We all know the end-of-calendar-year fundraising push is of vital importance. For most stations, it is their largest fundraising month, and, for some stations, easily 20-25% of their total yearly digital goal. Likely everyone reading this blog post could use a boost during this challenging month! Well, what if I told you that you could simply ask people for more money, and they would give it to you? Not only would people you know give you more money, but NEW people would give you more money — more money from more people. You could accomplish this with almost no work on your behalf — potentially doubling your revenue. I know it is beginning to sound like a Facebook scam or a late night informercial (It slices! It Dices!), but amazingly the above happened recently during a test we conducted.

CDP ran a two-month test with two Member Services Bureau partner stations, with each altering their minimum radio button donation amounts from $5 Monthly Sustainer/$60 One-Time to $10 Monthly Sustainer/$75 One-Time. At any time, a donor could still use the “Other” option to give less.

In both cases, the conversion rate was higher for the greater donation amount. One test station increased from a 24.5% form conversion rate to a 26.1% rate while the other increased from 9.4% to 10.2%. In both cases, the average gift was higher for the greater donation amount (with an increase between $26.36 and $81.12). The annualized revenue was also greater for the increased amount — roughly double the amount of revenue over a 12-month period. Over the two-month experiment, we tested over 8,000 form views and 1,000 donations (one-time and monthly sustainer combined).

These results were surprising enough that it is worth exploring what might be driving them, which, ultimately, we believe breaks down into three reasons.

1. Anchoring. Anchoring is a well-known pricing technique that drives higher purchase prices in the for-profit world. Essentially, a higher price point moves up the average consumer spend, even if they do not purchase the highest-priced item. The high price SETS their expectation of value and what they should pay to not feel “cheap.”  There is a saying: “To sell a $2,000 watch, put it next to a $10,000 watch” — suddenly the $2,000 watch seems not as extravagant. This is why many service products have high-end options, despite few people purchasing those. While we are not a product or a for-profit service, the same techniques apply. Most of our partners already anchor the high end of their donations with major donors in the multi-thousand-dollar range. This experiment added an anchor on the lower end.

   While many people chose the new anchor amount (more on that later), it also set the expectation that the $10/$75 was a typical amount. This meant if people wanted to be “extravagant” and donate more, their “more” became $120, whereas a form anchored at $5/$60 would see a “more” donation of only $75. The higher minimum amount lifts all donations. We also see an increase in “tip” donation amounts. Previously people would perhaps not donate $60 but would pitch in $30. Now those folks will pitch in $40, based on a $75 base.

2. Donors, especially those online, will often take the first option presented to them without spending the time to think much about it. As they speed through the donation process, they do not much note whether it is $60 or $75! If they are folks that are concerned and slow down enough to process, they can use the “other” field to enter a differing amount. We noted in a previous blog entry that people will almost always choose one of the first options when conducting a Google search. However, it is NOT just Google searches that drive behavior such as this. Most people will choose the first option no matter the circumstances. Not only will they choose they first option, but they often weight the first option, in a list of options, as having the highest quality.

   A study titled “First is Best” from the UC Berkeley Haas School demonstrated this across a vast array of choices. When choosing a bubblegum, 62% of people chose the first option presented to them. Another group of volunteers were asked to choose which criminal should be released on parole, and they consistently chose the first option presented to them. Importantly, this study provides some explanation as to why we see this behavior more pronounced in digital — the authors noted that being under time pressure enhanced this effect. The study reports, “judgments that are relatively devoid of conscious awareness will consistently reveal an effect in which firsts are considered best because firsts are privileged for several reasons that heuristic processes may rely on.”

   Online donors are typically some of the quickest donors — they put themselves under a time pressure that makes them “devoid of conscious awareness.” Essentially, they don’t take the time to think about their choice. Folks donating via mail, or even on the phone, typically take MORE time to think about their choice to donate and the level at which they want to donate. Remove that time to think, and donors simply jump at the first option presented to them. It is worth noting that this DOES NOT apply to situations where major donor amounts are listed first — having $1500 or $2000 as your first donation amount will not cause people to go ahead and select those. In that situation, they act as the “high anchor” noted above, but do not affect the actual giving amount.

3. Influence of social norms and virtual peer pressure. The minimum amount on a radio button contributes a good deal of peer pressure. Donors assume that the amount is what it is because “that is what most people give.” This is different from an anchor amount, as the anchor amounts exist simply as numbers, without societal pressure attached. The influence of social norms is ALL about social pressure. Even though no one else (for the most part) will know what a donor donated, they still feel social pressure. A study called The Impact of Social Influence on the Voluntary Provisions of Public Goods by Jen Shang and Rachel Croson referred to situations, such as recommended donation, as “social information conditions” that informed donors on what an “appropriate” amount to give was. In their experiments, they found using defined giving amounts increased average gift by 12%, which was driven by donors seeing specific ask amounts as the “norm” to which they must adhere or feel as if they are standing apart from their peers.

While there are certainly multiple contributing factors to a test such as this, we believe the previous three items — anchoring, valuing the first result and social norms, were the overriding reasons that the increase in giving amounts succeeding in driving increased revenue.

It is our belief that stations with donation amounts below $10/$75 should move to the increased donation amounts, barring any specialized pages, such as a custom donation page for seniors, kid’s club, major donors, etc. While the per-person revenue lift is not massive, it becomes so overtime, especially with regards to sustainers. Indeed, should you only change one of the two, we would encourage you to increase your sustaining gift ask array, as that increase will pay off for years to come.

This simple change alone has the potential to dramatically increase your online giving during the end of calendar year — and the sooner you deploy the change, the sooner you will enjoy that additional revenue for your station.