Every year my company, Pareto, coordinates a data comparison project on behalf of a few dozen charities. Last year 41 charities compared their data and found that around a third of their income from individuals now came from regular giving (automatic debits from their bank accounts or credit cards)... RG is the light blue on the chart below...
...and of that 30% or so of their income F2F has been the biggest driver...(F2F is the orange-ish bit).
Clearly it is not saturated yet across the market. However, some charities have done so well that the number they acquire each year is about the same as the number they lose to attrition so they have no net increase. For them, they need to look at alternatives if they want to continue to grow.
The latest benchmarking round of comparative data is due April/May this year and seeing if F2Fs rate of growth grew again in 2010-2011 will be fascinating. I will let you know.
Sean
* By face to face I mean the process of stopping people in the streets, shopping malls, door to door and at events and asking them to sign up for an ongoing debit from the credit card or bank account. It is huge in Europe, having taken off big time in the mid 90s in the UK and accounts for the majority of new donors acquired in emerging fundraising markets like Hong Kong, Jakarta and Kuala Lumpur. Canada is into it too, but the US is a late entrant, with proportionally less F2F activity. Almost certainly the biggest growth potential in the world is in the USA. If you are US fundraiser and don't know about it - find out more!
1 comment:
Someone asked me how do we know F2F is not at saturation point.
Another lens to view the saturation debate is the life-cycle model.
http://www.valuebasedmanagement.net/images/picture_product_life_cycle.gif
For me ‘saturation’ is ‘maturity’ in the model and F2F as a channel and product for the whole sector is reaching maturity – at the top or just entering the stage I don't know.
At maturity, the heady days of higher margins are gone, but the wise can still make money.
Direct mail is a mature channel and product, and its demise has been forecast for years, yet is to materialise – it may wax and wane, but will be here for a while longer.
The trick with mature industries and products is to avoid the downward decline (what most people think of with saturation) and that is where innovation comes in. Innovate to extent the life-cycle curve higher for existing products, or as Sean mentions, diversifying into alternatives.
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