Fuel Your Fundraising with the Actionology Method Using Behavioral Science

featuring Red Rooster Groups Founder, Howard Levy

Transcript

1. 1 Using Behavioral Psychology to Drive Your Fundraising Howard Levy President
7. 7 = $1.10 Bat Ball +
8. 8 = $ 1.10 Bat Ball $ .05 $ 1.05 +
9. 9 Daniel Kahneman System 1 & System 2 Thinking (2011)
10. 10 Behavioral Economics Experiements
13. 13 T H E C O G N I T I V E B I A S C O D E X Too Much Information Not Enough Meaning Need To Act Fast What Should We Remember? Availability heuristic Attentional bias Illusory truth effect Mere–exposure effect Context effect Cue–dependent forgetting Mood–congruent memory bias Frequency illusion Baader–Meinhof Phenomenon Empathy gap Omission bias Base rate fallacy We notice things already primed in memory or repeated often Bizarreness effect Humor effect Von Restorff effect Picture superiority effect Self–relevance effect Negativity bias Bizarre, funny, visually striking, or anthropomorphic things stick out more than non-bizarre/unfunny things Anchoring Conservatism Contrast effect Distinction bias Focusing effect Fram ing effect M oney illusion W eber–Fechner law We notice when something has changed Confirm ation bias Congruence bias Post–purchase rationalization Choice–supportive bias Selective perception Observer–expectancy effect Experimenter's bias Observer effect Expectation bias Ostrich effect Subjective validation Continued influence effect Semmelweis reflex We are drawn to details that confirm our own existing beliefs Bias blind spot Naïve cynicism Naïve realism We notice flaws in others more easily than we notice flaws in ourselves Confabulation Clustering illusion Insensitivity to sample size Neglect of probability Anecdotal fallacy Illusion of validity Masked–man fallacy Recency illusion Gambler's fallacy Hot–hand fallacy Illusory correlation Pareidolia Anthropomorphism We tend to find stories and patterns even when looking at sparse data Group attribution error Ultimate attribution error Stereotyping Essentialism Functional fixedness Moral credential effect Just–world hypothesis Argument from fallacy Authority bias Automation bias Bandwagon effect Placebo effect We fill in characteristics from stereotypes, generalities, and prior histories Out–group hom ogeneity bias Cross–race effect In–group favoritism H alo effect Cheerleader effect Positivity effect Not invented here Reactive devaluation W ell–traveled road effect We imagine things and people we're familiar with or fond of as better Mental accounting Appeal to probability fallacy Normalcy bias Murphy's Law Zero sum bias Survivorship bias Subadditivity effect Denomination effect The magical number 7 ± 2 We simplify probabilities and numbers to make them easier to think about Illusion of transparency Curse of knowledge Spotlight effect Extrinsic incentive error Illusion of external agency Illusion of asymmetric insight We think we know what other people are thinking Telescoping effect Rosy retrospection Hindsight bias Outcome bias Moral luck Declinism Impact bias Pessimism bias Planning fallacy Time–saving bias Pro–innovation bias Projection bias Restraint bias Self–consistency bias We project our current mindset and assumptions onto the past and future Overconfidence effect Social desirability bias Third–person effect False consensus effect Hard–easy effect Lake Wobegone effect Dunning–Kruger effect Egocentric bias Optimism bias Forer effect Barnum effect Self–serving bias Actor–observer bias Illusion of control Illusory superiority Fundam ental attribution error Defensive attribution hypothesis Trait ascription bias Effort justification Risk compensation Peltzman effect To act, we must be confident we can make an impact and feel what we do is important Hyperbolic discounting Appeal to novelty Identifiable victim effect To stay focused, we favor the immediate, relatable thing in front of us Sunk cost fallacy Irrational escalation Escalation of commitment Generation effect Loss aversion IKEA effect Unit bias Zero–risk bias Disposition effect Pseudocertainty effect Processing difficulty effect Endowment effect Backfire effect To get things done, we tend to complete things we've invested time and energy in System justification Reverse psychology Reactance Decoy effect Social comparison effect Status quo bias To avoid mistakes, we aim to preserve autonomy and group status, and avoid irreversible decisions Ambiguity bias Information bias Belief bias Rhyme–as–reason effect Bike–shedding effect Law of Triviality Conjunction fallacy Occam's razor Less–is–better effect We favor simple–looking options and complete information over complex, ambiguous options Misattribution of memory Source confusion Cryptomnesia False memory Suggestibility Spacing effect We edit and reinforce some memories after the fact Im plicit association Im plicit stereotypes Stereotypical bias Prejudice Negativity bias Fading affect bias We discard specifics to form generalities Peak–end rule Leveling and sharpening Misinformation effect Serial recall effect List–length effect Duration neglect Modality effect Memory inhibition Primacy effect Recency effect Part–set cueing effect Serial–position effect Suffix effect We reduce events and lists to their key elements Levels–of–processing effect Absent–mindedness Testing effect Next–in–line effect Google effect Tip of the tongue phenomenon We store memories differently based on how they were experienced Availability heuristic Attentional bias Illusory truth effect Mere–exposure effect Context effect Cue–dependent forgetting Mood–congruent memory bias Frequency illusion Baader–Meinhof Phenomenon Empathy gap Omission bias Base rate fallacy Bizarreness effect Humor effect Von Restorff effect Picture superiority effect Self–relevance effect Negativity bias anthropomorphic things stick out than non-bizarre/unfunny things Anchoring Conservatism Contrast effect Distinction bias Focusing effect Fram ing effect M oney illusion W eber–Fechner law We notice wh Confirm ation bias Congruence bias Post–purchase rationalization Choice–supportive bias Selective perception Observer–expectancy effect Experimenter's bias Observer effect Expectation bias Ostrich effect Subjective validation Continued influence effect Semmelweis reflex Bias blind spot Naïve cynicism Naïve realism Confabulation Clustering illusion Insensitivity to samp Neglect of probability Anecdotal fallacy Illusion of validity Masked–man fallacy Recency illusion Gambler's fallacy Hot–hand fallacy Illusory correlation Pareidolia Anthropomorphism Group y zor ffect memory confusion yptomnesia alse memory Suggestibility Spacing effect Im plicit association Im plicit stereotypes Stereotypical bias Prejudice Negativity bias Fading affect bias Peak–end rule Leveling and sharpening Misinformation effect Serial recall effect List–length effect Duration neglect Modality effect Memory inhibition Primacy effect Recency effect Part–set cueing effect Serial–position effect Suffix effect their key elements Levels–of–processing effect Absent–mindedness Testing effect Next–in–line effect Google effect Tip of the tongue phenomenon
14. 14 1 Understanding Your Audience 2 Telling Your Story 3 Crafting Your Call to Action 4 Determining Your Delivery 5 Designing for Action 6 Reinforcing the Relationship Behavior Action Model
15. 15 Framing Salience Naming Single Victim Storytelling Loss Aversion Contrast Negativity Social Norms Transparency Metaphor Rhyming Fluency Visual Graphic Progress Action Senses Context Commitment Consistency Salience Visibility Priming Anchoring Default Options Decoy Effect Stand Out Comparison Simplify Choice Set Completion Progress Monitoring Scarcity Time Pressure Immediacy Fair Value Perceived Impact Halo Effect Small Favor Credible Messenger Media Frequency 1 Understanding Your Audience 2 Telling Your Story 3 Crafting Your Call to Action 4 Determining Your Delivery 5 Designing for Action 6 Reinforcing the Relationship Behavior Action Model Self-Connection Labeling Starting Principle Fit In v. Stand Out Confirmation Bias Emotional Validation Commitment Consistency
17. 17 Actionology Method
18. 18 1. Understanding Your Audience
19. 19 Self-Connection PRINCIPLE We relate to others who share the same age, values, beliefs, etc.
20. 20 Dentists EXAMPLE
21. 21 Coke PRINCIPLE EXAMPLE Self-Connection Sales increased in Australia and New Zealand. In US, it resulted in first increase in Coke sales in a decade. 150 most common first names on 100 million cans of Coke.
22. 22 Microloans PRINCIPLE EXAMPLE Self-Connection
23. 23 SURVEY Increase Response Rate PRINCIPLE EXAMPLE Self-Connection Other people received the surveys with letters from people with dissimilar names. 56% 30% A letter was sent from a person with a similar name to the recipient (such as Robert Greer and Bob Gregar). SURVEY
24. 24 Macmillian electronic billboards PRINCIPLE EXAMPLE Self-Connection “No Dad Should Face Cancer Alone“
25. 25 Catholic Relief Services PRINCIPLE EXAMPLE Self-Connection 18.5% more than the control package that did not reference religion.
26. 26 PRINCIPLE Self-Connection Social Service Agency EXAMPLE Increases in Amount Raised YEAR 1 34% YEAR 2 8% YEAR 3 5%
27. 27 PRINCIPLE Using Self-Connection • Find out all you can about your donor prospects to uncover similarities. These can include gender, family role (mother, father, etc.), career, geography (birth, raised, work, live, interestes, values, etc.). • For example, identifying your donors as parents, you might use: “Tonight in your town, a family like yours will sit down to eat a very different meal.” • When designing a campaign, program, initiative, how can you remind donors of themselves by the name you give it? • Use success stories that relate to your donors — from the same town or county, similar circumstances, values, world perspective, etc. • Identify self-connections in donor testimonials and photos.
28. 28 2. Telling Your Story
29. 29 Single Victim PRINCIPLE The story of a single identifiable victim raises more money than statistics about multitudes in need.
30. 30 Aylan Kurdi 2011 Turkey PRINCIPLE EXAMPLE Single Victim
31. 31 Forgea PRINCIPLE EXAMPLE Single Victim 2002 / $50,000 for a mid-Pacific rescue
32. 32 PRINCIPLE EXAMPLE Single Victim Highest open rate and click rate of the 7 emails in the campaign. Year-End Email Campaign
33. 33 Loss Aversion PRINCIPLE Generally, losing something makes people twice as miserable as gaining the same thing makes them happy.
34. 34 Would you rather get a $100 discount or avoid a $100 surcharge? PRINCIPLE Loss Aversion
35. 35 People tend to choose the option that will minimize loss, more than the one that maximizes gain. PRINCIPLE Loss Aversion
36. 36 Whether a transaction is framed as a loss or as a gain has a significant effect on behavior. Applied to fundraising, donors can be motivated to support a cause if offers are framed in terms of loss they feel they can avoid. PRINCIPLE Loss Aversion
37. 37 School Bond Measure PRINCIPLE EXAMPLE Loss Aversion UNITE FOR KIDS Building Tomorrow Today School
38. 38 School Bond Measure PRINCIPLE EXAMPLE Loss Aversion This emphasized limited time to do the right thing, and that kids will lose out if we don’t act now. OUR KIDS CAN’T WAIT
39. 39 Dian Fossey Gorilla Fund PRINCIPLE EXAMPLE Loss Aversion Emphasizes threats to gorillas and their habitat rather than describing the real progress that has been made in saving gorillas.
40. 40 World Wildlife Fund PRINCIPLE EXAMPLE Loss Aversion Asks supporters to ”save the last few rhinos or elephants alive in Kenya or Zimbabwe.”
41. 41 Greenpeace PRINCIPLE EXAMPLE Loss Aversion Seeks support to save the Brazilian rainforest which is disappearing at the rate of two football fields a minute.
42. 42 National Gallery, London PRINCIPLE EXAMPLE Loss Aversion Seeks support to ensure a painting is not “lost” to a gallery in the U.S.
43. 43 PRINCIPLE Using Loss Aversion • What problem is your organization addressing? How do you currently present what you do — in a positive or negative way? • What would the world (or your area) look like without your organization? What opportunities for people would be lost without your program? • Are your images happy or sad? Have you tested which get a higher response in your fundraising? • How can you dramatize and help people visualize the loss, (a woman sitting in front of an empty plate, in a barren room, etc.)? • Look for ways to reduce the perceived risk of supporting your organization, such as mentioning how long it has been around, its capable leadership, credentials, or awards.
44. 44 Social Norms PRINCIPLE People’s behavior tends to follow that of the crowd, or what others around them are doing.
45. 45 PRINCIPLE Social Norms “Operators are waiting, please call now.” EXAMPLE
46. 46 PRINCIPLE Social Norms “If operators are busy, please call again.” EXAMPLE
47. 47 PRINCIPLE EXAMPLE Social Norms Will Planning Service in the UK 35% of people say they want to leave a legacy to charity yet only 7% of wills contain a charitable legacy
48. 48 PRINCIPLE EXAMPLE Social Norms In a test, people were offered free assistance in drafting a will, and were prompted by one of there scripts: BASELINE GROUP No mention of charity giving. PLAIN ASK GROUP “Would you like to leave money to charity in your will?” SOCIAL NORM GROUP “Many of our customers like to leave money to charity in their will. Are there any causes you are passionate about?”
49. 49 PRINCIPLE EXAMPLE Social Norms In a test, people were offered free assistance in drafting a will, and were prompted by one of there scripts: BASELINE GROUP No mention of charity giving. PLAIN ASK GROUP “Would you like to leave money to charity in your will?” SOCIAL NORM GROUP “Many of our customers like to leave money to charity in their will. Are there any causes you are passionate about?” 4.9% $3,300
50. 50 PRINCIPLE EXAMPLE Social Norms In a test, people were offered free assistance in drafting a will, and were prompted by one of there scripts: BASELINE GROUP No mention of charity giving. PLAIN ASK GROUP “Would you like to leave money to charity in your will?” SOCIAL NORM GROUP “Many of our customers like to leave money to charity in their will. Are there any causes you are passionate about?” 4.9% $3,300 10.8% $3,100
51. 51 PRINCIPLE EXAMPLE Social Norms In a test, people were offered free assistance in drafting a will, and were prompted by one of there scripts: BASELINE GROUP No mention of charity giving. PLAIN ASK GROUP “Would you like to leave money to charity in your will?” SOCIAL NORM GROUP “Many of our customers like to leave money to charity in their will. Are there any causes you are passionate about?” 4.9% $3,300 10.8% $3,100 15.4% $6,661
52. 52 PRINCIPLE Using Social Norms • What are the norms for giving among your donors? • Can you segment your database to show that a majority of your donors in a certain town, county or other geographic area have supported your organization? • Use language that is as specific as possible for demonstrating a social norm, indicating commonality and level of support. • Glean information from your website, social media, and email click-throughs to identify social norms. • Use past appeals to build support for a new campaign, such as ”87% of our members donate to our Thanksgiving Meal campaign.” • Do not say that most people are not donating to you: (“Only 3% of people donate to our site.”)
53. 53 Rhyming PRINCIPLE Using rhymes enhances persuasion and recall (which can affect behavior).
54. 54 VINCE BUCCI/AFP/Getty Images PRINCIPLE EXAMPLE Rhyming “If the glove doesn’t fit, you must acquit.”
55. 55 PRINCIPLE EXAMPLES Rhyming SOCIAL ISSUES “Loose lips sink ships.” “Click it or ticket (seat belt).” “An apple a day keeps the doctor away.” “Don’t do the crime, if you can’t do the time.” OTHER ”There’s no pain without gain.” “Birds of a feather flock together.” “A friend in need is a friend indeed.”
56. 56 3. Crafting Your Call to Action
57. 57 Email Address PRINCIPLE EXAMPLE Priming “ Provide your email address and we’ll give you a free sample of a new brand of soda.” 30% provided it.
58. 58 Email Address PRINCIPLE EXAMPLE Priming “ Do you consider yourself an adventurous person who likes to try new things?” 55% provided it.
59. 59 Language PRINCIPLE EXAMPLE Priming When people were exposed to words relating to helpfulness, they were more likely to help an experimenter who accidentally dropped items after the experiment had supposedly ended.
60. 60 Priming PRINCIPLE Influencing choices based on a response to a previous experience or stimulus.
61. 61 Child welfare organization PRINCIPLE EXAMPLE Priming Average Donation: $20
62. 62 Child welfare organization PRINCIPLE EXAMPLE Priming List three people they “know (or are known by)” or they “love (or are loved by)” DIRECT MAIL RESPONSE CARD
63. 63 Child welfare organization PRINCIPLE EXAMPLE Priming Average Donation: $24 List three people they “know (or are known by)” or they “love (or are loved by)” DIRECT MAIL RESPONSE CARD
64. 64 PRINCIPLE Priming Medical Research Charity EXAMPLE How long will we have to wait for a cure? 40% higher response rate
65. 65 PRINCIPLE Priming Homelessness EXAMPLE 43% increase in average donation
66. 66 Shriner’s Hospital PRINCIPLE EXAMPLE Priming
67. 67 PRINCIPLE Priming Shriner’s Hospital EXAMPLE
68. 68 PRINCIPLE Using the Priming Principle • Prime your donors to be more open-minded and generous by using words related to those concepts. • Prime your donors by asking questions that activate their openness. • Help your donors to think big about solving your problem. • Prime guests at your event by mentioning large giving opportunities and publicly recognizing large donations. • Prime your audience through imagery, audio, aroma, temperature, and other senses. • Prime your audience by asking them to do something. “No shows” at doctor appointments have been stemmed by asking patients to fill out appointment cards themselves rather than doing it for them. To improve attendance at events, ask people to submit questions they want answered at the event.
69. 69 Anchoring PRINCIPLE Orienting someone around a high or low number can affect their perception of the price or value.
70. 70 Girl Scout Cookies Over 12 years, Markita Andrews sold $80,000 worth of cookies. PRINCIPLE EXAMPLE Anchoring Can you donate $30,000?
71. 71 Museum PRINCIPLE EXAMPLE Anchoring ANCHOR AVG. GIFT $5 $20
72. 72 Museum PRINCIPLE EXAMPLE Anchoring ANCHOR AVG. GIFT $5 $20 $400 $143
73. 73 PRINCIPLE EXAMPLE Decoy Effect $59 Internet only $125 Internet & Print
74. 74 PRINCIPLE EXAMPLE Decoy Effect $59 Internet only $125 Internet & Print 68 32 $8,012 total revenue
75. 75 PRINCIPLE EXAMPLE Decoy Effect $59 Internet only $125 Print only $125 Internet & Print
76. 76 PRINCIPLE EXAMPLE Decoy Effect $59 Internet only $125 Print only $125 Internet & Print 68 32
77. 77 PRINCIPLE EXAMPLE Decoy Effect $59 Internet only $125 Print only $125 Internet & Print 16 68 0 84 32 $11,444 total revenue
78. 78 Museum Membership PRINCIPLE EXAMPLE Decoy Effect Picasso Club $2,500 • Meet the artist dinners • Chance to sponsor education programmes • Invites to organized trips to galleries abroad • Original lithograph • Private members bar hire opportunities Mondrian Club $1,000 • Meet the artist functions • Chance to sponsor literature about artists • Invites to organized trips to UK galleries • Signed print
79. 79 Museum Membership PRINCIPLE EXAMPLE Decoy Effect Picasso Club $2,500 • Meet the artist dinners • Chance to sponsor education programmes • Invites to organized trips to galleries abroad • Original lithograph • Private members bar hire opportunities Mondrian Club $1,000 • Meet the artist functions • Chance to sponsor literature about artists • Invites to organized trips to UK galleries • Signed print 8 42 $20,000 $42,000 $62,000
80. 80 Museum Membership PRINCIPLE EXAMPLE Decoy Effect Picasso Club $2,500 • Meet the artist dinners • Chance to sponsor education programmes • Invites to organized trips to galleries abroad • Original lithograph • Private members bar hire opportunities Mondrian Club $1,000 • Meet the artist functions • Chance to sponsor literature about artists • Invites to organized trips to UK galleries • Signed print Magritte Club $750 • Print of painting and certificate • invites to openings • shared membership of UK galleries
81. 81 Museum Membership PRINCIPLE EXAMPLE Decoy Effect Picasso Club $2,500 • Meet the artist dinners • Chance to sponsor education programmes • Invites to organized trips to galleries abroad • Original lithograph • Private members bar hire opportunities Mondrian Club $1,000 • Meet the artist functions • Chance to sponsor literature about artists • Invites to organized trips to UK galleries • Signed print Magritte Club $750 • Print of painting and certificate • invites to openings • shared membership of UK galleries 17 $42,500 28 6 51 50 $28,000 $3,750 $74,250 8 42
82. 82 PRINCIPLE Using Anchoring • What are the current anchors that you use for your donation levels? • Which donation levels have pulled the largest amounts of donations? • Which projects best convey your organization’s overall impact and how do these reflect your average gift or higher gift levels? • What are your prospect’s current anchors based on their profession, income, lifestyle, etc.? • On your donation response card, start your giving options at an amount slightly higher than their past gift or your average donors’ gift. • Create giving levels that allow your donors to easily increase their gifts in a category, for example, feeding more people, rather than choosing between feeding people and education. • Organize donor seating at events around their level of giving.
83. 83 Set Completion PRINCIPLE People have a desire to complete a set. People will opt for one “set” rather than individual items. You can create sets for your donation opportunities.
84. 84 PRINCIPLE Set Completion Imagine that you’ve been asked to donate money to a local school’s fundraiser. The school is updating its existing textbook inventory for the entire fourth grade. Each textbook costs $5 and you can donate up to 5 for a total of $25. 1 textbook ($5) 2 textbooks ($10) 3 textbooks ($15) 4 textbooks ($20) 5 textbooks ($25) I would not donate 22% increase 38% increase Each set of textbooks costs $25 and there are 5 textbooks in every set. 20% of one set ($5) 40% of one set ($10) 60% of one set ($15) 80% of one set ($20) One whole set ($25) I would not donate GROUP A GROUP B
85. 85 PRINCIPLE Set Completion In this case, a non- profit tested the Set Completion Principle by encouraging its supporters to write sets of four cards to seniors in a nursing home. We will send roughly 200 cards to each nursing home. Each senior will receive one card. Thanks! You have completed ONE card. Would you like to write another? Yes No 4.3% % completing full set (4 cards): 39.8% Within each package, we are batching the cards in sets of 4. GROUP A GROUP B Thanks! You have completed 25% of one batch of cards. Would you like to write another? Yes No
86. 86 PRINCIPLE Set Completion • What are the naturally occurring or possible sets in your work? • helping a family (rather than individual) • delivering meals to all tenants in a building • providing all the benches for a park • How can you use these to create incentives to support entire sets? • How can you use time as a set? For example, by rewarding donors who make a donation in all 12 months in the year. • How can you use events as a set? For example, by incentivizing the purchase of tickets for all three events in a series or structuring live events to reward people who bid on at least one auction item on each of five tables. • Motivate donors, volunteers, and others by pointing out the steps already taken and emphasizing how close they are to completion.
87. 87 Howard Levy President howard@redroostergroup.com Combining strategy and implementation to get results for small and medium nonprofits. BRANDING / FUNDRAISING / MARKETING redroostergroup.com