Payday, purchases and giving: how timing matters

publication date: May 14, 2011
Blogger Roger Dooley ( notes a recent comment by Walmart CEO Mike Duke on the connection between the paydays of less wealthy consumers and their buying cycles. The typical Walmart shopper, Duke says, is paid at the beginning of the month and stocks up on goods then, spending much less at Walmart by the end of the month. He blames rising gas prices for accelerating the trend.

Dooley believes the Walmart experience holds a lesson for direct mail, email and Web offers aimed at lower-income demographics. "Even consumers who make such purchases with a credit card or who may not be totally out of cash may respond at a lower rate if they feel less affluent late in their pay cycle," he predicts.

Upscale customers are less vulnerable to the payday factor. Even when they're under financial stress, their access to lines of credit and a larger number of credit cards with more generous limits mitigates the effect of receiving all their current income on one day per month.

Know your donors, community

What does this mean for fundraising? First of all, it means knowing your donors and your community. If you're in a smaller community dependent on a single employer or industry, be aware of the pay schedule. Time your appeals, deploy your door-to-door canvassers and launch membership renewal efforts with pay dates in mind. It's common sense that a person with spare cash will feel more able to give than someone with little left over after paying for the month's essentials.

Better living at first of month

University of Utah marketing professors Himanshu Mishra and Arul Mishra have uncovered another trend in favour of payday-sensitive fundraising. Consumers who've just been paid are more likely to spend money on goods that the Mishras describe as "promotion-focused" - products that make their lives better. Later in the month, they shift to "prevention-focused" items that preserve their current standard or way of living.

We know that people feel good when they do good things such as supporting worthwhile causes. When we create appeals and newsletters that make people feel good about what their gifts can do or have done, the Mishras' marketing research might imply that the best time to send those communications is, again, right after payday.

Make it work with email

"Of course," Dooley concludes, "there are practical issues in acting on this advice. Not everyone is on the same pay cycle, and it seems that more affluent consumers who don't live from paycheck to paycheck would be less influenced by payday issues. Still, this work presents some interesting possibilities."

Email marketing may be part of the solution, with data segmentation by likely pay date. Is anyone testing or doing this, especially in a single-industry community? Share your comments below.

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