How Netflix Subscribers Are Different From Monthly Donors
I love Netflix. It helped us do away with cable TV 10+ years ago. Now we live stream our favorite movies on our “older” TV. We still get Netflix DVDs in the mail, and we choose our favorite shows to binge-watch when we’re in that binge-watch mood. We’re in control of what we watch, and there’s always something on.
Netflix is just one example of that overall subscription culture that has grown a lot over the past few years. For example, DVDs, razor blades and meal planning are now coming through your door, on demand!
Just take a look at this, courtesy of Steve Froehlich from St. Jude and Polly Papsadore from PMG Direct, both of who have been on top of the subscription culture for a while now.
You can see the trends right here. You’d think this would show a promising future for monthly giving as well, as especially younger folks are more comfortable with subscriptions that are paid automatically.
And that is certainly true. More people are more comfortable using their credit card and their bank account to pay for subscriptions and monthly gifts. The most recent Blackbaud sustainer report showed that some 5 to 10 percent of monthly donors are now giving automatically from their bank account (EFT/ACH). Super news!
BUT, and this is a really big BUT: Just because people and donors are getting more comfortable with “subscription giving,” doesn’t mean everything is the same.
Some organizations are starting to make assumptions about monthly giving that may work for companies like Netflix, but they may not necessarily work for nonprofits.
Here’s why. There are two major differences between subscription users and monthly donors.
- Subscriptions have fixed pricing, and people can upgrade themselves based upon special extras. If subscription services do increase pricing, often times people will go along with it because they think they can’t live without it. Some subscription services have been able to get away with this, but there comes a time where that stops.
- Donors set the price for what they think the nonprofit(s) they give to is worth (to them). If nonprofits stop providing the “service and good feeling that the donor can’t live without,” it’s MUCH harder to do anything automatically. The donor will always want to stay in control of their giving, and I’ve especially seen that as most donors are older, their kids are becoming more and more involved in their parents’ decisions of giving.
In the past few years, some organizations have started testing so called “involuntary upgrades,” mirrored after some European activities in the past. It’s important to remember what happened in Europe with the GDPR, which sadly is starting to come our way. So it’s important to tread lightly. The word “involuntary” is exactly that.
By doing so, these organizations are turning their donors much more into ATM machines than they’d really mean to. But more importantly, they could evoke major complaints from donors (or perhaps donors’ kids who are often much more vocal), which could lead for major problems for fundraisers and could jeopardize the future of monthly giving.
Ask for an extra gift. Ask for an upgrade. Let the donor choose. Make it a voluntary upgrade. You’ll raise more money, and you’ll create a much more positive donor experience.
You’re always better off asking your donors for permission and to indicate the new upgraded amount they’d like to give. You’ll raise a lot more money, you’ll keep your monthly donors happy and you’ll keep the future of our still growing monthly giving processes a lot safer.
Erica Waasdorp is one of the leading experts on monthly giving. She is the president of A Direct Solution, a company serving nonprofit organizations with fundraising and direct marketing needs, with a focus on monthly giving and appeals. She authored "Monthly Giving: The Sleeping Giant" and "Monthly Giving Made Easy." She regularly blogs and presents on fundraising, appeals and monthly giving — in person and through webinars. She is happy to answer any questions you may have about this great way of improving retention rates for your donors.
Erica has over 30 years of experience in nonprofits and direct response. She helped the nonprofits she works with raise millions of dollars through monthly giving programs. She is also very actively supports organizations with annual fund planning and execution, ranging from copywriting, creative, lists, print and mail execution.
When she’s not working or writing, Erica can be found on the golf course (she’s a straight shooter) or quietly reading a book. And if there’s an event with a live band, she and her husband, Patrick, can be found on the dance floor. She also loves watching British drama on PBS. Erica and Patrick have two step sons and a cat, Mientje.