Market Trends in Membership

International Museum Membership Conference

November 9, 2015 | London

Mae Daniller President mdaniller@daniller.com

Overview of Session

•  The world has changed forever •  Important business and societal trends •  Giving is up, especially for arts and culture •  Hot topics are video, big data, and ethics/regulation •  What are the charitable habits of different generational

groups?

•  What does this new world mean for membership in 2016?

How has the world changed forever?

•  The world population has more than doubled in the past 50 years

•  The percent of people over 65 is 14% in the US and 19% in the EU…higher than ever and growing

•  There are more people migrating than ever before – 232MM per year, up from 175MM in 2000

•  More than half the global population is urban

•  2.6B smart phone users worldwide

—United Nations, World Bank

Business and Societal Trends

•  Internet of Things Products

•  Mobile payment

•  More natural tech interface

•  Virtual/augmented reality

•  Sharing economy

•  Big data

•  Big data hacks

•  Streaming and user-generated video

•  Premium paid content

•  Millenials becoming homeowners and parents!

—Trendwatching.com, CMO.com , TechRadar.com, Entrepreneur.com

U.S. Giving Trends in 2014

•  Total giving rose 5.4%

•  Individual giving (72% of giving) rose 4%

•  Giving was up across all sectors except International Affairs

•  Arts, Culture, and Humanities grew more than any other sector – at 7.4%, now back to pre-2008 recession dollars

—Giving USA 2015 Report. All figures are adjusted for inflation.

U.S. Direct Marketing Giving Trends

•  Since 2010, donor counts down 10.8%, and new donor counts down 20.6%! But revenue is flat.

First half 2015 vs 2014: •  New donors up 1%

•  Retention down 0.8%

•  Revenue per donor up 4% –  May reflect higher mix of long-term donors

•  Revenue up 3% –  Finally back at pre-recession levels, but not

when adjusted for inflation

—Target Analytics, donorCentrics Index of Direct Marketing Fundraising, 2015 Second Quarter Report, Sept. 2015 All figures are not adjusted for inflation.

U.S. Direct Marketing Giving Trends

—Target Analytics, donorCentrics Index of Direct Marketing Fundraising, 2015 Second Quarter Report, Sept. 2015

•  Arts and culture sector donor counts up 9% since 2010

Arts and culture first half 2015 vs 2014: •  Flat donor counts and revenue, as retention down 4% •  New donors up 28%

2010-2015

Hot Topic: Video Everything •  Facts:

–  YouTube, Facebook, and Snapchat EACH have 4B+ videos views per day

–  YouTube viewers grew 40% YOY in March 2015 –  Facebook grew 4X YOY in June 2015 –  More than half of views come from mobile –  Video can increase landing page conversions by 80%

•  Potential Membership Uses: –  Emails/webpages for renewal, upgrade, acquisition, annual fund –  Promote membership on homepage, general member page –  Member thank-you/cultivation emails –  Drive awareness, clicks on YouTube/social media

•  Challenges: –  Budget, staff training, tracking ROI

—Youtube.com, Fortune.com, BusinessInsider.com, See3 “Into Focus” Report

Hot Topic: Video Everything

Membership plug

https://www.youtube.com/watch?v=ZCgbBFibAVQ

•  What’s being captured –  Demographics –  Membership gift data –  Visitation –  Contacts –  Purchases –  Online engagement –  Interests –  Data overlays from external sources

•  What it’s good for: –  Predictive analytics – likelihood to join, renew, give –  Segmentation – which groups of people behave most alike? –  Based on the above, make custom offers and messaging

•  Risks: Security, data overload and analysis paralysis, metrics that aren’t as useful as you thought (wealth screening)

Hot Topic: Big Data

—Blackbaud npExperts “The Future of Fundraising”

Big Data

Example: You want to predict likelihood to renew, using a predictive analytics study

1.  With vendor, determine potential factors correlated with renewals –  Ex. longevity, join channel, join offer, # of visits, member level, etc.

2.  Vendor develops model based on historical data, determines which factors actually correlated with renewals in the past

–  Ex. Members who joined with 10% off offer = 20% less likely to renew

3.  Vendor then uses model to calculate likelihood to renew in the coming year for all current members (yielding score or segments)

4.  You decide how to use this information… –  Ex. No special offer to most likely to renew, 10% off to least likely to renew

Hot Topic: Big Data

Hot Topic: Ethics & Regulation •  U.K.

–  Recent news surrounding aggressive practices and the suicide of a donor

–  Proposing “Fundraising Preference Service” to allow donors to opt out of all fundraising requests/ another way is to say you have to have a donor “opt in” before you can solicit funds

•  U.S. –  33% have “not too much” or “no confidence” in non-profits

(June 2015 Gallup Poll) –  Appropriate suit filed against four linked cancer charities

accused of abusive fundraising, excessive compensation

•  California –  Recently defeated an effort to require disclosure of fundraising

counsel cost on all fundraising efforts –  Proposing non-profits disclose list of top donors to state

—TheAgitator.net

U.S. Charitable Habits of Different Generations

—Blackbaud, The Next Generation of American Giving, Aug 2013

•  Matures and Boomers give 69% of dollars raised

•  Gen X and Y give 31% of dollars

•  What inspired their gift or “unattributable donations” is an ongoing issue for non-profits

•  Sustainer giving liked best by Boomers (convenience cited)

•  Total annual charitable contributions grow with age—with number of charities

U.S. Charitable Habits of Different Generations

•  All generations are now multi-channel but have different “ideal mix” for engagement (not transactions!)

•  Preferred information source for their top charity

–  Matures – Events, emails, mail

–  Boomers – Website, email, mail –  Gen X, Y – Website, emails, events

—Blackbaud, The Next Generation of American Giving, Aug 2013

•  Channels donors give through*

–  More Gen X and Y give online than through mail –  Baby Boomers now give equally online and by mail

•  Optimizing and customizing your online join/renew process matters! –  Org X used an un-optimized, generic membership transaction

process à16% of acquisition campaign $ received online –  Client Y created a custom, optimized transaction page à 26%

of acquisition campaign $ received online *other than giving at the grocery store checkout and cause-related products

U.S. Charitable Habits of Different Generations

—Blackbaud, The Next Generation of American Giving, Aug 2013

U.S. Mobile Phone Use

—MobileCause, Complete Mobile Strategy for Fundraisers, 2015; npEngage.com

•  12% of membership purchases on smartphone or tablet –  17% if site is mobile responsive

•  49% of fundraising emails are read on mobile

•  79% of social media traffic is on mobile

•  70% of donors report that texts are a good way for nonprofits to get their attention

U.S. Social Media Use by Generation

—LaPlaca Cohen & Campbell Rinker, Culture Track 2014

What does our new world mean for membership in 2016?

•  One size does not fit all in your program. Use multiple, integrated channels and tactics (think video).

•  Members expect more customized solicitation and communication.

•  Membership relationship remains paramount. Use predictive analytics thoughtfully, understand your members’ connection to your organization, and what they need from a membership program.

•  Boomers will still be your key fundraising audience for many years.

What does our new world mean for membership in 2016?

•  Mobile viewing and mobile giving are the new normal.

•  Mail + email + user-friendly landing page for transacting are the new basics.

•  Be strategic in putting together your mix of old and new technologies in this age of information overload.

It’s not what you don’t know that can get you in trouble . . .

Thank you!

International Museum Membership Conference

November 9, 2015 | London

Mae Daniller President mdaniller@daniller.com