moneyFYI
Financial Freedom Is Merely Organized Common Sense
Thinking About Brand Loyalty
Many people have AirMile cards or cash rewards on a Costco card. They influence behaviour.
What if a card could help you save and invest?
How does brand loyalty affect a charity?
There are, or soon will be, programs that deliver stock instead of cash
I have not found examples yet, but you can think about how valuable they might be. Here’s how it started for me.
Joachim Klement writes interesting columns. The one from 11 February addressed the issue of stock rewards instead of cash or other rewards.
Bump Up Your Sales, Give Your Customers Stock
I found an article from late 2020 that reported on a Harris Poll that found people would welcome the idea.
What happens?
People are enchanted with the idea of having from 0.5% to 2% of their purchases turn into stock in specific businesses. It is an easy way to become involved in the stock market with a company and the products you use.
It pays off for the merchant too. The Klement article claims that traditional programs have a payback of $3.51 of extra sales for every $1.00 of reward. Not bad, but stock-based rewards resulted in $23 of new sales.
There is a strong link between what companies you own and how much you spend on their products. For companies that want to build loyalty, it is a profitable program.
We have seen similar outcomes in other situations.
Planned Giving.
Charities should address a similar idea approach and make it easier for their members to participate. Many charities have concerns that people will give less on an annual basis if they are working on a process that provides future capital. That seems to be an uncommon outcome. Most people involved with planned giving tend to give more in the present too. Commitment.
From a strategic point of view, begin with understanding what will identify and assist potential donors. Know how you will connect. It involves three aspects. What I think of as the Columbo Triad.
- Does the member have the motivation to do it? Do they agree with the purpose of the organization? Do they see it as something they might like to do themselves if they had the time and training to do so? There are many people who use their money to allow them to do what they are good at and at the same time have some social good appear through the efforts of others they have helped fund. Think about how you can communicate what the organization does. Help the member appreciate its value in terms of does– not in terms of budgets and structure. Never assume anyone knows what you do and why you do it.
- Does the member have the means? If your organization wants a $50 million dollar expansion, there are few who could supply the funds. From a practical standpoint, any motivated member can do something and they will be happy. Never let the big number get in the way of the willing helper. Consider an Edmund Burke assessment of an error. “Nobody made a greater mistake than he who did nothing because he could only do a little.” Be sure you do not help your members make Burke’s “great mistake.” Emphasize the process of purpose fulfillment, not the event of achieving some number.
- Does the member have the opportunity? That’s on you. In my experience, almost no one thinks about it enough to get it to happen without help. The payback is too remote, and the immediate action steps are outside their normal skillset. The only question to address is which comes first the opportunity or the motivation. Most of the time it is the opportunity, but if the motivation is underdeveloped, the likelihood of follow-through will wither quickly. Know what motivates and why. Means are unimportant. Many people think they cannot do much but a couple aged 50 who have $50 a month to direct towards a gift in their estate can buy a second-to-die life insurance policy that will, upon their deaths, produce $50,000 or more for the charity. The decision to have the charity be the owner and the member get a donation receipt for the premium as they go, or have the death benefit flow through the estate instead, is one that will be used to optimize value to the donor.
Show people a way to do something valuable for reasons they believe in and they will tend to do it.
In many ways, estate plans begin today.
The bits to take away
Many opportunities are missed because the charity does not do enough to make it easy for a potential donor.
There are far more people who would like to donate than do.
Understand your purpose and how people can connect to it. Sometimes it is as simple as understanding brand loyalty.
There are more than 80,000 charities in Canada. That’s a lot of competition. The most capable are able to show why what they do matters. The ones who can connect and lead their members will survive.
Help me, please. If you have found this useful, please subscribe and forward it to others.
I build strategic, fact-based estate and income plans. The plans identify alternate ways and alternate timing to achieve both spending and estate distribution goals. In the past I have been a planner with a large insurance, employee benefits, and investment agency, a partner in a large international public accounting firm, CEO of a software start-up, a partner in an energy management system importer, and briefly in the restaurant business. I have appeared on more than 100 television shows on financial planning, have presented to organizations as varied as the Canadian Bar Association, The Ontario Institute of Chartered Accountants, The Ontario Ministry of Agriculture and Food, and Banks – from CIBC to the Business Development Bank.
Be in touch at 705-927-4770 or by email at don@moneyfyi.com
moneyFYI 