[SP] which is now Volkswagen of Muncie and Kia of Muncie and everything else, Jeff Daniels. First, a new start up called Bloomerang is happening in the central Indiana area and it is helping not for profits around the country do a better job of managing their donor relationships and their Director of Marketing joins me now, Steven Shoddock [SP]. Steven, did I explain that correctly? You help companies manage their relationship with donors.
Steven: Yeah, that’s a pretty good way of putting it. It’s essentially
a cloud based software program where non-profits can enter in
all the donations they receive and communicate with donors, send
them emails, send them direct mail pieces and just basically
keep track of all the people in their data bases.
Pete: Now, you’ve got some wizardly wizards behind this thing.
Steven: Yeah, we do.
Pete: You’ve got some of the best and brightest in the text base
behind this idea and behind the company. Help us understand
Steven: Well, we’re trying to do something a little bit differently. We
went out and found some people who really understand data and
how donors renew and how to bring about a greater lifetime value
out of donations. So, there’s the data side that we’ve got
covered in terms of the programming of the actual software but
we also hired a world class design firm to design the look and
feel of it because if you look at other software programs in the
non-profit area, they don’t look that great. They kind of look
kind of stale and tech-ish as if maybe a programmer put them
together instead of a regular human. It’s very easy to use. It’s
very intuitive. People have compared it from going to like MS
stuff to an iPad. That’s what an actual customer said of it.
We’ve got the user experience covered and we’ve also got sort of
the data side and that spring a lot of things to life for our
Pete: This obviously is not a consumer facing program and
software. It is for the not for profits, but a lot of not for
profits have been and will be using this software to interact
with their donors. How long has Bloomerang been around at this
Steven: We were founded last August, August of 2012 but the software
came live out of Beta in February so it’s been about nine or ten
months since people have been using it. We’re up above about 200
customers nationwide and really doing some exciting things for
people’s revenue and their donor relationships.
Pete: I would think of the donor world and I’m just coming out
of left field here. Steven, feel free to correct me. I would
think it’s a conversation. Do you go an inch deep and a mile
wide or a mile wide and an inch deep? To me it’s how well, what
sort of relationship do you have with your donors and it seems
to me as though you’re offering a solution that allows someone
to go a mile deep and an inch wide.
Steven: Absolutely. There’s a lot of programs out there that allow
people to input donations they receive, send out acknowledgment
letters and basically keep track of what people are doing but we
go a step further. We do something that a lot of people aren’t
doing and we focus on donor retention. Donor retention is kind
of the hot button issue in the non-profit space today. It
basically means how many people keep giving to your
organization. It’s actually a really big problem. The national
average for donor retention is only 39%.
Steven: Which means if you have 1,000 donors give to you in 2012, only
390 of them give to you again in 2013. When you factor in the
cost that it took to get those 1,000 donors only for 39% of them
to return, that’s leaving a lot of revenue and a lot of money on
the table for these non-profits. You know and I know that non-
profits have small budgets, they’re under staffed, they’re over
worked but they’re on this acquisition treadmill of trying to
bring in new donors all the time rather than focusing on their
existing relationships. That’s what we really facilitate is
nurturing and trying to strengthen the existing relationships
that those people give over a long term basis rather than just
trying to get a lot of one time gifts.
Pete: I got to think with that sort of turn over in donors, some
of it’s got to be affected just by an in personal relationship.
Pete: People go to a donor and ask for money but the reason
people give money, the reasons are so different and so diverse
that it’s become impersonal so how does a software program allow
a relationship to grow.
Steve: We focus a lot on the donor communications. It’s all about
being personal and how you communicate to them. It starts within
48 hours of that donation. The software actually will alert the
user. Hey, you’ve just received a donation. You need to
acknowledge it within 48 hours and it’ll trigger the user to do
that. That’s one example.Then, we find that you should also
reach out within 90 days. Research shows that if you reach out
within 90 days, that retention rate is going to shoot up over
40% if you make a personal connection with them. Maybe your
executive director picks up the phone and calls them in person
and says, hey, I really appreciate that donation. Can I tell you
about what those funds are going to be used for. Calling the
donor by name, sending a handwritten note, our software makes
suggestions of those kinds of things that you should do every
time you get a donation which is pretty cool.
Pete: It is and I got to think no matter how great the cause or
no matter how public the cause and how aware the donors and
audience are, it’s still about the systems.
Pete: In terms of the different not for profits you all have
worked with, I’m sure some are quite visible and some are not as
Pete: I would assume you’re building giant case studies of how
maybe not very well known charities are doing amazing things
specifically with donor retention.
Steven: Yeah, absolutely and most of our customers are kind of on the
smaller end and the cool thing I’m noticing is that the smaller
guys have a little bit more agility because they don’t have the
sort of infrastructures and systems and bureaucracies in place
that wouldn’t allow a person to just get on Twitter and start
using Twitter. Maybe their executive director can be using
social media. So, they’re actually a little bit more well
equipped to do some different things and that’s what’s great
about the software because it’s also very different and we’re
finding that these smaller non-profits who like you said aren’t
terribly visible. They’re actually doing some pretty neat things
because they have a little bit more freedom to do so.
Pete: Talking to Steven Shoddock the Director of Marketing for
Bloomerang which is a start up. Can I call you a start up or is
it a start up? Can I say start up? I guess, start up.
Steven: I think so. I think we’re ending year on so I think that’s
still a pretty good moniker.
Pete: It’s like newlyweds. How long does newlyweds last? Is it a
year or two years? This is probably not aprapoed [SP] to the
Steven: I guess if you’re talking to someone who’s been married for 50
Pete: Yeah, probably.
Steven: [inaudible 00:08:10] newlyweds.
Pete: What’s the strategy here when it comes to reaching your
audience? Do you do a lot of conferences within the not for
profit world? Is it a lot of word of mouth marketing? Since
really your software is a marketing relationship software, do
you use your own software to somehow market to the people you
Steven: We actually don’t do a lot of talking about our software. We
like to talk about donor retention and how much of an increase
and percentage in donor retention can mean for your bottom line.
We do a lot of education. We create a lot of content that
educates fundraisers on what they should be doing for donor
communications and donor management and these things. We don’t
do any advertising. We rarely go to trade shows and sit behind a
booth. We like to speak at trade shows and talk about the things
that I’m talking about now because our goal is really to help
fundraisers do a better job. We know that not every fundraiser
in the world is going to use Bloomerang and that’s find, but we
really believe that fundraisers nationwide and worldwide should
be aware of donor retention and best practices of donor
communication. As long as we do that, we’re happy.
Pete: A lot of times with start ups or web companies, you get
the feeling that the business is solve any problem that doesn’t
Pete: But in this case, this sounds like you’re solving an age
old problem that never really has had a solution yet.
Steven: Right. It’s a huge problem even if you raise your retention
rate by 10%, that equals hundreds of thousands of dollars,
right? So, you could go from generating $500,000 a year for your
non-profit to over a million by just raising your retention rate
by 10 or 15% and we’ve had clients, in fact, I got a tweet from
a customer earlier this week who said, hey, our retention rate
is up above 50% and he sent me a screen shot of his Bloomerang
dashboard and that was really awesome to see because we know how
much more income for that non-profit’s mission is going to be
generated because of that. It’s just really fun to see that
actually come to life for real organizations that are doing
great things around the country.
Pete: Before I let you go, is part of your software or part of
the system of management, does it have anything to do with
asking a donor how they like to be communicated with because for
some people like getting texts, others like getting phone calls,
snail mail, and others like getting email.
Pete: Do you play into that at all?
Steven: We do. When we actually enable people to take donations through
their website so we give people kind of a snippet of code that
they can find their website and get a donation. One of the forms
that’s available, one of the questions on a form is how would
you like to be communicated with and people can choose email or
snail mail or even social media, some people can choose that.
I’ve even seen, I’ve received personally communications of via
snail mail from non-profits that say, hey, this is a direct mail
piece obviously. Do you want to continue receiving this and
there’s a little check box and it’s already has postage on it
and you can send it back. There’s people doing some pretty
creative things with delivery systems for donor communications
Pete: Alright, so I want people to check this out,
Steven: If you go to bloomerang.com, you’ll meet a very lovely florist
. . .
Steven: . . . who we’ve actually talked to. They’re very nice people.
They’ll sell you flowers but not donor management system.
Pete: Oh, see. There I am with my research. Bloomerang.co, co.
Steven Shoddock, thank you and best of luck. I’m excited to
watch your story grow and your company grow over the next couple
years; certainly as you help retention rates in the donor space.
Steven: Yeah. It was a lot of fun. Thanks for having me.
Pete: My pleasure. Coming up after the break, long term care
costs. I think you need to understand them. They are so
astronomical in many ways that people feel like it’s Monopoly
money where you need to understand what they are, how they work
and all that’s next on the Pete the Planner Show here on 93