Now for the Good News....
- by John Watson
Right now the economy is pretty much shattered, the weather is appalling and we’re all ‘imprisoned’ in our homes. What’s to look forward to?
Consider the following.
Consumers have reined in their spending to an unheard-of degree. For example, households reduced spending by £80bn in April to June 2020 alone, and even managed to save around £21bn in 2020 alone. Car sales have dropped off a cliff. Nobody’s buying clothes. Nobody’s eating out. Nobody’s commuting or travelling.
This is not a normal state of affairs. The UK is a consumer society, more so than most countries. There is a wall of consumer cash steadily building up and there is nowhere to spend it. And with face-to-face and events reduced to virtual shadows, there aren’t many places to give, either.
It’s not hard, then, to see that once lockdown finishes, this wall of cash is going to flood out. In some ways, it’s already bulging out like a balloon that’s being squeezed. Look at house sales. Look at online spending. In those places where the money can be spent, then it’s reaching out and grabbing what it can: and remember that interest rates are so low that borrowing money has essentially become free.
But I don’t think we have to wait for lockdown to officially end. With the vaccination programme fully under way the mood change alone will start to drive a dramatic uptick in consumer spending and giving. And once Easter arrives, the sun will be shining, epidemiologically, economically, and maybe even meteorologically into the bargain.
After the great influenza pandemic of 1918, the 1920s ‘roared’ back into economic life.
So does this mean we – as fundraisers – simply sit back, let the golden times return and carry on where we left off?
First, it’s a question of speed. The rate at which consumer spending returns will be dramatic, and so normal service will be too slow. Call centres won’t cope. At the same time, marketers who wake up one morning will find that their competitors have woken up the day before. Media slots will have been pre-empted and will become as hard to find as toilet rolls. Media costs will shoot through the roof as well: with every media business out to recoup losses, prime rates are going to be pushed as hard as they can be, and at a speed that will take many by surprise. And on the supply side – agencies, production facilities, printers and customer care – there’s going to be a degree of stress that many won’t have experienced for a while. It will feel like a shortage.
Second, it’s a question of technology. Lockdown changed the fundraising world forever, and at a speed that nobody saw coming. Websites designed even a couple of years ago struggled to keep up, and when this wall of consumer cash hits like a tsunami, then it’s clear that the majority of websites, which have now become the primary interface with the donor, will not be up to the job. Fundraisers who have fine-tuned their online experience will be ahead of the game, and in the new fast-moving world, the donor will be more than happy to engage with an organisation which is fleet of foot and won’t bother with anyone else. Payment technology is going to be the biggest issue: if websites struggle with all the new donation methods available - voice and QR codes to name but two - then revenues are going to limp along.
Third, it’s a question of audiences. In 2020, many charity supporters switched their pledges from organisations traditionally close to their heart to more immediate concerns. Not everybody will switch back. If the online experience is shabby then the new audiences, especially the younger ones, are going to stay away. There will be more demand for engagement; the traditional ‘do not disturb’ approach of some organisations isn’t going to stack up against a more passionate group of supporters.
So while we’re all sitting at home, trying to figure out how to get those funny backgrounds on Teams to work and un-mute the sound, it really is the right time to be thinking about the new world that is only a few months away.
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