I wanted to follow up on the post below on why the decision, obviously influenced by Susan G. Komen Foundation Senior Vice President for Public Policy Karen Handel, has not only done irreparable damage to their brand, but has destroyed years of marketing and fundraising work within the organization.
Organizations like Komen spend a great deal of money to essentially bring a great deal more money in. This involves purchasing mailing lists from like-minded organizations or ones with probable cross-over appeal. While all organizations soliciting money are on the lookout for new members, the gold standard is members who will pony up once a year or, better yet, in response to continuous appeals for financial support.
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As an example, based upon my career in the catalog bidness, you purchase a small sample mailing list at, say, five cents a name. Depending upon the industry, you’re looking for a response rate of somewhere around 3% (you have captured 3 new customers for every 100 solicitations) but hopefully more. When it is all said and done, with the help of source codes, you can see how many customers you actually gained and you then take your list expense and divide it by that number. Where you paid five cents for all of those names (which, by the way, you can only use once), your cost of acquiring just one of the customers now has risen to, say, $15. If that customer only spends $50 with you one time, well, that’s not such a bargain. What you’re looking for is a longtime relationship involving multiple successful solicitations (purchases, whatever) which will reduce that acquisition cost over a period of time. It’s called “customer lifetime value (wikipedia has a nice summary of it here) and that is where longtime success lives.
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Now the Komen people have spent a tremendous amount of time and money (using donation/sponsorship money) marketing themselves, tracking down new contributors, and maintaining relationships with long time contributors in order to feed the beast. Since the intersection of contributors who support both Planned Parenthood and the Susan G. Komen Foundation is in all likelihood an almost complete overlap because they are both primarily associated with women’s health issues, the fall-out has to be huge. Somewhat larger than whatever value they think Karen Handel brings to the table, I assume. Think of this as a divorce between a couple who have been dear friends of yours for years and now you have to decide whose side you want to take. Based upon what I’m seeing and hearing, women see the Komen people as the bad guys because they’re the ones who threw out their partner in order to sleep with wingnuts for strictly political and, more importantly, not medical reasons. If I’m in the marketing department at Komen… I’m pissed. I’ve spent years developing a highly successful very lucrative cash vacuum and now either by executive fiat or fear of a marginal fringe group, potentially millions of dollars from longtime contributors is lost forever over a $600,000 grant. And for those who think those dollars are going to be made up by conservatives who are already hostile to the idea of providing adequate healthcare to their fellow citizens, much less the needs of only women, well then you’re whistling past the graveyard.
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What makes this even stupider is that it didn’t have to be this way. Komen is huge. Until they started acting like Newt Gingrich in a singles bar they were, for the most part, untouchable. Hey, c’mon … attack the Susan G. Komen Foundation? What? You want women to get breast cancer? So one can only surmise that this is an actual reflection of the way the Susan G. Komen board thinks … or they blinked in the face of idle threats.
This is what happens when you sow the wind. You get introduced to the whirlwind….