Interview with Pareto Fundraising
Company Name: Pareto Fundraising
Company Address: 376 Jones Street, Ultimo, NSW 2007
Phone Number: 02 8823 5800
Website: www.paretofundraising.com
1) Can you tell us a little bit about you, and the marketing services your business offer?
Since graduating from the UK’s York University in 1991 with a degree in maths, I have worked in fundraising. Starting with fundraising events I moved through pretty much all the methods of fundraising. My successes in growth for the organizations I worked for came through direct marketing; mail, phone and direct dialogue (where people approach strangers on the street for monthly giving commitments).
I am also a wildlife rescuer, deadly snake rescuer, comedian (one stand up show, doesn’t really count but at least I did it) and story teller. My mini novel is available on all e-readers, $3.99 in aid of Amnesty. It is not about marketing, snakes or wildlife and it is not funny.
These days I spend most of my time consulting with charity boards, CEOs, CFOs and fundraising leaders or speaking at conferences.
My companies, Pareto Fundraising and Pareto Phone both serve Australian, New Zealand, Hong Kong and a few other international charities. Both specialize in direct marketing to individuals through appeals. You can probably work out which one uses the phone. The other works in mail and digital.
Our studio in Sydney is unusual in that it develops ‘data driven creative’. It has soul and pazzaz, but the amount of targeting, testing and hyper-personalization that goes into it is second to none in the charity world. The extra hours in work pay off with increased net income for the charities backing this approach.
2) What’s the history behind your business and how did you get started in the marketing industry?
I left my London home for a holiday with fellow fundraising friend, Paul Roberts (an Aussie) in 2001. We were playing pool and I was grumbling about my job – I was effectively the acting CEO of a mental health charity because my boss was off sick for an extended period of time, I wanted to be in fundraising, not doing board reports, union negotiations and staff issues. He said let’s set up an agency in Australia and put the world to rights with our good marketing skills, not (my) poor administrative skills. We agreed we would if he won the game. He did.
We own the companies 50/50 so agreed a dispute resolution – any argument would be resolved by playing pool. This would take us out of the work environment and back to why we set the business up. We call it the pool rule.
Ten years later the pool rule still exists but has rarely been used.
3) Who is your target customer and what type of marketing needs they have when they seek your help?
Charities, trying to raise money mostly from individuals. We work with them to increase the life time value of their current donors (customers) through digital, phone and mail communications. We also train charity staff for face to face meetings with high value donors.
One of biggest growth areas is in good old fashioned direct mail. In 2011 and 2012 our clients will have mailed more direct mail acquisition than in most of the previous five or six years. Direct mail is having an enormous renaissance, possibly caused by tightening budgets and management requiring more accountability for marketing spend. Direct mail still delivers one of the best returns in terms of ROI and volume compared to other media.
The biggest methodology for acquiring regular donors – those committed to automatic debits from the credit cards or bank accounts – is through ‘direct dialogue’ – those lovely earnest people who want to chat to you about their charity on the high street. We don’t offer that service, but we help charities with their communications plans once those donors are acquired.
Pareto Phone helps charities with their lotteries, cash and regular giving acquisition and retention programs including asking donors to begin monthly donations and upgrading those already on monthly arrangements.
We also do a lot of analysis; our data team uses predictive modeling based on millions of transactions to predict behavior of different donors and allowing charities to hone their communications for maximum return and also offer
superb levels of personalization.
4) Marketing is always changing, evolving, how does your company evolve trying to keep up with the trends of the marketing industry?
Marketing does evolve, but the fundamental driver for giving – that reward people get from giving – doesn’t appear to change at all. Media changes and fluctuates, but ultimately the same rules apply.
In the 80s Ogilvie said something like ‘in advertising the only thing that changed in advertising was the invention of tv’. When it comes to advertising now, I would argue that the only thing that changed was the invention of TV and the invention of the Internet.
Direct dialogue on one hand was an amazing innovation, but really the idea and process is as old as civilization. Asking richer people to help poorer people or the arts is not exactly innovative. The innovation came through the
processes – automatic debits, paying commissions, computerized databases.
Other example of what is seen as cutting edge but isn’t really is gamification. We are really keen on using gamification, or game layer, for increasing retention of regular givers – this is a relatively new buzz word, but Air Miles and other loyalty programs have many of the elements that we are striving for and been around for decades. The innovation comes in making it work with modern tools.
I guess I am saying that massive changes don’t really happen. The old stuff keeps working; Ogilvie’s rules for testing and getting the offer right still apply. I reckon that if commercial companies tested his old press ad rules against their new stuff it would win.
However, back in 2002-2004 some other charity direct marketing agencies didn’t respond to direct dialogue. Charities shifted budgets from traditional methods and had great growth. Charity agencies that didn’t recognize this don’t exist anymore.
Agencies like ours need to respond to trends, stay hot on the pulse but we still must remember that the fundamentals don’t really change, just the processes and the speed.
We keep on top of things and at the forefront of innovation by studying the data and having staff at the big marketing fundraising conferences, and testing new ideas all the time.
We are working with charities on gamification right now – this is one of those unproven ideas that is begging to be tested, but approached with caution.
5) Online Media vs conventional offline media… where does your company see the future heading?
As a response device, mobile and online are growing enormously. In terms of solicitation the future of fundraising also lies in online for sure – but online is a long way from ruling the roost.
The year 1970 is very important for me, a bit of a watershed year, and not just for my mum. Looking at college educated office workers, most of those born before 1970 started work without a computer on their desk. Most of those after that have always had computers central to their lives. With the exception of direct dialogue, donors tend to be older than 60 or so. Sixty plus is the key charity target audience. I will bet that online solicited fundraising will overtake offline before 2030, when our 1970 born donors move into that older age – assuming we raised enough for
climate change action charities to ensure there is a civilization then.
Even then I imagine the best approach will be like now – multichannel. For example, we know the best ways to get subsequent gifts from online acquired donors tend to be mail and phone, supported by online. It is true that the Internet didn’t kill tv didn’t kill radio didn’t kill newspapers – but they the new media always changed the old media paradigm. We just need to stay on top and test, test and test again.
Anyone who wants to flog you stuff that is unproven, with no data just great ideas and a couple of anecdotes – you don’t need to say no but make sure you put it against R & D. (PS – I have some great ideas for using game layer, mostly online, to increase retention of direct dialogue donors – it’s got to be the new big thing….!)
PPS – be wary of anything with an exclamation mark.
6) The Million dollar question: What’s the secret for a successful marketing strategy?
Data.
7) What do we need to look for, when hiring a marketing company?
Understand data, and know how to turn that into creative solutions. Proven track record in your industry, and willing to test. Of course, you need to get on well too.
8.) How do you see companies marketing their services in 10 years time?
They will probably be completing surveys like this. But most of our business comes from word of mouth, followed by presenting at conferences, where we never ‘sell’. If you just get up and share brilliant stuff people come and talk to you.
9) How do you see the marketing industry in Australia evolving? What concerns you, what excites you?
Unlike commercial companies (ok, with the exception of evil products like tobacco) charities have lots more regulations. Just like everyone else, trade practices act and other regulations apply but imagine of American Express was banned from advertising in Victoria because it’s last advertising campaign only made 40% profit.
One children’s cancer charity was banned from fundraising in that state because an event they ran bombed. Like any organization, not all marketing works all the time – but charities are not allowed to fail with even one campaign. The public eye doesn’t like it, but sometimes the regulators don’t like it either. This obviously stunts their growth, along with expectations to pay poor salaries and forcing people to choose between either be ‘good’ or being ‘rich’. (I am neither).
We are particularly interested to see how the new charities commission will effect things. It is due to come into being this year and will hopefully get rid of some of the stupid variances between states, and recognize the need for a professional approach to charity marketing.
What excites me is shifting perceptions, Charities increasing salaries and attracting brilliant people, opportunities allowing us to retain donors using online stuff and that fact that every year Australians give proportionally more
of their income to charity. Good on ‘em.
10) Tell us about one of your favorite marketing projects you have been involved with? Can you describe what was so special about it?
When David Hicks was still illegally banged up in Guantanamo Bay we worked with Amnesty International to build a replica of his cell, and put it in the main centers of Australian cities, surrounded by orange jump suited direct dialoguers.
Inside the cell was lots of information and a video camera where people could leave a message for John Howard, which went onto the web (We had to delete a few that we’re a little too rude).
Lots of advertising agencies come up with great, clever ideas like this – it was awesome. But what I loved about it was the approach that the Amnesty/Pareto team took; we were always looking to the endgame, it wasn’t about being clever or cool – it was measurable. Fully integrated multimedia that was actually measurable. We wanted to see if we could increase the pressure on the government and increase the numbers of monthly donors we signed up.
I would like to say that purely due to this campaign, David Hicks was freed. But that wouldn’t be true – lots of other fantastic people were putting their weight behind it but we know it had an impact.
11) Favorite marketing authors, books and influences?
Ogilvie of course (books, interviews, everything) Mal Warwick, if you are a fundraiser read his books (books and articles) Ken Burnett (books and articles) Made to stick, Chip and Dan Heath (book) Jeff Brooks, Future Fundraising Now (google ‘Stupid non-profit ads’ – fantastic, funny lessons for non charity people.
The ‘Leo Burnett special edition’ Paul Roberts, co-owner of Pareto. Anyone who publishes joined up, thought through data.
12) Now time for the marketing expert to market their services: what makes you a top marketing consultant ?
I doubt I am a top marketing consultant, but when it comes to charities I know my stuff. Best summed up by someone else really.
“I want to alert you that I have found that Sean Triner is the tops.
Vision Australia is a values based organization working with people who are blind or have low vision. Within our $90m turnover only 28% of income is from government.
This means we have to be really good fundraisers to make ends meet. However all we really want to do is to concentrate on our services.
Our Board consists of consumers and business people concerned to ensure the organization performs at its best and in no way compromises people who are blind or have low vision.
Whilst we believed we have raised money effectively for the last 150 plus years, we have found working with Sean Triner, and Pareto Fundraising, transformational.
Sean will challenge your preconceptions. Your long-held beliefs will be confronted. However, they will be confronted by expertly collected data and sound information.
Pareto’s data and Sean’s fun approach to facilitation will ensure that your board, or management team, has an objective, indeed profound, discussion about fundraising and the best way forward.
If, like me, you are exceedingly skeptical about fundraising consultants then you will appreciate my delight at participating in an evidentiary based, benchmarked, performance focused discussion. Fundraising consultants can be overwhelmingly self-confident whilst Sean is no exception he has substance and is well worth getting in front of your team.”
