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“We worked with The Giving Lab to help us look at launching a new digital product. Their experience was an enormous help, engaging internal colleagues, breaking down the customer journey and conducting consumer focus groups.”

Julie Shaw, Mencap

Mencap came to us with a challenge.

Could we help shape and test a big fundraising idea?

It was going to need significant digital investment, so they needed to understand whether it was going to make a cash return for them.

Sure, we said.

It was an ideal project for an open innovation process.

The principles are simple.

Learn as much from other organisations and experts as you can (that’s the open bit). Use that and your own knowledge to develop the consumer product or experience and the business model. Then validate your model and look for evidence in the market of similar commercial success or similar customer behaviours.

Together we talked to other charities, experts in the proposed area, fundraising, technology and potential commercial partners to help construct a full model.

We mapped each stage of how the idea might appear to users and conducted user research on the results.

We examined the potential return on investment might be over 3 years (and whether other similar projects had achieved similar financial targets) and what investment and skills might be required to deliver it.

Consumer research and other market evidence suggested it was unlikely to deliver a sufficiently strong return.

The Mencap team took the brave decision not to invest further.

This open innovation and market testing ‘cost’ 10% of the proposed budget, but ‘saved’ 90% of the budget being wasted on a project unlikely to succeed.

It was a great, evidence based smart decision.

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Here’s a 5 stage process to test your idea (systematically):

Agree objectives and measures of success.

What are you trying to do and how will you know when you have succeeded?

In Mencap’s case, it was a success if it raised many thousands from a specific market on a repeating basis (that’s 3 measurable outcomes – money – target audience and repeatability).

Search for ideas, knowledge and data inside and outside your organisation

Invite external people and companies in to offer their experience and challenge your ideas.  Keep an open mind about the best way to do things. Put all the evidence on the table, good and bad. Look for hard data – how much has been raised by similar projects, how many charities are competing in that space?

Map out a complete end to end customer journey. Then cost it.

Walk through your idea like a customer or fundraiser or charity partner.

How will they find out about your idea? What are you asking them to do? How will they start a conversation and engage with you. What will they feel at each stage? Map out every step until the relationship is complete and ended. It could be the end of an event, or a lifetime relationship.

What’s the business model for this? What resources or skills will it take to deliver? What will it raise?

De-risk your model, by researching/benchmarking the critical parts of your model

Which elements will make or break your idea?

If marathon runners raise half the expected amount you expect what will happen?  This stage is about examining risk systematically. Take the critical bits of the model and look for evidence that this target or behaviour has been achieved before.

You might want to get 10,000 people to run a marathon, but has any charity ever managed that many? How much will people really raise? How do you know the target audience likes your big new idea?

This is where consumer research and external expertise can be critical.

We’re big fans of qualitative research like focus groups to tell us what people think they think about an idea and in tandem behavioural research where we test whether they will do what they say they will do.

One of the  quickest tests of this is facebook advertising, where you can create many potential propositions, target them at an audience and measure click through.

 

Make the decision

Does your customer experience and your business model meet the objectives you set in stage one? Is there evidence from the target audience they will like your idea and behave in the way you expect?

What’s the ROI? (that’s the return on investment). 3:1 means you’re raising £3 for every £1 you spend. 3:1 is about average in the sector but different types of fundraising have different ratios, for example a successful grants fundraising bidding for big amounts who gets lucky can achieve up to 9:1.

The final question to ask yourself is if you weren’t going ahead with this project what else could you be doing with your time, resources or passionate supporters? Is it the best use of them?

Now you’re ready to make the decision.

TheGivingLab offers innovation consulting, consumer research and digital design to help charities change and grow. Contact us: change@thegivinglab.org

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