When targeted fundraising is just what the doctor ordered

publication date: Jun 28, 2012
author/source: Peter Baker
Many hospital fundraising appeals read like a medical textbook: a lot of small print filled with technical jargon describing the hospital's latest research programs and ultramodern equipment. But not the marketing material from Mount Sinai Hospital Foundation.

The fundraising arm of Toronto-based Mount Sinai Hospital follows a different prescription with brochures that tell the stories of now-healthy patients, appeals designed to resonate with prospective donors.

One piece targeted to young professionals tells the story of Jordan, whose birth followed a high-risk pregnancy when doctors discovered a tumour on his mother's placenta. Highlighting Mount Sinai's reputation as one of the top women's hospitals in the world, the copy describes how Jordan's mother received successful treatment while her baby underwent several weeks of intensive care that allowed him to live a normal childhood. A photograph of Jordan, now 15 years old and the picture of health, shows that he's become a competitive tennis player.

"We used to fill our creative pieces with academic text, and soon found that they weren't working for us," said annual giving director Chris Carter when communications were revamped in 2010. "Now we use a clear and more emotional message that speaks directly to our donors."

Demographic research helps outreach to new donors

Traditionally, the foundation had relied on a handful of wealthy donors as its major source of giving. But because multimillion-dollar gifts may be earmarked for a specific wing or program, the foundation sought to broaden its appeal to fund more general needs such as research programs, crucial equipment and Right From the Start, the hospital's campaign for women's and infants' health. Carter asked Environics Analytics to determine the people most likely to donate to the hospital's general needs, and help the foundation tailor its marketing and messaging.

EA turned to its flagship segmentation system, PRIZMC2, which classifies all Canadians into 66 lifestyle types based on their demographics and psychographic social values. With PRIZMC2, fundraisers only need a six-digit postal code to link a donor to a vast array of neighbourhood-level information, from leisure activities and media use to shopping preferences and donation behaviour.

Analyzing the postal codes of Mount Sinai's 30,000 donors, EA found that the highest concentration of contributors came from three distinct groups: wealthy, older city dwellers from PRIZMC2 segments like Cosmopolitan Elite and Urbane Villagers; upscale immigrant groups in clusters such as Continental Culture and Asian Affluence; and younger urban professionals from the Young Digerati and Electric Avenues segments.

Younger donors! Who knew?

Discovering Mount Sinai had donors in their thirties and forties came as a surprise at first. But the analysis revealed that young couples tend to have more discretionary cash for charities because they lack the costs associated with childrearing. "It's a myth that younger people aren't donating to hospitals," Carter explained. "Clearly, they are. And we had the proof all along."

Knowing what kinds of people were most likely to support Mount Sinai, EA helped the foundation better understand the lifestyle and mindset of its three target groups and identify their likely neighbourhoods. Carter organized a direct mail test, sending an old fundraising letter focused on infection control to the new target groups.

But the results were modest - just a 0.10% response rate. Carter initially thought the targeted marketing approach was a disappointment. But when he compared that latest return to the control segment, he discovered a 254% lift using the PRIZMC2-based target groups. Just as important, the average donation amount rose 22% over the control group to $71.65.

"The test proved that targeting works," said Carter. "But it also demonstrated that we had to get better with different creatives."

Matching patient portraits to donor segments

The hospital foundation revamped its marketing materials to better connect with its donor target groups. Gone are the plain academic letters with a "support your hospital" theme. In their place are colourful brochures and self-mailers with compelling patient portraits that are customized to the targeted donor groups.

For the young professionals starting families, the brochures feature stories and photos of pregnant women getting critical care at Mount Sinai. To appeal to the older donors, the foundation marketers profiled Rebecca, a sixty-something woman nearly crippled with arthritis who was virtually cured of the condition thanks to the hospital's care.

In addition, the foundation organized a Founders Society group for long-time donors and even sent them mailings with gift tags to encourage them to make charitable gifts in the names of their children and grandchildren.

Demographic targeting brings cost savings

The revamped marketing messages and targeted mailings proved successful in 2010. The foundation received $42 million in new pledges and gifts, and set a new record in revenue, with $35.4 million. Because past direct mail campaigns typically involved renting magazine lists and paying full postage, the cost had run as high as $1 per piece. But by sending self-mailers to all the households in a targeted postal code, postage amounted to just pennies a piece and the total cost was as little as 30 cents per mailer - a 70% savings.

"Charities don't have the luxury of spending millions of dollars to blanket a market and hope for the best," said Carter. "You need to be efficient with your fundraising and focus on areas with the greatest likelihood of getting donations."

"Hospitals can no longer rely on simple letters describing their good works to connect with people," he observed. "We have to think like corporations with clear messaging and marketing so we don't get lost in the clutter."

Peter Baker is vice president and practice leader, overseeing the fundraising, packaged goods, municipal government and fundraising sectors practice at Environics Analytics. This article about the work of Environics Analytics first appeared in Direct Marketing magazine. Used with permission. www.environicsanalytics.ca.

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