48. Some Personal News

An approach to Q3 that will pay dividends in Q4

Jul 16, 2023

Happy Sunday. To those I spoke to this week or spent time with in-person - thank you. A very warm welcome to all the new subscribers. I’m thrilled to have you as readers and truly appreciate your feedback and support.

In the aftermath of a challenging first half for most organizations, I wanted to focus today’s email on how to approach Q3 to ensure you’re set up for success in Q4.

As with every edition of SPN please reach out with any questions or comments. I respond to every single one.

Let’s dig in!

Get Your House in Order this Quarter

Regular readers of SPN may have spotted that I included TikTok’s recently published Holiday Media Kit in edition 46. ‘Tis already the Season to … experiment, learn, and plan.

There is no better time to test your hypotheses on the best medium, creative, or content asset than during these 12 weeks prior to Q4’s fundraising push.

Q4 is three months away, which for most of us is when our organizations drive the most revenue. So how do you maximize the time we have in Q3 to get into great shape for Q4, while raising as much money as possible in the meantime?

My answer: diversify but keep focus.

So, what to do?

Let’s break down an approach I used every Q3 at unicef in order to be best positioned to win in Q4:

Team Structure

Optimize for maximum efficiency. Smaller, more focused teams have often yielded better results in my experience as they can quickly adapt to changes, communicate more effectively, and foster a stronger sense of accountability.

Consider a review of your current team structure and identify areas where efficiencies can be improved. Lean doesn’t necessarily mean fewer people, but better utilization of the human resources you have.

Max. Cash Acquisition

The influx of people actively searching to contribute to missions they believe in is what makes Q4 so unique every year. Often 50%+ of people giving during Q4 are net-new Cash donors. Organizations most able to convert existing demand at the best rate possible will attract the most dollars.

Maximizing the Cash Acquisition performance part of the Donor Lifecycle is therefore crucial for a successful Q4 and it should be the target of experimentation in Q3.

You need to test whether the bottom end of your campaigns can be substantially improved - and whether new, untried tactics offer an opportunity to double-down.

Align Support Teams & Channels

Experimentation requires patience and a dedicated budget. Hold tight - below I show you how to find additional budget within what you already have.

It also requires an understanding, even a bullish embrace, that some experiments will fail by nature. And that’s ideal because you’re learning in Q3.

Beware - if you lean into heavy Acquisition testing this quarter your average performance will be down. BUT! This is where other considerations in the Donor Lifecycle come to the rescue.

Make sure your in-house team and external partners are aware of your Q3 focus on Acquisition-focused experiments. Both should be generating insights about existing donors to inform hypotheses and support the Acquisition team.

On the revenue side, you need to have other channels (and Partner Agencies depending on your set-up) give your experimentation air cover. How? Build and launch an email reactivation campaign to donors who lapsed more than 3 months ago, or A/B test removing that field on the donation form you’ve been wondering about.

Putting the hard yards in now will also help retain as many of the new Q3/4 donors as possible beyond January 1^st.

Create Flex in Your Budget

Aim to free up at least 25% of the budget this quarter. How? Take it from the lowest-performing tactics you’ve got kicking around in the market at the moment.

While scary, the math tends to work out – even if a third of it will not succeed at all, and the rest works 20% better than your current tactics, the overall short-term revenue “ding” will only be 5%. And that 5% can be covered by other steps in the Donor Lifecycle (see above).

Even if nothing performs better than what you’re already doing this is the right time to get confirmation that your campaign mix is well-optimized. Then you can go straight back to it in October, with no long-term negative impact and double down.

Where to Focus

Don’t split the testing budget too many ways. Diversify but keep focus. The goal is to push the limits of what seems to work best for your Org. (The links in the examples below are to other SPN editions where I’ve gone deep into the specific channels).

Is Face-to-Face fundraising still resonating? Invest in OOH/DOOH in 3-5 of your best cities.
Did your field team film some new, impactful videos? Cut those into YouTube Shorts and TikTok assets.
Are you seeing SEM generate the most substantial results? Increase spending to test the diminishing returns.
Do certain publisher websites stand out in Display reports? Form a direct partnership with spend commitment and negotiate some unique value-add.
Direct Mail? It’s “upper funnel” but highly targeted. Like B2B podcasting, if you give good reason to the listener, it can act like a lower funnel channel.

I was planning to list just 5 ideas but then my mind started racing. I added some more to spark your imagination at the end of this post.

Regardless of the actual dollar size of the 25% figure, pick max 3 initiatives (commit 20%) and then put the remaining 5% into a heavy-up in October for the tactic(s) that proved to work best.

Actionable Steps

There’s still enough time to set up for a successful Q4 and put the proper processes in place. It’s important that you stick to a quick, iterative approach. Here are some actionable steps for Q3 that I hope can help:

Dedicate somebody on your team to maximizing revenue from “existing donors”, aiming for a 5% revenue increase using the same budget.
1. The best way to achieve this is focusing on the effectiveness of the conversion funnel on your website. How? Start by A/B testing your retargeting creative and the Thank You emails you send to existing cash donors.
Cut the bottom 25% of your 1^st Time Cash Donor acquisition tactics before August. How? Download the last month of your performance data by campaign, sort it in Ascending order by ROAS, and pause the first 1/4th.
Take a hard look through the data – what is performing best? Creative types, medium types, specific audiences, partnerships, and overlaps.
Identify what and where you can invest, and just focus your testing there. Just. Focus. There.
Re-evaluate in late September and compare the “New” initiatives to your remaining “Always-On” efforts over the same time period. Drop the ones that performed worse, keep those on par, and heavy up on the one tactic that performed best.

Wrapping Up

If you execute the above you should increase your Q3 revenue by 3-5%. More importantly, you’ll have at least one robust, new Acquisition approach ready for Q4.

As promised:

Get your team together - or just have a personal noodling session - and run through these ideas with the mindset of “How might we…?”

Improve Conversion and Monthly Activation

Make your site faster
Remove a step from the donation flow
Add a step to the donation flow
Add more guidance
Cut 50% of your copy
Have just a single CTA - remove any other options
Remove one thing from the flow that may be distracting
Schedule one-on-one Zoom onboarding with new monthly donors
Ask your Donor Support Team and Fundraising colleagues about one thing that’s blocking prospective donors
Add one element of personalization depending on the user persona

Improve Retention

Manually onboard new donors to make sure they see your value
Let recurring donors “pause” or “snooze” instead of cancel
Add a level of gamification
Invest in resurrecting churned donors (i.e. growth = new donors + resurrected donors - churned donors)
Stop acquiring low-intent/low-quality donors

Now onto the fun stuff!

Interesting Reads

The UK’s Online Safety Bill remains a mess, especially in regards to encryption. Potentially a big own-goal in the UK government’s push to strengthen UK tech.

Google advice on making YouTube ads.

Their 2023 YouTube Culture & Trends Report is worth a look too.

Deloitte’s 2023 Digital media trends report.

Marketing Week report 80% of marketers deem creative quality key to marketing effectiveness - god knows what the other 20% are smoking.

TikTok is confusing by design.

AI Will Bring Marketing Fundamentals Back to SEO.

Thoughtful piece on the imminent demise of cookies.