Friday, July 1, 2011

Just Text Me!

This photo, called Text Girl, is from uberculture's Photostream on Flickr.
  • Are nonprofits investing in mobile technology?
  • What is mobile good for – fundraising or engagement or both?
  • What are the opportunities and challenges with this new medium? 
  • Should you invest in SMS/text, the Mobile Web or both?
A new study called, New Directions: Survey Findings on Non-Profit Adoption of Mobile Media and Mobile Giving by Ron Vassallo, CEO of Kaptivate seeks to answer these questions and more.  The study was conducted in collaboration with AFP (Association of Fundraising Professionals).

As always, you should read the study yourself, but here are the highlights.
  • Mobile’s adoption continues to grow.
  • Nonprofits are shifting away from SMS/text and are moving toward the Mobile Web.  More on that below.
  • The motivation for developing mobile capacity is now increasingly focused on audience engagement vs. donations.
I was so interested in this study and frankly know so little about mobile marketing for nonprofits that I decided to go straight to the source.  See my interview with Ron Vassallo, author of the study and CEO of Kaptivate, a firm that does research and helps nonprofits develop mobile strategy, below.

Me: Ron, let's start from the beginning.  What's the difference between SMS/text and the Mobile Web?

Ron: SMS is true to its label.  It stands for Short Message Service and allows friends, family, colleagues - anyone - to send text messages between mobile phones.  SMS is everywhere! There are estimates that SMS has 90% market penetration.  It's a super easy and fast way to communicate. 

The Mobile Web is simply a website on your phone.  It allows you to use a browser to look at a particular website that’s been formatted for your smart phone or web-enabled feature-phone.  We estimate that 65% of the market is web-enabled.

While SMS is ubiquitous, there are some problems with it because the business requirements for use of SMS/text for fundraising were defined by the mobile carriers not nonprofits.  Specifically, there are a lot of constraints with text-based fundraising.
  • First, the phone carriers only allow you to solicit $5 - $10 gifts via text.  This is because they don’t want their subscribers to get a bill for $200 and get "sticker shock" and think it's from the carrier vs. a donation.  
  • Second, there is no recurring gift option with text.  
  • Third, to participate in mobile giving via text you have to meet a revenue requirement.  According to the Mobile Giving Foundation, your nonprofit has to have gross revenues of $500K or more. 
  • Finally, and this is probably the biggest issue for nonprofits, if you do text based fundraising, you will receive very limited donor data from the phone carriers. This severely limits your ability to follow up with and cultivate your mobile donors.
The Mobile Web, on the other hand, is a MUCH more attractive option for nonprofits.
  • First, there is no third-party intermediary to contend with.  
  • Second, you can engage constituents on your own terms.  
  • Third, you can ask for any denomination of gift and you can provide your donors with recurring gift options.  
  • Fourth, users are familiar with the process for giving via the Mobile Web.  It's the same as giving online.
I think that in the future we will see a decline in text adoption for nonprofits and a rise in nonprofit adoption of the Mobile Web.

Me: What is the cost to invest in mobile?

Ron: To do SMS/text giving you'll need to invest $13,000 to $25,000.  There are also recurring fees of approximately 1/3 of the initial set up cost.  This covers licensing of short codes and key words, as well as the service fee for the number of messages to be sent.

Mobile websites will run you $5,000 to $30,000 depending on what you are trying to achieve.  There are recurring costs as well, such as maintenance and hosting.

The good news is that increased competition is making it more accessible to develop a mobile site.  I've seen multi-media packages, just for fundraising, that are coming down to $1,000 or less.

Me: Ron, According to New Directions, "over 50% of nonprofits are disappointed with their [mobile giving] fundraising results."  Why is mobile fundraising still such a challenge for most nonprofits?

Ron: I think there are two key reasons.
  • First, they don’t know how to market and promote the channel and awareness tends to lag as a result. American Cancer is beginning to crack the code on this.  They are integrating mobile into other channels and their overall brand strategy.  For example, they use social media to promote mobile engagement and then send a text that says, “Take this action on your phone to make your voice heard or meet us at the event today!" 
  • Second, user adoption is low because we’re still early in the technology adoption cycle. 
That said, mobile is revving up like no other technology before.  According to The Truth About Mobile Donations by Jenifer Snyder in Mobile Marketer
"In 1998 the first year after online donations first became a viable fundraising channel, $350,000 was raised via online donations. Compare that to this number: In 2009, the year after mobile donations were first introduced, more than $1.5 million in funds were raised via text-based giving.

In 1999, after people had been donating funds online for three years, $1.1 million was raised via the online giving channel.  In contrast, in 2010, the third year that donations could be made via mobile phones, a whopping $42 million was raised.

So three years after text-based giving first became available, the mobile donation fundraising channel has already raised more than 30 times as many dollars as the online channel did when it was in its infancy."
Me: In New Directions, you say that, "The motivation for developing mobile capacity is now increasingly focused on audience engagement vs. donations."  What exactly does that mean?  Engagement to what end?

Ron: I'll give you an example.  On June 24th, Stephanie Strom wrote a great article in the New York Times called, Charity Goes Mobile to Appeal to Young.  The nonprofit she profiled - Do Something - targeted lapsed teens with a text message.  Within 9 minutes they reconnected with 20% of the target audience.  That's an outstanding result!  

A lot of political campaigns and advocacy groups are also successfully using text to organize rallies and drive action, etc.  What they are doing is driving a rapid response.  That’s where engagement becomes so powerful.  Your phone is personal, always with you.    

Me: Tell me about it!  I practically SLEEP with my phone!

Ron: That’s what makes it such a powerful tool for engagement.  When you reach people via mobile, you can make your organization more relevant to their lives.

The Humane Society of the United States is another organization that is finally figuring out mobile.  They are providing constituents with tips on pet care.  They don't just go right after donations.  First, they are adding value by sharing good content and then they are asking for gifts. 

Me: As fundraisers, we would call that having a plain old, good cultivation strategy. 

Me: What tips would you give to groups looking to get started with mobile?  

  • First, don’t see mobile as a stand-alone channel.  It has to be integrated into your overall marketing mix.  Ask yourself, "How does mobile fit with our digital strategy?"  We are an increasingly mobile society and this is one way to ensure that your nonprofit/cause stays relevant.  
  • Two, determine if a "mobile play" is aligned with your overall marketing goals.  If not, it may not be a good time for you to invest.
  • Start with the mobile web.  Define a powerful user experience as opposed to a text based campaign and it will deliver the most audience reach for the buck.  With a Mobile Website you'll have a strong foundation for integrating social media and embedding SMS/text and you can still communicate short messages and alerts to your audience.
To learn more about how nonprofits are using mobile to achieve their fundraising, advocacy and programmatic goals, download New Directions: Survey Findings on Non-Profit Adoption of Mobile Media and Mobile Giving today!



Fred Emmer said...

Great Article. Agree with everything except the price comment on development of mobile web apps. We've got a standardized architecture that allows nonprofits to simply, quickly, and affordably put up a mobile fundraising portal. Check us out at from your desktop or laptop. Mobile devices will get our global app at that same address.

Sample client pages:

Love to show you "under the hood"

Fred Emmer

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