New Horizons in Arts, Heritage, Nonprofit and Social Marketing

Roger Bennett, Finola Kerrigan, Daragh O'Reilly

• Publisher: Taylor & Francis
• Year: 2013
• Print ISBN: 9781138118270
• eBook ISBN: 9781135743871
• Edition: 1
• Topic: Business
• Subtopic: Business General
• Index: Business

Arts, heritage, non-profit and social marketing today comprise key components of the contemporary marketing management scene. Governments, charities and voluntary sector organisations throughout the world are increasingly involved in the development of marketing campaigns, and more and more of these organisations are likely to be at the cutting edge of the application of the very latest marketing methods. Research in the arts, heritage, non-profit and social marketing fields is intellectually rigorous, relevant for user communities, and has a great deal to offer to marketing theory as well as to promotional practice.

This book presents a collection of stimulating articles that report some of the freshest and most innovative research and thinking in the authors' specialist domains. Collectively the chapters offer a balance of empirical and conceptual research in arts, heritage, non-profit and social marketing. They explore new ideas, challenge pre-existing orthodoxies, develop knowledge, and demonstrate the epistemological importance of current research in these critical areas.

This book was originally published as a special issue of the Journal of Marketing Management.

‘Don't forget to say thank you’: The effect of an acknowledgement on donor relationships

Altaf Merchant, University of Washington Tacoma, Washington, USA

John B. Ford, Old Dominion University, Virginia, USA

Adrian Sargeant, Indiana University Purdue University, Indianapolis, USA

Abstract Donor attrition is a major cause of concern for non-profit organisations. Non-profits can improve retention by nurturing donor relationships. Acknowledging or thanking the donor is a vital building block in the non-profit organisation–donor relationship. This paper examines the impact of such acknowledgements on donor relationships. In study 1, we employed cross-sectional data obtained from 478 donors to a regional public television station in the United States. We found that the effect of acknowledgements on the donor relationship is moderated by how frequently the donor gives to the organisation, and that acknowledgements help strengthen the non-profit's relationship with less frequent donors. In study 2, we used an experimental design (111 respondents) to probe the emotional effects of a thank-you note. The findings indicate that acknowledgements enhance positive emotions and alleviate negative emotions; the converse effect is observed when the donor does not get a thank-you note. Thus acknowledging the donor's gift provides a promising means of fostering donor relationships and retaining donors.

Introduction

Levels of donor attrition to non-profit organisations remain unacceptably high (Sargeant, 2008). McGrath (1997), for example, identified that a typical UK charity experiences an annual attrition rate of between 10 and 20% of all supporters who make more than one contribution. More recently, Sargeant and Jay (2004) suggest the picture has worsened, and break the aggregate retention figure down to examine both cash donors (i.e. individuals who send cheques in response to appeals) and regular donors (individuals who give monthly by automated payment). They concluded that a typical charity loses 50% of its cash donors between the first and second donation, and up to 30% year-on-year thereafter. In respect of regular or ‘sustained’ giving, attrition rates of 20–30% year-on-year are common. Recent data collected by the Association of Fundraising Professionals suggest that the pattern of retention in the United States may be even lower than that in the UK, with attrition rates in initial cash (or annual) giving being reported at a mean of 74% (Levis, 2008).

Consequently, the sector continues to waste a substantial proportion of its annual fundraising spend. In a large-scale analysis of database records, Sargeant (2001) identified that even small improvements in the level of attrition can generate significantly larger improvements in the lifetime value of the fundraising database. A 10% improvement in attrition can yield up to a 200% increase in projected value, as significantly more donors upgrade their giving, give in multiple ways, recommend others, and, ultimately perhaps, pledge a planned gift to the organisation. In this sense, the behaviour of non-profit ‘customers’ and the value they generate appear to mirror that reported in the for-profit consumer sector (e.g. Reichheld & Sasser, 1990).

The marketing literature is replete with references to the benefits that a focus on customer retention can offer, including enhanced opportunities for ‘cross’ and ‘up-selling’ (Christopher, Payne, & Ballantyne, 1991), the generation of good word of mouth/mouse advertising (Chaffey & Smith, 2008; Palmer, 1994), and the provision of greater feedback to enhance the quality of the service delivered (Zeithaml, 1981). More substantively, cutting attrition can also reduce marketing expenditure, as fewer customers need to be replaced (Reichheld & Teal, 2006). This is particularly the case in the context of fundraising where it typically costs non-profits two to three times as much to recruit a donor than they will give by way of a first donation (Centre for Inter-Firm Comparisons, 2007; Greenfield, 1996). High levels of donor attrition are thus a significant cause for concern.

The causes of this attrition have received only limited attention in the literature. It appears that the quality of service provided by the fundraising team (Nathan, 2009; Sargeant & Jay, 2004), perceptions of relationship quality/relationship marketing (Bennett & Barkensjo, 2005; Shabbir, Palihawadana, and Thwaites, 2007), and the level of donor commitment to the organisation (Sargeant & Woodliffe, 2007) all have the capacity to drive loyalty. More recent work by Bennett (2009) has examined the related issue of how lapsed charity supporters might be encouraged to give again, concluding that satisfaction with the communication asking the individual to resume, personal involvement in charity giving, and donor characteristics all had the capacity to influence renewal, albeit that their influence was mediated through donor ‘regret’ at having abandoned the organisation.

In order to build strong bonds with their donors, researchers have emphasised that non-profits should nurture and cultivate their relationships with donors by providing them with quality service (Kelly, 2001; Nudd, 1991). In this paper, it is our intention to build on this nascent body of literature, examining in detail the role of one aspect of the quality of service provided by the fundraising team – the provision of an acknowledgement in the form of a ‘thank you’ for the gift. In particular, we examine the impact of such acknowledgements on donor relationships and the emotions they evoke.

The rest of the paper is structured as follows. First, we present a review of the current literature. This is followed by our first study in which we used cross-sectional data obtained from 478 donors of a regional public television station in the United States. We studied how the effect of acknowledgements on donor relationships is moderated by the donor's frequency of donation to the charity. Subsequently, we detail our second study, where we employed an experimental design (with 111 respondents) to probe the different emotions experienced by the donor as a result of receiving or not receiving a thank-you note. Finally, we conclude this paper with an examination of the implications of our findings for both theory and practice.

Literature review

Giving as a relationship

In this burgeoning era of relationship marketing, the focus is on establishing long-term relationships between buyers and sellers. Building relationships with consumers helps move a company from one-time transactions to longer-term ‘partnerships’ of exchanges (Morgan & Hunt, 1994). Equally appropriate is establishing a relationship between donor and recipient (Belk, 1979). This helps build donor loyalty and enhances the possibility of future donations (Burk, 2003; Worth, 2002). It is also being increasingly recognised that not only should non-profit organisations focus on cultivating relationships with high-value donors but also donors that give smaller amounts (Waters, 2008).

In the relationship-management literature, researchers have proposed various psychological constructs to measure the customer-organisation relationship. These include commitment, behavioural intentions, emotions evoked, trust, and satisfaction. Commitment has been defined as the enduring desire to maintain a valued relationship (Lacey, 2007; Morgan & Hunt, 1994), and usually results in enhanced customer retention (Garbarino & Johnson, 1999). Those who develop commitment to non-profits remain in these relationships, as it serves to reduce uncertainty and vulnerability (Sargeant, Ford, & West, 2006). As the literature has shown, the way in which a non-profit interacts and communicates with its donors will affect their level of commitment (O'Neil, 2008). This, in turn, drives favourable behavioural intentions, which serve as a proxy for future behaviours (Bougie, Pieters, & Zeelenberg, 2003; Swanson, Davis, and Zhao, 2007). In the context of charitable giving, Basil, Ridgway, and Basil (2006) found that donation intentions effectively predict actual donations. Another important measure of the nature of the customer-organisational relationship is the emotions evoked by the organisation. Emotions have been described as ‘mental states of readiness in response to a specific referent (for example, a consumer becomes plea...

Table of contents

• Cover
• Half Title
• Title Page
• Copyright Page
• Table of Content
• Notes on Contributors
• Introduction
• 1. ‘Don't forget to say thank you’: The effect of an acknowledgement on donor relationships
• 2. The emotional dimension of organisational work when cultural sponsorship relationships are dissolved
• 3. Persuading young consumers to make healthy nutritional decisions
• 4. Dangling conversations: Web-forum use by a symphony orchestra's audience members
• 5. The symbolic consumption of music
• 6. A journey to the authentic: Museum visitors and their negotiation of the inauthentic
• 7. ‘Where do you want to go today?’ An analysis of family group decisions to visit museums
• 8. Involvement, Tate, and me
• 9. Discovering ‘Experience-ables’: Socially including visually impaired people in art museums
• Index