CoolData blog

15 April 2013

What do we do about Phonathon?

Filed under: Alumni, Annual Giving, Phonathon — Tags: , , , — kevinmacdonell @ 5:41 am

I love Phonathon. I love what it does, and I love the data it produces. But sad to say, Phonathon may be the sick old man of fundraising. In fact some have taken its pulse and declared it dead.

A few weeks ago, a Director of Annual Giving named Audra Vaz posted this question to a listserv: “I’m writing to see if any institutions out there have transitioned away from their Phonathon program. If so, how did it affect your Annual Giving program?”

A number of people immediately came to the defence of Phonathon with assurances of the long-term value of calling programs. The responses went something like this: Get rid of Phonathon?? It’s a great point of connection between an institution and its alumni, particularly its younger alumni. It’s the best tool for donor acquisition. It’s a great way to update contact and employment information. Don’t do it!

Audra wasn’t satisfied. “As currently run, it’s expensive and ineffective,” she wrote of her program at Florida Atlantic University in Boca Raton. “It takes up 30% of my budget, brings in less than 2% of Annual Fund donations and only has a 20% ROI. I could use that money for building societies, personal solicitations, and direct mail which is much more effective for us. In a difficult budget year, I cannot be nostalgic and continue to justify the bleed for a program that most institutions do yet hardly any makes money off of. Seems like a bad business model to me.”

I can’t disagree with Audra. Anyone following fundraising listservs knows that, in general, contact rates and productivity are declining year after year. And out of the contacts it does manage to make, Phonathon generates scads of pledges that are never fulfilled, entailing the additional cost of reminder mailings and write-offs. There are those who say that Phonathon should be viewed as an investment and not an expense. I have been inclined to that view myself. The problem is that yes, it IS an expense, and not a small one. If Phonathons create value in all the other ways that the defenders say they do, then where are the numbers to prove it? Where’s the ROI? Audra had numbers; the defenders did not. At strategic planning time, numbers talk louder than opinions.

When I contacted Audra recently to get permission to use her name, she told me she has opted to keep her Phonathon program for now, but will market its services to other university divisions to turn it into a revenue generator (athletics and arts ticket sales, admissions welcome calls, invitations to events, and alumni membership renewals). That sounds like a good idea. I can think of a number of additional ways to keep Phonathon alive and relevant, but since this is a data-related blog I will focus on just two.

1. Stop calling everybody!

At many institutions, Phonathon is used as a mass-contact tool for indiscriminately soliciting anyone the Annual Fund believes might have a pulse. This approach is becoming less and less sustainable. The same question is asked repeatedly on the listservs: “How many times, on average, do you attempt to call alumni non-donors before you retire their call sheet?” And then people give their one-size-fits-all answers: five times, seven times, whatever times per record. Given how graduating classes have increased in size for most institutions, I am not surprised to read that some programs are stretched too thin to call very deeply. As one person wrote recently: “Because of time and resources constraints, we’re lucky to get two attempts in with nondonor/long lapsed alumni.”

I just don’t get it.

We know that people who have attended events are more likely to pick up the phone. We know that alumni who have shared their job title with us are more likely to pick up the phone. We know that alumni who have given us their email address are more likely to pick up the phone. So why in 2013 are schools still expending the same amount of energy on each of their prospective donors as if they were all exactly alike? They are NOT all alike, and these schools are wasting time and money.

If you’ve got automated calling software, you should be adding up the number of times you’ve successfully reached individual alumni over the years (regardless of the call result), and use that data to build predictive models for likelihood to answer the phone. If you don’t have that historical data, you should at least consider an engagement-based scoring system to focus your efforts on alumni who have demonstrated some of the usual signs of affinity: coming to events, sharing contact and employment information, having other family members who are alumni, volunteering, responding to surveys and so on.

A phone contact propensity score (and related models such as donor acquisition likelihood) will allow you to make cuts to your program when and if the time comes. You can feel more confident that you’re trimming the bottom, cutting away the least productive slice of your program.

2. Think outside Phonathon!

Your phone program is a data generation machine, granting you a wide window view on the behaviours of your alumni and donors. I’m not talking just about address updates, as valuable as those are. You know how many times they’ve picked up the phone when they see your ID come up on the display, and you might also know how long they’ve spent on the phone with your student callers. This is not trivial information nor is it of interest only to Phonathon managers.

Relate this behavioural data to other desired behaviours: Are your current big donors characterized by picking up more often? Do your Planned Giving expectancies tend to have longer conversations on average? What about volunteering, mentoring, and other activities? Phone contact history is real, affinity-related data, delivered fresh to you daily, lifting the curtain on who likes you.

(When I say real data, I mean REAL. This is a record of what individuals have actually DONE, not what they’ve stated as a preference in a survey. This data doesn’t lie.)

A few closing thoughts. …

I said earlier that Phonathon has been used (or misused) as a mass-contact tool. Software and automation enables a hired team of students to make a staggering number of phone calls in a very short time. The bulk of long-lapsed and never-donors are approached by phone rather than mail: The cost of a single call attempt seems negligible, so Phonathon managers spread their acquisition efforts as thinly as possible, trying to turn over every last stone.

There’s something to be said about having adequate volume in order to generate new donors, but here’s the problem: The phone is no longer a mass-contact medium. In fact it’s well on its way to becoming a niche medium, handled by a whole new type of device. Some people answer the phone and respond positively to being approached that way, and for that reason phone will be important for as long as there are phones. But the masses are no longer answering.

These days some fundraisers think of email as their new mass-contact medium of choice. Again they must be thinking in terms of cost, since it hardly matters whether you’re sending 1,000 emails or 100,000 emails. And again they’re mistaken in thinking that email is practically free — they’re just not counting the full cost to the institution of the practice of spamming people.

The truth is, there is no reliable mass-contact medium anymore. If email (or phone, or social media) is a great fundraising channel, it’s not because it’s a seemingly cheap way to reach out to thousands of people. It’s a great fundraising channel when, and only when, it reaches out to the right people at the right time.

  1. Alumni and donors are not all the same. They are not defined by their age, address or other demographic groupings. They are individual human beings.
  2. They have preferred channels for communicating and giving.
  3. These preferences are revealed only through observation of past behaviours. Not through self-reporting, not through classification by age or donor status, not by any other indirect means.
  4. We cannot know the real preferences of everyone in our database. Therefore, we model on observed past behaviours to make intelligent guesses about the preferences we don’t already know.
  5. Our models are an improvement on current practice, but they are imperfect. All models are wrong; we will make them better. And we will keep Phonathon healthy and productive.
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