31, 2018 and most of the board will turn over this year. ❯❯ Change the corporate structure so that profits can be reinvested in Canada Post, rather than being paid out as dividends to the government from commercial Crown corporation. Canada Post was one of three commercial Crown corporations whose mandate was to provide a return on investment to the government in the form of dividends. This is a moot point as Canada Post has not paid dividends for nearly 10 years. ❯❯ Consider Alternate Day Delivery. The Postal Task Force studied Alternate Day delivery. These are their conclusions: February 2018

“A recent analysis conducted by Canada Post concluded that savings of $74 million per year would be achievable but only after a lengthy implementation period that could take up to five years. Some of the issues identified for the implementation of alternate day delivery are: ❯❯ Implementation challenges: Route and depot consolidation, parcel delivery integration and community mailbox conversion. ❯❯ Operational complexity: A letter carrier could have more than one route. ❯❯ Need for an alternate parcel delivery approach: Parcel delivery would remain time sensitive and would need to be delivered daily. ❯❯ Potential reduction in Neighbourhood Mail revenue: Delivery schedule of Neighbourhood Mail may no longer be possible so advertisers may prefer other options. ❯❯ Requirement to renegotiate some collective agreements and make changes to the Canadian Postal Service Charter. Despite the implementation challenges identified above, this option is strongly supported by Canadians. It is reasonable that in an environment of declining mail volume and in consideration of the $74 million in potential savings, this option could be investigated further but should be implemented through the use of pilot exercises.”– Postal Task Force Report Here are the issues that the Minister’s announcement does not address: ❯❯ Regulator. The notion of a Regulator had been proposed by several groups, including NAMMU. Canada Post will maintain the same flexibility it has in pricing today. No Change! ❯❯ Rural Moratorium. Maintaining the moratorium costs the Post Office $150


million per year. Mailers pay for this social program through higher postage fees. The government has not addressed this issue and is content to have Canadian business mailers pay for this social programme. Long term viability. The government has not addressed the business model issues. The Task Force report predicts that Canada Post will be losing in excess of $700 million annually by 2026. There are only minor tweaks in this review that will not come close to filling the financial void.

NAMMU position As expected, the government has kicked the can down the road. It has not seriously addressed the business model erosion that Canada Post faces. For the National Association of Major Mail Users (NAMMU), there are three critical issues coming from this announcement: 1. Labour certainty The government hopes the board and CEO changes will allow for a productive relationship with the Canadian Union of Postal Workers (CUPW). It is clear that the government doesn’t want a repeat of the summer of 2016. CUPW has demonstrated its skill in the negotiation process. In the past two negotiations, Canada Post has been aggressively pursuing concessions, and CUPW has been playing defence. It appears for this round they may have the opportunity to go on the offensive. So this round will be different from the last two rounds. It is unlikely that Canada Post will lock out the union. Therefore, one would expect to see rotating strikes from CUPW occurring in fall 2018, not the summer.

thought that they didn’t need mail delivery every day. But this plan is not good for business mailers which support Canada Post financially as it will make mail, and especially marketing mail, less competitive against digital competitors. 3. Price certainty There is no change to the way pricing is set. NAMMU must be vigilant to ensure Canada Post doesn’t try to fix or band aid its business model issues by taking extraordinary price increases. Is the change from a commercial Crown corporation to a Crown corporation a Trojan Horse? This change may mean nothing at all. Or it may along with the leadership change, bring a less commercial attitude at Canada Post. There is no doubt that Canada Post’s direction is moving to more of a policy mandate than becoming a commercial entity. It certainly moves Canada Post further away from any form of privatization. This direction is the opposite of the international scene where postal services, such as the UK have gone through an IPO or such as Belgium where 50% of posts are held by private investors. Accenture, in its annual study of Posts, consistently concludes the most successful posts are the ones with less political interference and greater distances from governments. It is a time of uncertainty in the Canadian Mailing Industry as Canada Post struggles with its business with the limitations placed on it by the shareholder. NAMMU and its membership must be vigilant and ensure its issues and concerns are well understood by the new management team. Patrick Bartlett is executive director, National

2. Alternate Day Delivery Politically this is a winner for the government as most Canadians

Association of Major Mail Users ❰

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To survive, ad agencies must reinvent themselves “It is the work of advertising to make customers – not just sales.” – Magazine Ad for N.W. Ayer & Son, 1931

In the early part of the last century first-generation agencies like N.W. Ayers & Son (1869) still felt it necessary to promote the concept of advertising as a way to “make customers”.

By Stephen Shaw


d agencies are recognizing their time may be up. No one is going to turn the ad spigot back on. Brand marketers are being challenged to find better ways of spending their money, mainly by improving the customer experience. Which puts ad agencies in a tough spot: how do they give up an operating model that has barely changed in more than a century? The surge in ownership of smartphones and the pervasiveness of social media has brought digital disruption to the doorstep of agencies. Even as ad agencies watched traditional media buying decline, they counted on digital advertising to make up the difference. That is, until last year, when advertisers blew the whistle on a “crappy media supply chain”, led by the most vocal critic – and biggest spender of all - Proctor & Gamble (Ad Age, Jan.29, 2017). Their chief concerns: ad fraud, proof of viewability and brand “safety”. Advertisers also called out the agency practice of arbitrage: buying ❱

digital media and selling it to them at a higher price. Ironically, the first generation of agencies started out doing exactly that in the horse and buggy era when as media brokers they earned commissions selling newspaper space to advertisers. Long in denial over the shrinking role of advertising, ad agencies are now being displaced as the “strategic provider of record”. Either they figure out how to solve problems other than through advertising, or they will fade into history, becoming as much an ancient memory as patent medicine ads. “It’s pretty miserable out there,” Serge Rancourt, founder of the fast-growing Toronto start-up agency No Fixed Address told Marketing (now Strategy) magazine published November 11, 2016. “Clients feel like they don’t’ get the value from their agency and the agency feels like they don’t get the billing to make money. So we said we need to reinvent this. The premise was clients deserve something better.” I interviewed Nick Dean, former head of the agency KBS Canada, who left the industry to head up a medical cannabis company, and he agrees. “I think the traditional agency model is dead at this point. I don’t know when it happened, but we commoditized ourselves. I think agencies are in a position where they need to reinvent themselves in some way, shape or form.” After a meteoric rise through the agency ranks, Dean grew disillusioned with the state of the business. His agency was caught in a vicious circle between the pushback he was getting from clients over hourly fees and the pressure from his parent company to hold firm on his margins. On top of clients demanding more for their money, agencies are feeling the heat from the management consultancies that have moved aggressively on to their turf, competing for lead agency assignments. Four of the major consultancies now rank amongst

the largest agencies in the world, led by Accenture. For example, in fall 2017 Fiat Chrysler named Accenture Interactive its global experience agency of record for Maserati, explaining that, “We want to engage with our customers across all channels in more meaningful ways. Accenture Interactive [has] the capabilities to manage our customer touchpoints holistically so we can deliver great experiences that build consistent, seamless and authentic interactions with our discerning customers.” Even the phrasing of that publicity release must sound like a foreign language to many agencies: a language they never bothered to master until now. Instead they

as strategic partners, seen by owners and executives as part of their inner circle, relied upon to bring fresh outside perspectives. But as agencies were swallowed up by holding companies, those personal bonds, formed through a shared purpose and responsibility, were lost. Ownership of agency relationships was handed down to mid-level apparatchiks, shutting agencies out of the C-suite. The waning influence of ad agencies over business direction and strategy was costly because it made them interchangeable, opening the way for procurement to get involved. Pitching for new business was reduced to creative shootouts, where new ideas were

As agencies reorient their service offering around the customer experience, everyone is jockeying to be the lead strategic provider (Source: Forrester Research).

have treated communications technology advancements as just another media opportunity. But these agencies failed to see the larger picture that was emerging: a connected society with the power to dictate the terms of engagement. Their line of sight extended only as far as the next earnings report which hinged on increased ad revenue and production fees. Identity crisis The long slow decline of ad agencies began in the mid-1980s when many of the large marquee shops chose to go public or were acquired and consolidated. Prior to that, agencies were considered

given away in the hope of being crowned the winner. That led to the devaluation of brand strategy as a differentiator. Marketers only wanted to pay for project execution, not the thinking behind it. Since the agencies’ revenue model was anchored in the “30-second spot”, they had to make money producing campaigns, which worked as long as the triangulation of ads, media and messaging was the dominant model. But once that mass media model was crippled by audience fragmentation and ad avoidance, agencies experienced an identity crisis. Could they keep trying to be all things to all people? As profit margins got squeezed February 2018

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INSIGHT by fee-haggling, ad agencies found it increasingly difficult to attract the top calibre talent they required to challenge the status quo. The head count restraints imposed by the holding companies further shackled them. Meanwhile, marketers started to question whether their ad agencies could bring them the innovative solutions they needed. They had come to realize that digital channels were no longer simply a minor part of the media mix but had become their primary connection point with people. At that point digital service providers were invited to bridge the strategic gap, undercutting the leadership role of the ad agencies that still looked at digital as a campaign tactic. The expanded roster of strategic agencies added an extra layer of complexity to managing customer interactions across touchpoints. Who now had responsibility for defining the total brand experience? Which is how the management consultancies first got involved, trading on their reputation as change agents.

February 2018

Marketers accepted them as a business partner who could help them avoid disruption by helping them become customer-centric. Too little, too late? Improving the customer experience by transcending channels has now become a strategic priority for just about every business today. And that has left the ad agencies ghettoized, forced to compete with online platforms like Tongal which connects businesses to a wide network of creative freelancers. But agencies have begun to fight back: Introducing consultancy practices of their own, reorganizing internally and expanding their capabilities to include more datarelated disciplines. Yet is it too little, too late? Has the agencies’ past caught up with them? Some companies have lost faith in their agencies to adapt quickly enough, choosing instead to bring marketing services in-house. That way, they can be more agile, shortening the time

between experience design and delivery. But there is a big cost to bringing agency work in-house — the quality of the thinking. Creative thinking is not a manufacturing process. Ideas that resonate do not come off an assembly line. They are born out of inspiration: the offspring of art plus insight. They are incubated and nurtured into existence. Ideas power the central narrative of every brand. They connect what the brand stands for with the story it tells. A great idea is a unifying force, helping everyone understand how the brand can make a difference in peoples’ lives. And that idea must be closely associated with their belief system — with how they see the world. All of that is very tough to pull off if creative work is being auctioned off to a stable of freelancers indifferent to the brand vision. Agencies have always performed best functioning as a creative hive — turning observations of the human condition into an emotional connection with people. Where

they have gone astray is losing sight of that core mission: caught up in creating campaigns when their real job was to create customers. Today agencies have an opportunity to return to their roots and lay claim to the future of marketing: to take what they have always been good at — brand innovation — and marrying it to the invention of unique experiences which create value for customers. As Sir John Hegarty, founder of the U.K. creative agency Bartle Bogle Hegarty writes in his book, Hegarty on Advertising: “An advertising agency should not expect to revere or reflect the status quo, but to challenge it — help redefine it.” Agencies don’t have to put the past entirely behind them. They just have to preserve the part they were always best at: figuring out how to bring inspiring ideas to life. Stephen Shaw is the Chief Strategy Officer of Kenna, a marketing solutions provider specializing in customer experience management. He can be reached via e-mail at ❰


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Boosting email success with telesales A proven low-tech solution for your next email campaign BY LEIGH-ANN CLARKE


here will be an estimated 139 billion business emails sent and received this year, according to the Radicati Group. Breaking this statistic down even further, the average office worker sends 40 business emails and receives 121 business emails a day. Amongst all this digital correspondence lands your email marketing campaign. How will it stand out? Unless your B2B email campaign can penetrate through the noise and has a viral-worthy headline or subject line your message will get lost or forgotten. In our experience, a tried-and-true lead generation method is telesales. Using telesales to supplement an email campaign brings a low-tech solution to the digital-driven sales space. The ups and downs of email campaigns Email is quick, accessible and cost effective. It is the easiest and most efficient way to reach many people in many places with just a few clicks. Apart from spreading your message or reaching out to prospects, email is also a good way to test headlines, copy and messaging to see what works for what targets. This insight gives you data that you can apply to other media used in lead generation or sales campaigns. What is not guaranteed with any digital correspondence is engagement. Open rates across B2B email campaigns vary by industry, company size and simply whether the recipients have time to open and read your emails: something where there is no data or analytic assurance. According to a 2017 report by HubSpot, if a company sends 16 to 30 campaigns (defined as targeted individual emails sent to a portion of a database and not an e-blast) a month, companies see a median open rate of 32.4%. The click-through rate averages at 6.5%. If a company however sends two campaigns or fewer, the open rate is two times less. This means companies must dedicate time and resources to roll out several email campaigns over a set period of time to not just get the desired clicks, but to have the recipient recognize the company in their inbox and open the email. While an email campaign can blanket a large portion of your list or database, if it isn’t targeted to the correct prospect,

What is not guaranteed with any digital correspondence is engagement. Open rates across B2B email campaigns vary by industry, company size and simply whether the recipients have time to open and read your emails. â?ą

February 2018

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Telesales gets a bad rep, especially among certain industries who view it as old-fashioned, obtrusive or ineffective. But leading companies ranked telesales as the most effective form of lead. the campaign essentially goes to waste or quite literally the junk box. What makes an email campaign successful — apart from a killer subject line and offer — is your prospect data or list. A poorly researched list or old data means wrong targets and bad prospects. 56% of executives said that bad data led to lost sales opportunities, reported a 2016 eMarketer survey. Before the creative, copy and offer or call to action are even composed, your email campaign objective must be clearly defined and your list of targets vetted to ensure the people are actually in need of what you’re selling or offering. In Canada lists must also abide under Canada’s Anti-Spam Legislation (CASL). It is difficult to accumulate both a CASL approved email and calling list. Companies need consent to send a Commercial Electronic Message (CEM), there are few exceptions February 2018

for expressed consent, but only in the context of an existing business or non-business relationship, or if recipients conspicuously publish their electronic contact information or voluntarily disclose it without indicating they don’t want to receive communications. Companies must also consider this legislation when composing their lists of recipients and when planning email campaigns, or their efforts may be cut short. CASL fines can be as high as $10 million for businesses. Telesales gives campaigns a boost Telesales gets a bad rep, especially among certain industries who view it as old-fashioned, obtrusive or ineffective. But according to The Black Report, published in 2014 by 360 Leads, leading companies ranked telesales as the most effective form of lead generation

at 44.7% with email marketing at second with 31.7%. Telesales can easily give email campaigns a boost if the timing is right. Combining telesales and email campaigns gives an organization a number of different touchpoints to reach prospects. The Black Report also found that companies who communicate three or more times with leads are more than twice as effective at achieving their targets. As companies are inundated with email and text messages, telesales offers a junk-free way of communicating with prospects. The State of Inbound 2017 report, published by HubSpot, found that the phone is the most effective and successful channel in connecting with prospects whether it is the CEO, manager, or employee making the call. While the report finds the majority of people prefer communicating via email for business purposes, picking up the

phone is still the most effective when it comes to closing a deal or getting a meeting. It’s no wonder then that 70% of B2B sales come from human interaction, 56% of which come from telesales, reports Russell Meiselman in his LinkedIn article “Is Telemarketing effective?” While the email can be seen as the first touchpoint or introduction to your prospect, a phone call solidifies a channel of communication. A phone call with the right introduction and targeted to the correct prospect allows you to have a personal and undisrupted channel where you can truly listen and understand what your prospect may need and want. This is the type of feedback you may never get from just an email. 360 Leads works with several high-tech companies on similar campaigns combined with direct mailers. From companies in the computer and IT industry to distributors of truck and trailers, we’ve seen integrated lead generation campaigns, combining telesales and direct mail have a 6,000% ROI and another that resulted in more than 1,000 qualified sales meetings. It is the combination of researched prospecting, good lists, correct targeting and integrating channels of communications that give your message or offer the best chance to connect with your targets. All businesses use email to communicate. However competition for attention in the inbox is rather difficult. Not only are people receiving more emails than ever, software, applications and algorithms are becoming more advanced in filtering out what they read as spam or junk mail. For all the software-driven programs and digital services available to marketers today, the technique that truly works is the low-tech solution of a researched, planned outbound calling campaign that may be the missing, more personal piece in closing more business. Leigh-Ann Clarke is Vice President and General Manager of Clever Samurai and 360 Leads. She helps drive high quality, client-centric services to support Clever Samurai and 360 Leads’ business growth objectives in marketing, communications and inbound and outbound sales. ❰

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Mail less, raise more How listening to your donors helps you reduce the amount you spend to raise a dollar BY STEVE FALK


ere are some industry slogans you won’t likely see promoted: ❯❯ Drink less wine — a message from local vintners. ❯❯ Keep your old car longer — brought to you by your local car dealers. ❯❯ Use less mobile data as it can wait until you’re home — the cell phone industry association. As an owner of a company that depends upon the production of fundraising direct mail, I’m going to suggest, probably contrary to your expectations, that you send less mail. Send less mail: you’ll spend less to raise a dollar Here’s the simplified scenario. I carefully pick one donor and handwrite them a letter. It mentions the personal attachment I know they have to the charity, and suggests a gift that is appropriate to their past ❱

habits. Eureka! It’s highly likely that I’ll get a 100% response rate and a very low cost to raise a dollar. As I expand this to include 2, 3, 50 and 1,000 donors, we all know that my success will lower. With each step up I’ll increase the cost to raise a dollar. Don’t we all wish we could be as successful as that one-onone letter? The trick is to find the tipping points in results versus efforts, and to not miss opportunities to identify, as accurately as possible given the size of the donor universe, who is most likely to give, how often and how much. You’d like to send fewer pieces of mail with a success rate closer to my one-piece campaign, wouldn’t you? There are two strategies that are trending these days Building and using more detailed donor identities is one of them. The Agitator (a free daily blog about fundraising and associated

discussions that I highly recommend), recently approached this from a number of angles. The gist of it is, if you know a bit more about your donor identity, and then personalize your message, you’ll get improved engagement and outcomes. The second strategy is combining this with some analytical tricks to mail the engaged donor less frequently. It ends up costing you less without compromising the gross level of giving. More on that below. Why mail a picture of cat to a horse-lover? Identities can range widely depending upon your organization. Some identities you may already know. Others you may have to collect with surveys and other tools. We’ve been using identity modelling to build gift grids that best speak to a donor’s habits (RFM, Recency, Frequency, Monetary) and likely appetite for giving. Now it’s time to broaden the identity to include other

attributes. For instance: Does a donor identify with the hospital’s cancer care, or with the dialysis program? ❯❯ Is their relationship based on being a patient, or a relative of a patient? ❯❯ Are they a hiker or bird watcher? ❯❯ From Ontario or Quebec? ❯❯ Vision impaired and requiring accommodation for that? You can probably imagine some that fit a group of your donors. Once you think you have some meaningful identities, test them Does it improve response if you use large print, place a photo of birds versus hiking trails, or zero in on a photo and caption about kidney dialysis versus cancer care? A/B testing has never been easier thanks to low cost full colour variable printing You don’t need to pre-print different shells but can let the data drive the dynamic imaging on the letters as they print, then February 2018

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Fundraising test your theories. If an identity proves to be productive, then focus more attention on that group, find more like them or ask your other donors if they have similar tastes. Since they are highly engaged, you can probably start mailing them less frequently with the same outcomes. Let’s get to that now. Ideally you want to mail fewer pieces and mail smarter — and that’s easier said than done Our instincts on how often and whom we should ask for a gift are just that — instincts — and they can lead us to incorrect

conclusions. Do you really know when mailing too often actually degrades your efforts? Can you tell which donors would be fine only receiving one piece of mail per year or whether they could miss a couple mailings? Without a good sense of this information, most organizations will default to mail lots and mail often and hope that will give the best results. Your donors are speaking to you through the data Listening to what they are saying often takes some careful analysis, but it’s now available and easier than ever to run on your file. Caity Carver of Donor Trends told me recently: “The power to predict your donors’ behavior is in your hands. With technology, machines are doing all of the heavy lifting, isolating the donors you should focus on now, and those that you should not. This leads to increases in net revenue, retention, and overall efficiency.” The goal is to identify donors who will need the most engagement That group will get your most powerful package and more often.

You’ll be mailing fewer pieces and being smarter about it and achieving the balancing act of not losing your net revenue.

Do you really know when mailing too often actually degrades your efforts? Secondly, you’ll identify the segment that is highly engaged and will suffer from too much mail; they won’t need as many mail pieces to generate the same revenue. This group is tested with less mail. They might miss a couple of packages per year. You’ll be mailing fewer pieces and being smarter about it and achieving the balancing act of not losing your net revenue because costs will also come down.

value of limiting your email use, as too much can be damaging your outcomes. There is even a calculation that estimates the damage per thousand emails that go to spam: $1,309 (see The Agitator - Volume has been tested. The results are in). That’s a conversation for another day. Whatever the channel, paper or digital, you can mail less and raise more by listening to your donor data. Steve Falk is President, Prime Data. Always

How much is too much? There are similar discussions about the

testing, re-testing and learning to effectively use emerging technology to realize the most effective results for our fundraising clients.

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Marketing & Fundraising: mixing the ultimate gin & tonic



magine you are a fundraiser going into a meeting with marketing and they have a BIG IDEA. It’s a good one. And then they say, “You can fundraise with this, right?” This is definitely not what we would call integration of marketing and fundraising. But it’s what often happens. Sometimes trying to get marketing and fundraising to work together is like trying to fit a square peg into a round hole. If your marketing colleagues have been working on a big awareness campaign for the year-end time period, and they come up with a great big idea, wouldn’t it be ideal for your donors and prospective donors if your fundraising efforts could reflect that same big idea? We think yes. But how often do we have to alter fundraising communications and strategy — and perhaps even dilute them — in


order to make it work? The answer, unfortunately, is too often. It doesn’t mean that integration doesn’t work between marketing and fundraising. It just means we aren’t making it work. Integration defined The guidebook “One Voice - A Best Practice Guide to integrated communications” published by CharityComms, defines integration in the following way: “The concept of making all methods of marketing — advertising, direct marketing, public relations, digital engagement, etc. — work in unison across all aspects of an organisation’s activities, rather than in isolation.” What’s important in that definition? Making all methods of marketing work in unison, rather than in isolation. Working together does not mean working in the same way. It does not mean the big idea has to be used

Who should be at the centre of charities’ communications whether awareness or fundraising-focused? Answer: the donor. verbatim in fundraising activities. It means they need to work in unison. They need to complement and work together in the channel they are in. Why integrate? There’s no question about it. So why would we — or wouldn’t we — integrate? Paul Vanags, who is head of Oxfam’s public fundraising, wrote in his Sept.19, 2017 Critical Fundraising blog, “[Integration is] a strategic choice.”

There’s no question about it. So why would we — or wouldn’t we — integrate? Who should be at the centre of charities’ communications whether awareness or fundraising-focused? Answer: the donor. Donor-focused integration means that all communications engage and inspire donors — or prospective donors — are part of the story. That means it has to be a story with a consistent message, problem, solution, offer, and emotion that February 2018

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Fundraising connects with the donor. When we think about integration, we have to think about the audience. The people we are connecting with or reaching through our communications. If a donor sees the same kind of message across various channels a number of times, it has a psychological effect on them, and their chance of responding is significantly higher. That is good integration.

It’s like oil and water; they don’t mix. Too often: marketing tells fundraising what to do. ❯❯ fundraising doesn’t see their role in marketing, and vice versa. ❯❯ marketers’ performance and fundraisers’ performance aren’t evaluated on outcomes that relate to one another, thereby silo-ing their departments. ❯❯ these departments are already ❯❯

Too often, marketers’ performance and fundraisers’ performance aren’t evaluated on outcomes that relate to one another. What does integration NOT mean? Integration does not mean that every communication has the exact same message. If you try to find one single message that will speak to all forms of communication, all channels, and all audiences, you are likely to find what Paul Vanags called “lowest common denominators” in his blog. We couldn’t agree more. But that’s the result of thoughtless and lazy integration, not integration in and of itself. Integration isn’t about the exact same creative or the exact same message. Instead it is about unity between them. It’s about a connection between them. Paul Vanags talked about the “loss” that can happen from integration, for example: loss of meaning. This would be a huge loss, to be sure, but again — this is when integration is done wrong. The reverse of that is your organization continually going out with different and disconnected messages. We see this happen all of the time and we believe there’s an even greater loss in that. It is also a waste of resources and opportunities. Oil & water We think the bigger problem than whether integration works (we know it does) is how marketing and fundraising usually work together. February 2018

silo’ed. Their perceptions of one another aren’t reality. They don’t have relationships. They have tensions. They have frustrations. They have barriers. They lack empathy and understanding. Sometimes it boils down to leadership. If leaders are doing their job right, they won’t suggest status quo or blindly following dogmas. They’ll encourage deeper, critical thinking, which often manifests in integration. We think that leadership should encourage integration. When we bring our best thinking, skills, resources and people together — including budgets! Together we are positioned more strongly for success. Often supporting fundraising and the needs of the organization is the main job of marketing — other times there are other significant objectives around advocacy and awareness — regardless — there is strength in togetherness. But it has to be from the beginning; fundraising cannot be an afterthought. Fundraising has to be part of the conversation from the get-go, so that all departments — marketing, fundraising, and beyond — can bring their unique lens to the task at hand: inspiring more awareness of — and motivating people to give to — your cause. Case study Are there examples of integration

of marketing and fundraising done right? Absolutely — but not as often as we would like! To illustrate, the Heart & Stroke Foundation of Canada was faced with two issues: 1. Their brand had never been fully integrated and they had over 4 sub-brands that made their brand — and thereby their reason for being — incredibly unclear. 2. As a result of the above, combined with other factors, Canadians didn’t fully realize the urgency of the cause and the tangible impact Heart & Stroke makes on healthcare. They decided to address these big issues with a big undertaking, namely a full re-brand. But Heart & Stroke didn’t do it in a silo. They didn’t have marketing and fundraising operating like oil and water. Instead, they worked together and were laser-focused on one thing: Inspiring Canadians to join Heart & Stroke by reappraising the brand and donating to the cause. In that focus, marketing and fundraising are integrated, they’re




afterthought). Tested fundraising propositions in focus groups to see what would resonate. Built journey maps that outlined the constituent experience, and clearly outlined where marketing and fundraising fit in along the way. Brought the new brand to life through a monthly donor acquisition campaign; awareness of the cause wasn’t enough for real change, people needed to be able to take action.

Marketing and fundraising. Fundraising and marketing. They worked together. And it did work. The re-brand was followed by a monthly acquisition campaign which was, again, a joint venture for marketing and fundraising. This campaign acquired 500% more monthly donors than they did during the same time period the year previous. They also garnered millions of media impressions and social interactions, thereby achieving

Are there examples of integration of marketing and fundraising done right? Absolutely — but not as often as we would like! on the same level. As the Heart & Stroke Foundation on their re-brand journey, here are some of the things they did to address the two issues named above: ❯❯ Determined their reason for being: Protecting life’s core (as in, the heart and brain). ❯❯ Determined their external-facing purpose: Life. We don’t want you to miss it. (Read: the “big idea). ❯❯ Created a bridge from their “why” to their “how”: Saving moments. Funding breakthroughs. Saving lives. (A.k.a. how they protect life’s core, how they ensure you don’t miss out on life, and what your money goes to). ❯❯ Asked their existing donors what matters to them to ensure the donor is at the forefront of the re-brand (and not an

their focus of Canadians reappraising the brand and donating to the cause. That is what integration — done right — can do. A lesson in mixology Integration isn’t easy. But it makes things easier for donors. It makes them more a part of your story. It makes them more aware of what you do. It makes them more aware of their part in it. It makes them more inspired. And it makes them more motivated to give. So we encourage you to do the harder thing — take a course in mixology and integrate! Stop being oil & water. Be a gin & tonic. Maeve Strathy is Fundraising Strategist at

Blakely, Inc. ❰

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CMA: How charities can leverage their advantages and methods By Brendan Read


anadian Not-for-Profits (NFPs) are facing growing demands for their services. These organizations are always looking for more support, but with an increasingly informed donorbase, NFPs need to utilize all of the resources at their disposal and change the way they appeal to Canadians to achieve their goals. Engaging effectively through corporate entities Jason Egbuna, Manager, Direct Marketing - Leadership Giving at Princess Margaret Cancer Foundation, spoke with some industry leaders to discover how corporate entities are able to successfully navigate the NFP world. One case in point is Ronald McDonald House Charities of Canada (RMHCC) – a 13-chapter organization that provides a home away from home for the families of seriously ill children who are staying at a nearby hospital. According to Cathy Loblaw, RMHCC’s President and CEO, Ronald McDonald House has doubled the number of bedrooms it has for families over the past five years. As Loblaw told Egbuna, despite that rapid growth, RMHCC still had to turn away 3,000 families ❱

in 2016. With 70% of Canadians living outside of an area with a children’s hospital, there is a need for their services in communities across Canada; therefore, communicating its urgency is a challenge they face on a daily basis. Canadian Tire Jumpstart Charities is dedicated to removing financial barriers so kids across Canada have the opportunity to get off the sidelines and “get into the game”. Jumpstart helps more than 200,000 kids a year engage in sports. While Jumpstart is a national charity,100% of funds raised remain in their designated neighbourhoods, helping to meet needs in every community. Still, as Jumpstart’s president Landon French explained to Egbuna, it’s tough to keep up with the level of demand in various communities. So what can NFPs do to help meet these needs effectively? Loblaw says they need to leverage strong leadership, sustainable fundraising processes and strong partnerships with donors. Linking with large corporate foundations helps charities. French says that one of the benefits of having a relationship with Canadian Tire is the extensive level of support from all banners across

the country. Loblaw said that being connected to McDonald’s Restaurants of Canada provides RMHCC with the ability to better cope with growth or economic upheaval. The company accounts for 92% of RMHCC revenues. Egbuna asked if this means that we are going to see a steady increase in corporate charities and if the public will gravitate towards organizations where donor funds do not have to help with overhead costs. Loblaw says that everything in the philanthropic world is getting more sophisticated, including donors who will go where they feel their donations are able to make the most impact. She believes that donors want to view organizations as “social impact partners,” not just as places to agree with organizations where their donations go to disappear. French echoed this sentiment, but also connected it to employees feeling engaged with the organization and believing that their work is making a difference. This strong sense of accomplishment has allowed Jumpstart to boast of high employee retention, stating that 92% of their workforce is happy to be a part of the organization.

But while operating costs and targeting funds raised can be more aptly controlled in corporate foundations, there are some challenges. It’s the age-old question that NFP professionals face on a daily basis: how much effective work can you do in the community with the funding that is available? After you have identified the need, started to have an impact in the community, and knowledge of your services grows, how far can you stretch funding before it has an impact on the quality of services you provide? Mapping the donor journey by segmentation In order to generate additional funding, NFPs—including those connected with corporate foundations — need to consider all of the options at their disposal, says Rupen Seoni, Senior Vice President and Practice Leader at Environics Analytics (EA). Mapping the customer journey, or more appropriately, the donor journey, is an approach that is helping NFPs find efficiencies. Understanding the donor journey is a valuable tool because it helps organizations understand how prospects move from thinking February 2018

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Fundraising about making a donation to becoming donor (or volunteer, or advocate as appropriate). Armed with this information, NFPs can use their resources wisely by designing an engagement strategy that works, explains Seoni. Inherent to customer journey mapping is some form of segmentation. That is because usually more than one journey or path is required to be effective with diverse prospects that most NFPs are working with. Here are the key segmentation types: Behavioural Segmentation It has been long understood that annual giving donors have different behaviours, capacity, motivations and donor journeys than those who give in other ways. For Behavioural Segmentation, EA uses NFPs’ own data to create useful segments. Historically, this has simply been by donor type. But with more data available, and the use of more sophisticated techniques, NFPs can look at frequency of donation, participation in events and volunteering to measure engagement to create a more complete picture of donors. On the other hand, Behavioural Segmentation provides only an internal view of donor behaviours. And it is unclear whether the behaviours are constructs of how the NFP has engaged in the marketplace or the result of an underlying preference in the market. It also is difficult to use for donor acquisition because there is usually no data upon which to segment a prospect. Nor does it provide the motivations behind the behaviours that underlie the segments. Attitudinal or Psychographic Segmentation Attitudinal Segmentation uses a survey of donors or prospects to understand the motivations and behaviours around awareness, consideration, engagement and donation. It can help NFPs understand which “hot buttons” to press (and avoid) in their positioning and communications to improve their chances of being noticed by prospects. It also helps align organizations’ outreach efforts around those key motivators. ❱

Seek out colleagues in other organizations who have adopted integrated segmentation to learn how they structured their segmentation “infrastructure” to meet their needs.

But it is difficult to systematically tie motivations to individual donors/prospects to action more personalized messaging around the donor journey. Also, describing the segments beyond their attitudes is difficult because when segments are optimized purely on attitudes as the behavioural and demographic dimensions are often “mushy,” notes Seoni. It also does not lead to a clear picture of who the target is. Demographic Segmentation Demographic Segmentation is very straightforward, easy to understand, and it describes donors and prospects, explains Seoni. It uses surveys and/or neighbourhood demographic estimates. Demographics can help to bridge across segmentation techniques and disparate data sources But there are literally hundreds of demographic variables, so understanding which ones are relevant for an NFP’s cause is important to create segments using relevant demographic markers. Behaviours and attitudes which can be key drivers in tailoring the donor journey are missing. Moreover, everyone within a demographic segment may not behave the same or have the same beliefs.

Hybrid approaches No single approach to segmentation is a panacea, says Seoni. Hybrid approaches can solve different business challenges and use some analytical techniques to bridge across these approaches to create a more holistic, functional view of the donor/prospect. The hybrid approach integrates different dimensions of segmentation and data into a unified view of target segment. It allows NFPs to be more donor/ constituent-centric. Behavioural Segments could be a good starting point in the stewardship of existing donors. Attitudinal Segments could provide better information on the motivators of these donors and be used to make the case more effectively in acquisition efforts. Adding demographic “hooks” in the data that drives the different segmentation approaches allows them to be connected and used more flexibly because demographics tend to be widely available. EA’s Hybrid models are customizable, created for a specific NFP and can do a better job of explicitly including behavioural data. Neighbourhood segments are not created specifically for an NFP, but have a lot of detail and are usually much less expensive to use. But additional data, expertise

and costs are required to operationalize the hybrid approach. It also must be must be considered in the planning stages of segmentation work and not be an afterthought. Parting thoughts Select an approach or combination that suits immediate needs and can be scaled over the longer term and can link up to other needs. ❯❯ Think specifically and tactically about how to take action against the segments. The expectations and approach regarding actionability should be clear before undertaking any segmentation project. ❯❯ Seek out colleagues in other organizations who have adopted integrated segmentation to learn how they structured their segmentation “infrastructure” to meet their needs. ❯❯ Get good advice from vendors which provide segmentation expertise and services since their perspective across different organizations can be helpful. ❯❯

The Canadian Marketing Association’s NotFor-Profit Council serves the unique interests of Canadian NFP marketers and fundraisers through education, advocacy, and engagement with other marketing professionals. Learn more at February 2018

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The future of fundraising is digital Digital marketing for nonprofits requires message, audience and context focus BY KIM ARSENAULT


here is one crucial factor that determines your donor retention rates and engagement when trying to scale success as a non-profit and that is communication. If we look to the future of fundraising, there are many changes happening across the landscape. Between the rise of machine learning and artificial intelligence (AI), budding usage of social media as major information sources, and the ever-changing needs among constituents, digital marketing isn’t just a for-profit tool. Instead it is for every organization that wants to grow and expand their donor reach, improve revenue and donor retention. When it comes to digital marketing with for-profits, budget is usually the first thing that comes to mind, but it is the last thing some non-profits have available, which presents a challenge for digital marketers in the non-profit field. Here are a few points to consider when looking to improve donor retention and engagement through digital marketing for your non-profit: Know your constituents’ needs Making meaningful connections to potential donors and their networks is the key to maximizing donations, engagement and donor retention. According to the Association of Fundraising Professionals, studies show that donor retention has been consistently dropping: -1.9% Year to Date (YTD) change industry-wide, as well as the revenue from major donors change by -8% YTD. With that information, the question for your non-profit becomes: are your services and value communicated with the right message, in the right context, at the right time? Or are you just messaging without an individual donor-focused strategy driven by data? Retention has a disproportionately positive impact on your bottom line. February 2018

Building a robust CRM database is one of the first steps you can take to improve your donor acquisition and retention. Being able to communicate personalized messaging for different segments of your audience happens best with the right lists and tagging functionality within a CRM system. A connected CRM platform empowers you to understand current and past donor behaviour in order to develop the messaging that speaks to your donors’ specific needs at the right time, in the right channel. This is the key to improving your retention rates through targeted messaging. Let’s look at an example: Say your non-profit has a retention rate of 41% and you have 5,000 individual donors who each contribute $200. After 10 years at that retention rate, you would have collected $820,000 (not including new donor acquisition). If your retention rate was 51%, that same donor pool would have netted you $1.2 million after 10 years (an increase in almost $460,000 by increasing your retention rate by 10%). The future of fundraising: Millennials Although Millennials may lack the financial resources to donate in larger amounts like their older counterparts, it doesn’t mean they don’t want to give more. In fact, 52% of Millennials have the desire to give more, according to The 2017 Burk Donor Survey Report, published by Cygnus Applied Research. Clear pathways on how to take donor action on your website and social channels is crucial to scaling your non-profit success, as well as providing clear data on how donations are providing impact. Here are a few facts from a report on Millennials’ giving, published by the Eleventy Marketing Group, that reinforce why: ❯❯ 80% of Millennials use their phones as major devices for reading non-profit emails and articles; 80% prefer viewing mobile optimized non-profit sites.



46% of Millennials prefer monetary donation to a nonprofit opposed to physical gifts. Millennials often begin relationships with non-profits on their websites and then move on to their social media pages for updates.

Additionally, this report illustrates that Millennials support causes, not necessarily organizations. This makes the power of storytelling through digital content is essential for engaging future donors, as well as having unified messaging across all content channels to engage Millennials in those key micromoments. Micro-moments, macro-impact Most donors, Millennials especially, switch between mobile and desktop devices when viewing different content from non-profits. While most Millennials use their phones for reading non-profit emails and social information, they might switch to a desktop for a full site experience to take action and donate. This behaviour stresses the importance of micro-moments, which are the intent-rich moments when people turn to different devices to act on their decisions. In the context of a donor-centric mindset, it’s crucial to ensure that all of your content, from expanded text ads to web graphics to form fields, are mobile-optimized. That way, all of your channels are optimized to deliver the right messaging in the right context; providing better experiences with your content on mobile to better reach and connect with potential donors. The importance of machine learning and AI Achieving personalization at scale is the future of fundraising. But to do it you will need to leverage the power of machine learning and AI. By 2025, it’s estimated that AI bots will power 95% of all customer service interactions, according to Servion Global Solutions; if you

implement them sooner than later, you’ll be ahead of the curve. Rather than going off gut assumptions about donor behaviour, digital marketers make data-driven decisions that reflect how donors are actually engaging with your organization. Machine learning helps to accelerate the data collection process for donor engagement and provide faster, more targeted communication across your content channels to better engage donors. Take Yeshi for example, a chatbot launched by Lokai and charity: water to bring awareness to the water crisis in Ethiopia. Yeshi is a bot you can interact with via Facebook Messenger to have a conversation to simulate what it’s like to walk twoand-a-half hours to find clean water. This is not only an example of how to leverage machine learning and AI for effective storytelling with a hyper-connected generation, but how non-profits can bring the future of messaging to the present and significantly improve donor engagement. Where do you start? Having worked with hundreds of marketers over the last 15+ years, the most important first step is to truly assess and understand the current state of your marketing ecosystem, i.e. find your “Here” in order to build a realistic roadmap to get you “There” (your goals). Then you can prioritize marketing initiatives based on a 3-point ICE scale: Impact / Cost / Effort. At Inbox Marketer, we walk our clients through a proprietary Scorecard framework to assess their “Here”, which covers 100+ points that help identify gaps and opportunities to build incremental efficiencies in their marketing programs. This framework forms the basis for how we’re helping non-profits amplify their donor retention and success through data-driven digital marketing. Kim Arsenault is Sr. Director of Client Services, Inbox Marketer. ❰

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Put CX leaders in the business driver’s seat BY PAUL HAGEN AND DIANE MAGERS

T Paul Hagen is senior principal in West Monroe’s customer experience practice.

Diane Magers is CEO of the Customer

Experience Professionals Association (CXPA).

oday’s enterprises have two choices: Evolve their customer experience (CX) or get left behind. To grasp the depth of the problem, look no further than the retail sector. Last year, roughly 7,000 brick-and-mortar stores closed up shop, according to a report by FGRT, cited by CNBC. And it wasn’t only small businesses taking the hit. Recognizable names like Toys R Us and RadioShack were among the thousands of closures. The problem extends well beyond retail. In an age of broad digital disruption, the adaptive imperatives apply to every industry’s customer experience. Just as digital behemoths like Amazon are successfully outpacing traditional retailers – the company’s stock rose by over 50% last year – emerging digital enterprises in healthcare, banking, law, education and manufacturing are setting new customer experience bars in those verticals. With digitization reshaping customer behaviors and expectations, the onus is on traditional enterprises to adopt a more agile approach to the customer experience–one that continually adapts to the evolving consumer. When it comes to driving enterprise adaptability, most professionals see it as a strategic imperative. The problem is that nobody’s leading the charge. As a recent survey we completed at West Monroe Partners customer experience leaders and practitioners revealed the notable majority of companies – 61% – place adaptability toward the top of their strategic priorities list. But when it comes to who owns adaptability efforts, there’s not a clear answer. Instead, responsibility is all over the map, from the CEO (according to 28 % of those surveyed) to marketing (23%) to IT (20%) to no one at all (also 23%). This lack of a centralized approach to improving adaptability means that for most organizations, it’s more of a talking point than an action item. Our survey found that a mere 17% of respondents say their company’s agility efforts are deployed companywide with measurable results. Instead, the single largest percentage of respondents – 48% – says their business agility strategy is still firmly planted in the preliminary phase. For these enterprises and many others, the challenge is how to turn an ad hoc and experimental approach into a concrete strategy that’s embedded in business culture. That’s where customer experience leaders can take charge.

Why CX decision-makers should lead the agile push When it comes to owning the agile push, customer ❱

experience professionals are uniquely suited to fill the role. First, they’re already close to customers, channeling much of their time and focus toward understanding what things look like from the patron’s vantage point. Second, they’re accustomed to working in a mode of rapid experimentation or “fail fast,” which is a central tenet of the Agile methodology (the ability of a business to change quickly due to internal or external threats). Finally, the cross-departmental nature of customer experience leaders’ responsibilities means they’re already primed for the interconnected work that’s central to boosting agility. With customer experience leaders empowered to lead the agile push, they can focus on building out capabilities that accelerate agility. These capabilities include: ❯❯ Developing high-performance technology architecture. Enterprises cannot successfully deploy agile without an adaptable technology infrastructure. That means doing away with inflexible monolithic systems in favor of performance-focused architectures. To effectively build out this capability, customer experience leaders should link up with IT to strategize architecture focused on communication and adaptability. ❯❯ Creating a culture of employee engagement. Adaptability is a collective mindset, and all employees should be on board. With many companies, that will mean phasing out traditional hierarchies in factor of an open and iterative culture. To achieve this, leaders should be prepared to continuously communicate this cultural change across all levels and departments of an organization. ❯❯ Following the “North Star”. What do you want to achieve with a shift to agile and why? These are the two questions customer experience leaders should ask as they prepare to adapt. The answer should be summarized in a “North Star,” the guiding framework for a company’s journey to greater agility. As leaders design this North Star, they should focus on articulating a common purpose with concrete, measurable outcomes. For enterprises across industries, the customer experience challenge is an existential one. Those who don’t face it with strategic steps risk extinction. The key to a successful strategy begins by empowering decision makers as agility leaders. With customer experience professionals at the helm, companies can create an adaptable framework to meet the needs of their customers and keep pace in the digital age. February 2018

Direct Marketing Magazine February 2018  
Direct Marketing Magazine February 2018