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Kevin Gentry Interviews CHQ Chairman Richard A. Viguerie (Part 1 of 7)

Richard Viguerie
Memo: To Conservative Leaders

From:    Richard A. Viguerie

Recently I had breakfast and follow up phone calls with my friend Kevin Gentry during which he posed this question to me: “There is a great need and opportunity now in the nonprofit world for conservatives to GO BIG – to truly make a difference in the direction of our country.  In your opinion, what is holding us back?”

What follows is the first in a series of blogs Kevin has written about our conversation. I’ll run a new blog every few days over the next few weeks.  From the 1960s through most of the 1980s conservatives dominated grassroots marketing.  Unfortunately, today the Left is not only ahead of us, but way, way ahead.

These blogs go into some detail about how conservatives not only can catch up with the Left, but how we can once again dominate at grass roots marketing and give our side a huge advantage.

P.S. I like to start each Saturday morning with Kevin’s fundraising tips and a cup of coffee.  I urge you to do the same if you are involved in marketing for a conservative organization or a candidate with or without the coffee.

P.P.S. You’re welcome to subscribe and/or forward these Tips to friends and colleagues who could benefit from them.  Just email: [email protected] to be added to the list to receive these weekly Tips.  Or request by postal mail to:  Kevin Gentry c/o Stand Together, 2300 Wilson Blvd. Suite 500, Arlington, VA  22201

How do you think about growing – of going BIG?

If you and I truly want to make a difference in the lives of others, what should we be doing to significantly improve our effectiveness?

Readers of these Fundraising Tips will recognize these as the questions we continually try to address.

Over an early morning breakfast this past Thursday at the Bob Evans Restaurant in Manassas, Virginia, I posed these questions to Richard Viguerie.

Richard, as you may know, pioneered the concept of political direct mail in the 1960s.  Since then, he’s mailed billions of letters (that’s right, billions).  As a result, he’s amassed a database that includes millions of generous donors and grassroots activists.

For the last six months, he tells me, he’s been mailing over two million postal letters a week.

As the focus turns increasingly to the November elections in the U.S., in the early summer he expects to mail close to three million letters a week. 

So, as I like to say, Richard Viguerie has access to data that is statistically significant.

Both from his vantage point as well as from his many decades of experience (he’ll turn 87 this September), he has extraordinary wisdom to share.  I’m grateful for his willingness to do so, as he’s been an invaluable mentor to me.

For this week’s Tip, I’ve compiled Richard’s answer to this “meta-question” --

There are so many opportunities right now in the non-profit world for us to GO BIG – to truly make a difference in the lives of others.

In your judgment, what’s holding us back?

NUMBER ONE:  There are too few entrepreneurs

There are very few non-profit leaders who are entrepreneurs.  

A key characteristic of entrepreneurs is that they are risk takers.  Very few non-profit leaders are risk takers. 

Many people are attracted to non-profits because they aren’t comfortable in a hard-charging, aggressive, business-like environment. 

If the person driving your marketing lacks energy and an entrepreneurial spirit—very little will happen. 

My advice is to avoid hanging around people who are not ambitious.  They’ll pull you down.  Instead, associate with people who are on the way up, who want to make a difference.  Get with those who are trying to climb mountains.

NUMBER TWO is a failure of many non-profits to have a fully functioning, professional development team

There’s no way I would fly in an airplane with a pilot who had the relative skills of the average non-profit marketer. 

The vast majority of those involved in marketing for causes and candidates I know are not performing at a professional level.  Most are doing their job by the seat of their pants, their gut, and their instincts.

The lack of professionalism is shocking.  Frankly, I’ve learned very little from the non-profit world – 80% of what I’ve learned has come from the giants of the business:  David Ogilvy, Peter Drucker, Leo Burnett, Claude Hopkins, Al Ries & Jack Trout, etc.

If you throw yourself into a major study of marketing, within five years you can be in the top 3-4% of non-profit marketers.  

Quite frankly, you’ll find there won’t be a lot of competition until you get to the best 10-15%.

As a start, you should insist -- even demand -- as a condition of their role that your staff spend 8-10 hours a week (mostly on their own time) studying marketing. 

For the last 58 years, I’ve spent 2-3 hours a day, 6 days a week studying marketing and business practices.

If they resist or drag their feet, fire them quickly and replace them with people with high energy and the desire to learn.

NUMBER THREE:  Not knowing your LTV

Knowing the Lifetime Value (LTV) of your donors is exceptionally important because without that information, you have no basis for determining how much to invest in acquisition.

If you decide to conduct an acquisition campaign to significantly increase your donor file, expect a return within 75 days of between 40-70% of your initial investment.  Most successful large businesses invest heavily in order to have significant long-term growth.

Peter Drucker, the premier business consultant of the 20th century, insisted that the number one purpose of a business (or non-profit) was to acquire a customer (or donor) because from the customer/donor flows profits/contributions that propel the organization to success.

The LTV of your existing donors will help you determine how long it should take you to recover your investment in finding new donors.  I encourage our clients to be prepared to wait about 12-18 months to recover their investment.

More importantly, I tell our clients that 90-95% of the value that our direct marketing program brings to them is to identify those donors who have the ability to give them much bigger gifts down the road:  4, 5, 6 and 7-figure gifts now and throughout a donor’s lifetime, including as bequests.

In other words, in determining the lifetime value of a donor, only about 5 or 10% should come from direct marketing.  The other 90-95% should come from major gifts and bequests developed by your professional development team.

NUMBER FOUR:  Ignoring 95% of your donors

Now, this said, many organizations will focus too much on raising high-dollar donations ($100+).  Those organizations that are the most successful aggressively seek out the $1, $5, $10, $25 donors.   Why?

A focus on the 5% who give $100+ is the reason most organizations only have 20,000 donors or less.  How do you get to 50,000, 100,000, 1,000,000+ donors/supporters?

Direct mail is the third largest form of advertising (TV, internet), so when my company mails billions of postal letters, we’re not only finding donors and raising money—we’re educating voters about the virtues of our beliefs and the dangers of others’ beliefs,  getting people to become activists, registering them to vote, urging them to vote, etc., etc.

The late John von Kannon, the longtime head of fundraising for the Heritage Foundation, shared that two-thirds of the $2 billion+ that Heritage has raised since its founding came from people whose first contact with Heritage was a $100 or less donation in reply to a postal mailing.

NUMBER FIVE is not putting enough resources into acquisition

I’m not aware of any non-profit organization that spends enough on acquiring new donors.  Once you’ve determined the lifetime value (LTV) of your donors, you should spend at least 25% of the LTV on acquiring new donors.

In a recent meeting with a former Heritage Foundation executive, that person told me she considered her number-one mistake to have been not mailing more acquisition letters.  And this is from an organization that recently had 700,000 donors.

Also, each year about 20% of your regular donors die, retire to live on a fixed income, lose interest, or experience financial setbacks, etc.  If they are not replaced, your income will continue to decrease until your organization becomes irrelevant.  On average, about 60-65% of those who make a first-time donation to a non-profit do not make a second contribution.

This is why you must constantly be acquiring new supporters.

And NUMBER SIX:  The failure to appreciate the power of effective marketing

Peter Drucker famously said, “Business should be primarily focused on marketing and innovation.  Everything else is a cost.”

Drucker also considered marketing to be the responsibility of the managing leadership within a business, not a separate function delegated to others.

Unfortunately, the vast majority of leaders of organizations with which I’m familiar have delegated marketing to a department, and as a silo separate from the rest of the organization.

Steve Jobs, Jeff Bezos, Mark Zuckerberg, Howard Schultz (Starbucks) did not delegate marketing.  They led the way.

I’ve developed something that I call Viguerie’s Four Horsemen of Marketing™.  The Four Horsemen are Position, Differentiation, Benefit, and Brand.

If you get these four things right, you will find that life is downhill with the wind at your back.  If you get any of them wrong, you will find that everything is uphill with a storm in your face.

*****

How do you react to what Richard Viguerie has observed – and what he views as constraints?

Are you convinced by his points?

Are any of the constraints he’s described holding you back?

Next week, I’ll share “Part Two” of my breakfast discussion with Richard – what additional, specific steps can you and I take to grow and to increase our effectiveness in a big way?

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