Unlocking the Power of Subscriptions for Business and Charity Success

About the Guest(s):

Dave Raley is the founder of Imago Consulting, a firm specializing in advising businesses and nonprofits on sustainable giving and subscription economies. With an extensive 18-year background in advertising and marketing agency spaces, Dave has transitioned into a consultant role, focusing on helping organizations harness the power of sustainable revenue streams. He is also an upcoming author of the book "The Rise of Sustainable Giving," which offers insights into leveraging the subscription model for continual growth in the nonprofit sector.

Episode Summary:

For today's episode of Talking Shizzle, host Taylor Wilson talks with Dave Raley, founder of Imago Consulting, to discuss the evolving subscription economy and its implications for businesses and nonprofits. They delve into the increasingly essential role of subscription services in creating sustainable revenue streams in an unpredictable market. Dave draws from his wealth of experience and upcoming book, "The Rise of Sustainable Giving," to guide listeners through integrating subscription models into their growth strategies.

Taylor and Dave explore how modern consumer behaviors have shifted to favor subscription services, with insights into integrating these models into both profit-driven ventures and nonprofit organizations. Discussing the cultural shift towards a subscription-based economy, the conversation covers the impact of this change on marketing strategies and consumer expectations. With search-friendly terms like "sustainable giving," "subscription economy," and "recurring revenue," the episode provides actionable insights for organizations looking to embrace subscriptions as a core part of their development strategy.

Key Takeaways:

• Subscriptions are becoming a dominant part of consumer behavior, offering opportunities for businesses and nonprofits to create sustainable, predictable revenue streams.
• A successful subscription model must deliver ongoing value to customers or donors, not merely recurring transactions.
• Many nonprofits can leverage the same cultural shifts that have allowed for-profit subscription services to thrive by focusing on delivering continuous impact updates and improvements.
• The average American has 12 subscriptions, indicating a significant market shift towards ongoing service models which businesses can capitalize on.
• Businesses and nonprofits alike should focus on understanding their audience's motivations to design subscription models that truly provide value.

Resources:

• Creative Shizzle - Creative Shizzle Website
• Imago Consulting - Dave Raley's consulting firm
• Sustainable Giving Book: SustainableGiving.org
• Robbie Kelman Baxter - Author of "The Membership Economy" & "The Forever Transaction"
• Zora - Subscription Management Platform
• Rocket Money - Subscription Management App

For more insights into leveraging the subscription economy for sustainable growth, listen to the full episode of Talking Shizzle and subscribe for more enlightening content on business and nonprofit strategies.

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Transcript

0:00:03 Taylor Wilson: Hey, hey, hey, all you lovely people out there, I know you’ve got a lot going on in your day and you have big dreams for your brand. Are you ready to talk some shizzle and learn some shizzle from entrepreneurs, leaders, change makers and overall interesting people who like to shake things up? I’m your host, Taylor Wilson, founder of Creative Shizzle, and I’m stoked to bring you a fresh episode of Talking Shizzle today.

0:00:33 Taylor Wilson: This show is all about helping you think differently so that you could grow your business or your cause. Check us out on the web@creativeshizzle.com now let’s get into it and talk some shizzle. All right, what’s up, folks? We’re here with a new episode of Talking Shizzle. Dave, I’m super excited to see you, to talk to you. You’ve got a lot going on in your life. Dave Raley, founder of Imago Consulting. What is up, man?

0:01:05 Dave Raley: I would like to say not much because isn’t that the normal American response or busy. That’s the other American response. But no, it’s just an incredible. We were recording this in January. It’s just like this year feels like I was thinking about those SpaceX launch videos where you just like any rocket, honestly, where you watch the launch and it’s just like you see the smoke and you see the fire and then it’s like, okay, what’s going to happen next?

0:01:30 Dave Raley: This January feels like just the beginning. Momentum of the like, of liftoff. And so I’m just like, I’m exhausted, but I’m on fire. Like, this feels so good.

0:01:42 Taylor Wilson: I love that. Okay, there is a side note on that. There’s a documentary I was watching maybe over the Christmas break or right before that about rockets. I don’t remember the name of that.

0:01:55 Dave Raley: Google it. Rockets. Taylor.

0:02:00 Taylor Wilson: I’m going to find out what that thing was. I watched. Well, it was actually really interesting because it was about how much there is in space technology.

0:02:09 Dave Raley: Yeah.

0:02:09 Taylor Wilson: That we’re like, most of us aren’t even aware of, like, what’s really going on with like, satellites and like this whole huge industry now.

0:02:17 Dave Raley: So, like.

0:02:18 Taylor Wilson: Yeah, yeah. So like we, we know of like, you know, SpaceX and stuff like that, but there’s all these rocket companies now trying to like, own the market on.

0:02:29 Dave Raley: Rockets and private space exploration.

0:02:33 Taylor Wilson: Private, yes. Yeah. So that’s, that’s another, another conversation. But tell me about why you feel like it’s like a rocket ship. So let’s like get into that.

0:02:43 Dave Raley: The big, you know, headline for me is I’ve got a book coming out in two weeks. It’s called this the Rise of Sustainable Giving. And it’s all about the subscription economy and specifically because of the world that I work in, how charities can take advantage of what’s been happening with growing subscriptions. But you and I have talked about this as both as entrepreneurs, as business people. To answer your question more broadly, I’m just coming up on the three year mark of launching Imago Consulting.

0:03:13 Dave Raley: Prior to that, 18 years in the advertising, marketing, agency space. And there’s just something I’ve noticed Taylor, in the and I’m curious as to your thoughts on this, like stuff that I’ve started over the years, either I’ve personally started, I either ran or started or grew seven different teams at the agency that I was on, I was at. And I noticed that whenever there was something new that was going on, it always took about 2ish years, 2 1/2 years for it to really like start to take off or to really settle in. It was like I’d have somebody that was working on a, you know, new team for me and, and, and it was about that two year mark. It was like, oh, you can do great work by the way, in the first two years, don’t get me wrong. But it’s like when you start to really hit the messaging and you start to figure out and just. And so I think there’s an element of that as well. I mean, I’m curious as to, you know, what’s been your experience.

0:04:07 Taylor Wilson: I 100% agree with you with the 2 year mark and not just in entrepreneurship or like launching something new. But I’ve actually been thinking about this for a really long time. Over the course of my career I started noticing like, I don’t know, maybe the first seven, eight years into my like actual professional career was like things were happening in two year sprints or increments, you know, And I think it is, this is my theory on it. I think it’s just enough time to like really get into something and sort of like become expert at it and like work out the kinks.

0:04:52 Taylor Wilson: Because I started noticing like I was getting promotions, it was like it was like, or I was changing roles and it was like in two year increments and because I think it’s like there’s that first year, like you launch, you’re new in it, you learn a lot, you fall on your face a lot and then in that second year you really have enough time to like refine things. And I think I’ve Been noticing that too. As.

0:05:15 Taylor Wilson: And this will be relevant as we talk more about the subscription economy is we launched our subscription based creative service in 2022, the point of it being to move the business in that direction. And now, two years after launch, it’s the majority of our business, whereas it was. It took two years to become the majority of the business.

0:05:40 Dave Raley: Well, there’s an intentionality there, but I think there’s also a little bit. And you and I have known each other. We met in D.C. at an event. You and I were both speaking. And even from our conversation, I sensed some similar wiring. I actually wrote an article about was probably six months ago now. And I’ll send you a link to it. It’s called two years or 90%, which was what my mentor. He’s now my mentor. But then he was just some consultant guy that I met about almost 20 years ago now.

0:06:09 Dave Raley: And Taylor, after we had lunch, he said, dave, the way you’re wired, like you’re gifting your skillset, you is you’re going to be really dialed in on any one thing, like one, you know, mountain you’re trying to climb or, you know, thing you’re trying to launch for about two years or 90% complete, whichever comes first. And Taylor, when I first heard that, I was like, that totally sounds like a backhanded compliment. Like, does that mean I’m flaky? Or that I change my mind every two years? Or like that I don’t finish things?

0:06:39 Dave Raley: And, and I, and I wrestled with it candidly, I did not appreciate that compliment. And over my career, I had the same real that I love to create things, I love to build things. I love to land planes, build bridges. Pick your metaphor. But once it’s like pretty much dialed and we’re into like, now, let’s operate the thing on a 24 7, 365 basis, I’m like, all right, so is there something else that we can do here?

0:07:07 Dave Raley: And so it really is. It’s not everybody’s wired that way. I’m not trying to like, compliment myself. In fact, there are times that that’s a drain. But it is a realization that there are different gifts and that we can all, you know, lean on each other.

0:07:20 Taylor Wilson: Yeah, I’ve actually had very similar experiences to that and pondered the same things. Like, oh, are you saying I’m a flake? And no, it’s really. I just, I do think that there are people who are wired towards operating more heavily and there are people who are wired more towards the, like, early stage stuff. And I happen to be wired more towards early stage because like after a couple years I’m like, I’m ready for a new challenge. Okay, this thing’s kind of humming. So like, let me think about like the other new thing. And it’s maybe just, I just think people are different.

0:07:55 Taylor Wilson: So.

0:07:56 Dave Raley: Well, the fun thing and this, this will bring us to that subscription conversation is subscriptions by definition need to provide an ongoing value. Right now for you as the business owner thinking about your own subscription, I would argue that part of bringing ongoing value is innovating and bringing new and increasing what you get for your money and all. Like there’s a million things you can innovate on top of a subscription. It’s not.

0:08:26 Dave Raley: The subscription is for this this year and next year we changed it to something completely different. So there’s just as much entrepreneurship and innovation. But there is that kind of like, okay, what are we dialing in? What is the sort of ongoing experience? How do we make sure that that’s operated at a very high level, but at the same time, how are we bringing increasing additional value to the people who are subscribed?

0:08:47 Taylor Wilson: Yeah, totally. In fact, that is absolutely what we’re doing is this year now I’m like, okay, we’ve been running it this way for a while now. It’s like it’s time to innovate. And so we’re about to launch a 2.0 version that’s going to include some new exciting things. So let’s get into. Okay, you, you’re about to launch this book. It’s all about sustained giving, sustained monthly stuff. And I wanted to talk to you about the subscription economy in this context. So over the process of writing this book and studying the subscription economy, because I’m fascinated by it, what would you say is like a cultural shift that you have seen that’s maybe the foundation for why so many businesses and people are going and nonprofits even and they’re giving are going and moving in this direction.

0:09:41 Dave Raley: That’s a great question. I would say that, and especially thinking about my own background prior to this, in digital, I’ve seen a very similar trend where there will be a consumer trend that you know, percolates and ultimately becomes a dominant part of our life and consumer habits that ultimately then has follow on effects for other areas including in my world, philanthropy and nonprofits. So the digital example would be Facebook.

0:10:09 Dave Raley: Like I’m old enough Taylor that I remember hearing about Facebook after college and being like, oh man, I don’t have my, you know, alumni email address. I can’t get into this cool new social media platform called Facebook, because in the early days, Facebook was just for university students. And over time, inevitably, Facebook started to become associated not just with broader social networks, but with purchase behavior. Like, oh, you would actually hear about a product on Facebook. You might even buy it. You know, click on the link in Facebook and get the discounted version of the product.

0:10:41 Dave Raley: The reason I bring this up, Taylor, is because I was in fundraising at the time and clients would ask me, like nonprofits would say, hey, should we use Facebook for fundraising? And I’d say, not really, because people aren’t, you know, it’s a great place to maybe engage your volunteers. But people are not really giving related to their Facebook presence. Well, what happened was that over time, people started getting comfortable with opening their wallets, with purchasing products related to their social media lives.

0:11:07 Dave Raley: And candidly, even in the early days, just putting your credit card in online was a big to do. People were nervous, right, what’s going to happen? Well, that paved the way. That consumer habit paved the way for what ultimately became a huge philanthropic opportunity. And really the catalyzing moment was in the late 2000s. It was the Haiti earthquake. If you remember, that massive earthquake just completely devastated the island nation.

0:11:32 Dave Raley: And I remember Facebook and the American Red Cross partnered up and in one day they raised $30 million for charity. And it was mind blowing to people. And that was really the sort of tipping point for people becoming philanthropically involved in giving related to their Facebook presence. But it wouldn’t have been there if we hadn’t started with this consumer trend of purchasing products related to your social media presence.

0:12:03 Dave Raley: So fast forward about 10 years ago, right, we start to see subscriptions hitting our lives. Netflix was one of the early adopters. Amazon Prime, I remember Pandora. So the reality is I so about is about 12 years ago now, I started to notice these subscriptions showing up in my life for sure, in a lot of people’s lives. And it turns out that that has been such a dominant part of the landscape now for the last decade.

0:12:30 Dave Raley: Taylor, the average American today, you want to guess how many of the average American has subscriptions?

0:12:36 Taylor Wilson: I wouldn’t be surprised if it was like 50 or more.

0:12:42 Dave Raley: Yeah, well, some, some Americans, I think I’m in that boat. The average American has 12 subscriptions. In fact, 42% say 100. Yeah, yeah. Well, I was like, that’s too much. 42% of Americans have forgotten that they have a subscription that they’re paying for. Which by the way, I raise my hand, I’M in that category. I think a lot of people are. They actually did a study recently. They asked Americans what how much do you spend on a monthly basis for subscriptions?

0:13:10 Dave Raley: And the average American underestimated how much they were spending on a monthly basis by $133 a month. That’s almost $1700, $1600 a year that people were spending. They didn’t even realize it. Right. So why does that matter? Well, that matters because once it becomes a common part of our sort of culture, our willingness to pay, that starts to open up opportunities for other businesses, services, or in my case, charities that can raise money from donors who historically might not have thought, oh, I’ll give to this charity monthly or well now they’re given to, you know, Netflix and Microsoft Office 365 and Stitch Fix or whatever, you know, these subscription boxes they’re giving, they’re, they’re essentially engaged in those monthly relationships which normalizes then philanthropic behavior.

0:14:07 Dave Raley: Other types of subscriptions. And so that’s been the thing that I wanted to understand and ultimately led to the book.

0:14:14 Taylor Wilson: Yeah. And it’s interesting because we’re now in a place where we buy subscriptions for apps to help us manage our subscriptions.

0:14:23 Dave Raley: Absolutely. And by the way, your philanthropic giving, if you shows up in those, in those apps. So Rocket Money is the big one a lot. Yep.

0:14:33 Taylor Wilson: Yeah.

0:14:34 Dave Raley: And it will list. Here’s, here’s the charities you’re giving to on a monthly basis. I had one the other day, Taylor. It sent me a warning, a very large subscription transactions about to happen. Are you sure you want to stay subscribed? And I was like alarmed. I was like, what, what is this? I opened it up and it was my kids school tuition payment because it detected, well, gee, that seems to happen every month. And they’re like, yeah, people even today are being reminded like, are you sure you want to. You know, because subscriptions are not about just tricking people into recurring transactions. That’s the, that’s the bad side of subscriptions.

0:15:13 Dave Raley: And the reality is those don’t last because you get fooled once. Right. Fool me once. And so people are much smarter today about discerning like when am I actually getting ongoing value and you know, and then jump and ship if you’re not.

0:15:27 Taylor Wilson: Yeah, I think I was actually having this conversation similarly last week about like customer or in your case, donor experience. I do think one of the cons of the subscription economy is that people do get caught off guard a lot of times. But I think that that comes down to poor communication by the brand. And I think it is on the brand to communicate well. And it’s so easy to automate this to just like, hey, you’re about to get billed.

0:16:00 Taylor Wilson: And those brands that remind me I have a much higher loyalty to than those brands that don’t remind me where. Then later I’m kind of, wait a second, I didn’t realize I signed up for a free trial for this thing and. Oh, God, no, no, yeah, the set.

0:16:21 Dave Raley: It and forget it. I’ve heard that term. Those are not true. Actually, for the book, I did quite a bit, not only just research into the subscription economy, but interviewed a couple people, a gal who really wrote the book on subscriptions and the subscription economy. Her name’s Robbie Kelman Baxter. She wrote two books, actually, one called the Membership Economy and the other called the Forever Trans Transaction. Highly recommend it.

0:16:45 Dave Raley: And then I also met with Amy Connery, who is the head of the subscribed institute at a company called Zora, who specializes in subscription enablement. And she actually, fun enough coined the term software as a service. You know, we talk about SaaS business. Amy’s the one that was like, came up with that, that term back in the day. And so when I talk to them, it’s all about ongoing value. It’s about delivering an experience.

0:17:17 Dave Raley: In the book, I talk about six different shifts in the subscription economy that we can benefit from and learn from. And that comes from this idea that we can’t just trick people into giving to us or transacting with us on a monthly basis because that’s not going to last. That’s churn and burn. And the vast majority of the value of your subscribers or your ongoing recurring donors comes after that first transaction. So if you can fool them into the one transaction, that’s the bad news, because you need them to stick around for 12 more transactions. In the case of charities, the average donor sticks around for it depends on the study you look at, but conservatively, I would say about 40 months. 4, 0 months.

0:18:01 Dave Raley: So you’re going to get 40 more or 39 more monthly gifts on a low end. So you had better provide a great experience, good reporting back, and, you know, affirmation and all those sorts of things.

0:18:14 Taylor Wilson: 40 months, that’s a long time.

0:18:16 Dave Raley: Yeah, I wish. I’m sure Netflix wishes they could get that.

0:18:19 Taylor Wilson: I know. I was like, that’s longer than I would have thought for sure. I was thinking maybe you were going to say like an average of eight or nine months or something like that. 40 kind of blows my Mind, I think generosity.

0:18:31 Dave Raley: There are some areas where generosity is a little bit different than traditional pure consumer type subscriptions where it’s like if I’m not watching, you know, Hulu for a couple months, I’m canceling that subscription. This is not a journey. Right. Whereas I might give a little more leeway to the local shelter, you know, that they didn’t, you know, provide an update, you know, this month or whatever.

0:18:53 Dave Raley: But still more and more of those kind of consumer habits tend to bleed over into our philanthropic lives and how we treat expect from charities.

0:19:02 Taylor Wilson: So you’ve been in marketing for a long time and worked at various agencies, started your own. How are you looking at marketing, subscription based services or products or philanthropy versus the old days? Like, do you think marketing is changing because of this new way of paying for things? Essentially?

0:19:31 Dave Raley: Ooh, that’s a big question. I think marketing service firms are certainly changing, as you’ve just illustrated. Right. In terms of how you provide value. Even though what I do, because I don’t consider Imago consulting really an agency, it’s more of a consultancy advisory practice because we don’t ultimately implement or design or code or do any of those things. But you know, we do coach and that is an ongoing value proposition. And obviously if the coaching isn’t very good, then you’re not going to continue.

0:20:00 Dave Raley: But that’s a subscription. Right. And so I think the field of marketing is changing as well because, and this is a big tension in the charity sector as well. So much of marketing is about to use a negative term, churn and burn. It’s like how many people can we, you know, drop into the top of the funnel to get out of the bottom of the funnel? We’re operating on tiny, tiny percentages and low margins and we’re just trying to get one more widget out of the donor or out of the customer.

0:20:30 Dave Raley: And I think the thing that can be really beautiful about subscriptions is if they’re really going to be successful, they have to be about the customer. Like those are the subscriptions that last. And so I hope that both on the consumer side, the business to business side as well as in, in philanthropy, it’s going to create better value, better experiences for the folks who are quote unquote, subscribing, whether that’s a monthly gift to their charity or a quarterly subscription to the marketing service or monthly streaming subscription. Right. Is that realization that you have to provide ongoing value. This is not just about the one time purchase, just 12 times a year.

0:21:16 Taylor Wilson: I want to get into the Next phase of this. So we know we live in a subscription economy. Our credit cards tell us that. Let’s talk about why or how to think of this in terms of like building predictable income and some things. And maybe you did, in your research for your book, you learned some, like how to do this well. So whether you’re a small business or you’re a non profit and you’re thinking about adding in subscription based services, products, giving, how do you build it in a way that works, that is sustainable?

0:21:56 Dave Raley: The first part for the book, just speaking about that, the entire first part of the book is why sustainable giving matters. It almost can be assumed, just like with a subscription business, well, it matters because it’s more money on an ongoing basis, you know. But if you look at the market, subscriptions have been so good for business. Zora, the company that Amy Connery, who I mentioned, works with, they publish a subscription index, subscription business index.

0:22:25 Dave Raley: And over the last 12 years they found that the average subscription oriented business, and this is using publicly traded market data, the average subscription business outperformed the general market and the S&P 500 by 4x like a compound annual growth rate of almost 17% for 12 years. So it’s good for business. But again, the only way it’s good for business is if it’s good for the customer. Because you have seen a lot of those churn and burn that have given subscriptions a bad label.

0:22:56 Dave Raley: So that’s important. Consistent ongoing revenue is obviously important. You know, and the first line of the book, by the way, for charity to charity leaders is January 1st is the worst day of the year. And this was a quote from a friend of mine who just said, man, you work your butt off. You, you know, fourth quarter, especially December, is like prime giving season. You know, tax, you know, you’re in tax receipts and it’s the holidays and you know, they’re doing all these things and then you, no matter what you do, you make the budget, you miss the budget, you exceed the budget on December 31st, guess what, it’s January 1st, you get to start over.

0:23:37 Dave Raley: And you’re like, now I have to rebuild donor file, my, my donations. And this happened, by the way, I know I have business friends that like basically are rebuilding their business every year because you’re like, yeah, so it’s like, maybe there’s a solution to this. And that might be providing an ongoing value that justifies an ongoing relationship. And so yeah, so I just think there’s a lot of parallels that we could learn from between those two Worlds.

0:24:03 Dave Raley: But it doesn’t have to be. That’s the message that the book is about. Like, it does not have to be this way. And increasingly, charities and businesses are able to tap into providing ongoing, sustainable value that justifies an ongoing, sustainable relationship in the charity sector. Taylor. My estimate is 75% of nonprofits have historically been left out of being able to build a strong, growing, recurring giving program.

0:24:32 Dave Raley: And that’s because they haven’t been, you know, one of the 25% of nonprofits that have like, what I would call membership, where there’s like an actual benefit to the donor. So think of like public television or public radio, where, like, you might give, but you also then consume the radio program or you go to the museum or the local arts institute. Those are great for recurring giving programs, by the way. If you can do that, more power to you. But the vast majority of charities can’t do that or haven’t been able to do that. And so this is a message of hope and optimism for those 75% of charities that have historically been left behind.

0:25:10 Dave Raley: But it all came from the business sector. Right. And so we’re seeing this opportunity on the consumer and B2B side as well.

0:25:16 Taylor Wilson: Yeah, well, I mean, you have to constantly resell hope. Like, that’s part of your customer experience. If that, you know, it’s like if you don’t have this, quote, membership thing that you’re giving out where you’re getting something tangible, then it’s on you to make sure. I want to get into this next. That the experience that your audience has with you is just always on. And so that’s where like just communications come into play. So like regular communications about impact and hope and like continuing to like, it’s almost like you’re continuing to hit that dopamine thing that people get when they give.

0:25:56 Taylor Wilson: Hey, like reminding people like this is what your money’s doing, like, you can continue to feel good about it. I think, you know, that’s really probably something that you’ve got a lot of thoughts on.

0:26:06 Dave Raley: The, you know, if 98% of the value of a donor is after the first gift, which is, by the way, that’s not a made up statistic. Like, that’s how the math works is 98% of the value of a recurring donor is subsequent to that first donation of whatever amount, then you have to think about what that ongoing experience looks like. And you’re absolutely right. Affirmation is a huge part of that. In the, in the philanthropic sector, it’s like how my gift Actually made a difference. And how made a difference this month different from last month.

0:26:38 Dave Raley: But also, and this is where we can learn from the subscription economy. These things called upgrades in the business world is very common. Right. Okay, what are we going to cross sell or upgrade or you know, enhance. And the charity sector for the most part, most organizations have just sort of hey, thanks for that 25 bucks a month. We’re never going to ask you again. Actually it turns out your subscribers, your monthly donors or your customers are often the most valuable single gift or single purchase additional behaviors because they are the most bought in. They are the most.

0:27:14 Taylor Wilson: Yeah.

0:27:15 Dave Raley: So in my experience in the, in philanthropy, the average donor who gives on a monthly basis gives an additional 25% on top of whatever they give on that recurring basis. So if I give, let’s say keep the math simple, $500 a year, so that’s 40 some dollars a month, then the average donor will give another hundred dollars on top of that through one time gifts. So one of the things we talk about is are you actually asking your recurring donors to give on some regular basis?

0:27:48 Dave Raley: Because organizations will either say never ask them again because we don’t want to mess up a good thing, which is not a good strategy. Or they say no, let’s ask them 30 times a year. And it’s like no, that’s not a good strategy either. So just like a business, you want to think about what those, you know, you might use the word upgrade or cross sell in the business world. And then the other thing is up is just simply upgrading their giving amounts. So like Spotify is a perfect example. We love Spotify.

0:28:15 Dave Raley: I’ve sent Spotify, I did the math recently, several thousand dollars over the last few years because we love Spotify, you know. And I was listening to it this morning as I wrote an article, but my kids started using my Spotify account, Taylor. And so then I had like one of those. Do you ever get that Spotify wrapped? Do you know what I’m talking about? The end of the year they do the.

0:28:35 Taylor Wilson: Yeah, except the music.

0:28:36 Dave Raley: Do you like?

0:28:37 Taylor Wilson: Yeah, yeah, yeah. Except I do. I’m on, I’m a YouTube Premium. But they do like the same thing. And it’s really funny because I’m like, wow, I listened to that song.

0:28:47 Dave Raley: I know. Well, mine was hilarious because my two young daughters listen to different music than daddy. And so my Spotify report was like, look at all this. I don’t even remember what the artist were but I was like, that’s not my listening. And I was like, well, and then when we try to stream at the same time, it was like, oh, no, you need a family plan to have three devices streaming at the same time. So I gladly send Spotify. I think it’s like 1799 or 1699amonth now, because my whole family uses it. We can share.

0:29:17 Dave Raley: I make playlists for my girls. We have this wonderful experience of discovery, but we’ve essentially upgraded. I wasn’t spending 16.99 on Spotify four years ago, but they’ve upgraded and increased the experience and I pay more now. Well, charities haven’t historically done much with that, and so that’s another opportunity is to ask for increased giving or to increase the quote, unquote price point.

0:29:43 Taylor Wilson: So the places I noticed it the most, one YouTube Premium did the same thing for me. It was like I was sitting here one day and my son was on Spotify, but just on the free plan and was like, mom, can I get premium Spotify? And I was like, well, I already paid for YouTube Premium. And then my husband, he just did everything on the free account. I was like, well, why don’t you just get premium? He was like, I don’t want to pay for it. I’ll just watch the commercials. And I’m like, I wouldn’t.

0:30:12 Taylor Wilson: So then eventually it all came together. And yeah, Now I paid 22.99 for a family plan for YouTube Premium, but it is really like, it’s worth it because I do the music stuff, but I also watch so many podcasts that, like, having a commercial free is really good. And I will say that’s one where I find it highly, highly valuable. The one where it bothers me is like on the, the TV channels, the streaming, just the constant, like, upsell.

0:30:45 Taylor Wilson: To be commercial free on those ones, I feel like is way more bait and switchy feeling for some reason.

0:30:51 Dave Raley: Well, and now they’re feeling, they’re realizing netfl included, Disney plus. Oh, wait a second, we can make as much or more money actually using, like, TV ads, you know, and it’s so. It’s so funny how full circle these things are. I remember when I was a teenager, Taylor, watching tv, and I was like, someday you’re gonna just be able to subscribe to the channels you want because you, you know, in the olden days, right, you get the bundle and it’s like 152 channels and. And you’re like, I watch four of these and I remember thinking, it’s going to be such an amazing world when we can just subscribe.

0:31:25 Dave Raley: I wouldn’t have used the word subscribe back then, but when we can just pay for the three channels we use. And then now we’re in that world and we’re like, oh, man, I’ve got a Disney plus and a Hulu and a Paramount plus and a peacock. And like, oh, shoot, I want to watch the football game. Which one is that on? And like, oh, I can’t.

0:31:45 Taylor Wilson: Yeah, I have to subscribe to that one now. Just to watch a football game completely. I mean, I don’t know. I probably have got all of them. It’s ridiculous.

0:31:54 Dave Raley: Y.

0:31:55 Taylor Wilson: And then you still get stuck in situations. Yeah, exactly. And I noticed this recently, like, particularly with sports, because this was relevant with trying to watch the national championship games recently is like, each one. Wait, what? Where is it? How do I. Oh, I don’t have that one. Oh, I know. For the love of God, I am not subscribing for one thing else. I will watch something else.

0:32:17 Dave Raley: Yeah, yeah. All these. In these industries go through these kind of. Of moments of, like, maturity, for lack of a better term. And we’re in some of the subscription areas, especially with streaming. We’re definitely in that kind of unsettled, okay, do I have to subscribe to everything? But now you even see, like, Disney recently partnered with. I want to say it was Paramount or NBC, one of those, to basically say, well, if you just pay for this one bundle, then at least you get these things together. Right. They’re starting to. It’s ironic. It’s coming back the other way to. To essentially bundling.

0:32:48 Taylor Wilson: Yeah, it is. It is. So I want to talk a little bit more about this customer experience with, like, overcoming challenges, because. Okay, I do think we’re at this interesting point right now with customer experience or donor experience with these subscriptions when it comes to creating a great experience. So when I first met you, yeah, like you said, we were both at a conference speaking, and you gave this talk about Disney and the Disney experience.

0:33:20 Taylor Wilson: I want to talk about, like, can you bring that into creating, like, that Disney experience and that sort of, like, keynote that you do into this, like, you know, realm of people who are thinking about either adding a subscription product or service to their business or to their organization.

0:33:38 Dave Raley: Absolutely. And I think the key mental model there is a subscription is not just taking your normal product or if you’re a charity, your normal offer or ask and then just saying, would you give me 12 of those a year? That’s the mistake that most organizations and especially charities will make is they’re just like, well, let’s take what we do. So I’ll give you an example. The first organization I ever worked with in the charitable sector was called Union Rescue Mission. Wonderful organization, still doing great work in Southern California and Los Angeles.

0:34:08 Dave Raley: They are the oldest rescue mission in Los Angeles and one of the largest in the United States. And they do wonderful work. The very first program I ever worked on, Taylor, was a monthly recurring subscription giving program. This is 20 years ago, by the way. And it was this idea of at the time when I came in, it was a what they called a meal a day program, meaning to serve a homeless person a warm, hot meal, cost A$15 or whatever because they had donated goods and volunteers that serve those meals.

0:34:38 Dave Raley: And the bummer Taylor was that that was not a very good monthly giving ask. They had a small number of donors that gave. They had a pretty low fulfillment rate. And this is my illustration of it’s the best ask for rescue missions like single gift Ask, single purchase Ask was essentially a meal because it was like super easy, super tangible, not that expensive. You could basically give an impulse gift at, you know, Thanksgiving time to help, you know, cover some meals.

0:35:09 Dave Raley: But it made for a really poor ongoing value proposition. So what we did, this is again, back in the day, the agency had decided to basically revamp the program into what we called representative child sponsorship. So we were telling you now stories of people who were family women and children who were at the mission who are benefiting from the organization services. And we need your help on an ongoing basis to help people like Sarah and her son Elijah, and what they’re going through. And. And so we were able to pivot the program.

0:35:42 Dave Raley: So part of it is not just taking your product and saying, how do we do this monthly? Or whatever, and truly thinking about in the eye of the donor or the customer, what does ongoing value look like from you? And then the second thing I recommend, and I talk about this in the book, is really understanding and digging into your donor motivation or your customer motivation. And so it’s very. You’ll be familiar with the field of human centered design very much. How do we actually talk to our constituents and really get underneath? What is it that they need?

0:36:17 Dave Raley: What is it that really fires their imagination that gets them going around this topic area, right? Whether it’s music or giving to the homeless, and then using that those donor or customer insights to then actually design a program that taps into those. Because the mistake charities make and that agencies make and that companies make is they just assume they know. And so they just create the product and ship it, you know, and it’s like, actually, let’s talk to the people who would be receiving this product on an ongoing basis, and let’s talk about how, you know, this actually solves a problem for them and how to design it around that.

0:36:59 Taylor Wilson: I think that’s so important. I mean, that’s really, in my opinion, the foundation. Any successful marketing or sales is really understanding what your audience wants and then speaking in a way where you’re bringing value to them as opposed to just like, this is our widget. This is our widget. This is our widget.

0:37:17 Dave Raley: Yeah, you know, let’s just bundle it differently. I’m trying to think of a good example. Well, Rent it in Music would be a perfect example in the consumer side. Like, if you would have told me 10 years ago, Dave, you should rent music from the music company, I would have been like, no, thank you. I have my MP3 collection and I buy my songs on itunes and they’re 99 cents a piece. So that’s not a big deal. It wasn’t until Pandora and then ultimately Spotify basically created this immersive experience where you’re discovering music and it’s recommending things, and you can now get access anytime on multiple devices, and you can bring your family into the full. Like, they provided so much more ongoing value than just quote, unquote, renting music.

0:38:03 Dave Raley: And so I think businesses and charities need to think about, what is that? What does that look like for us, and how are we providing ongoing value?

0:38:10 Taylor Wilson: You know, it’s interesting. So it’s like, we’ve talked about Netflix. We’ve talked about a few things where I go back in my mind to the early days. You mentioned Facebook at the very beginning of this. And I’m like, actually remember, I think the first time I got on Facebook, I was definitely in college. I think I was at my favorite college bar and people were, like, talking about it or something. So I, like, went and looked it up.

0:38:32 Taylor Wilson: But Netflix too, and how Netflix even has changed. I think probably one of the first subscriptions I really recall, like, regularly paying for was Netflix in the DVD when we were getting them in the mail. And I just remember being so excited about getting, like, my new DVD in the mail, you know, like when I’d ordered something. And then it’s interesting how then there was like, this a little bit of a shift in that before everything was on streaming to then, like, Red Box, remember?

0:39:07 Taylor Wilson: And, like, you started being able to go and instead of like, oh, I don’t have to pay for this subscription every Month I can just go get a movie when I want. It’s like a buck. And now those are all starting to close down. All of the red boxes in my area now have a sign on them that say like this is no longer in service and now we’re back into this like sort of. It’s almost like you can buy a movie one time on a streaming platform but you can also subscribe to certain things. I don’t know, it’s just interesting to see how now I think we’re seeing things come together in terms of like one time offerings besides subscriptions. So I think, I don’t know, my thought on that is just like it’s, it’s going to be a mix, you know, if you think that the subscriptions and I’m curious to get your thoughts on this.

0:39:54 Taylor Wilson: If you think subscriptions is like the only way. I don’t think it’s the only way. I think it’s like we’re gonna be in this place where it’s like, I think it’s about finding the right mix of products and services that you can almost like pair one time purchases alongside of, of subscriptions. And I think charities clearly do that as well. It’s not necessarily just one or the other.

0:40:18 Dave Raley: Yeah, I don’t know, I don’t know universally for all businesses, but I do think you’re onto something. I think there has been an advantage of these subscription first organizations, I will say in that they didn’t try to port over sort of single purchase, single gift, single purchase type behavior to then just say do that monthly. But then you do see them backing into purchases. Disney, we talked about them, you know, they’re quite good at both getting you to take that trip to Disneyland if people are watching the video here or they absolutely would love that one time revenue, you know, of, of going on that trip. But they’re also going to sell the membership, you know, program.

0:40:58 Dave Raley: And so I do think you’re, you’re absolutely right. There’s a, I don’t even want to call it a balance because actually some of the organizations that are doing really well are, are really imbalanced. Like they’re overly focused on subscriptions for a period of time and then they might pivot over time. But there is definitely a tension there.

0:41:15 Taylor Wilson: And I mean, I mean we, we have people who don’t want our subscription but they, they want like a one time thing and you know, so we’ve been even ourselves business like trying to figure out when, when to present what. And I do think that when it comes down to it, it’s really about, at least in my business, it’s about asking a lot of questions. You kind of mentioned that and doing like customer donor research.

0:41:40 Taylor Wilson: Asking a lot of questions, really understanding what people need and then pointing them down the right path for that place in time.

0:41:46 Dave Raley: You know, it’s funny you mentioned Netflix. We, we host a podcast, it’s called the Purpose and Profit podcast. And we interview business leaders and leaders of charities to talk about what are things we can learn from each other, in other words. And so we just had a gentleman on this, we just wrapped up season five and his name’s Tom Beck and he was the one of the early sort of franchisees operators for this company called Blockbuster video in the 80s.

0:42:13 Dave Raley: And so they grew like mind boggling. You know, in the early days, people talk about Blockbuster today as the sort of failed to transition to streaming model, but really Blockbuster was the innovator in delivering entertainment, you know, home entertainment from theatrical releases. And this is where I think it’s key. Your point about whether it’s DVDs or streaming or in store rentals or red boxes or whatever is that the mission doesn’t change of the organization, but the model absolutely needs to evolve and innovate to keep up with delivering on the mission.

0:42:50 Dave Raley: So if Netflix, which literally started with DVDs to your point, had said, well, we now own the mail in DVDs deep market. Well, they also would be a, an old story. And I remember candidly reading the business headlines when the CEO was investing, you know, billions of dollars a year in creating original content. This was about the time, by the way, that Disney said we’re gonna pull all of our content from Netflix. You know, I remember that.

0:43:18 Taylor Wilson: Yeah.

0:43:18 Dave Raley: And I was. And at first I thought, wow, that what a ball ballsy decision to make to like invest all this money into in your own content. Well, that’s worked out for them, right? Because it’s turned out original programming is what keep people around. But I think for whether you’re a business leader, marketer or a charity leader, listening, one of the lessons is get really clear on your mission and what you’re trying to accomplish in the world. But don’t confuse that with your model and how you accomplish that, because your model may need to evolve and not may, it probably will need to evolve.

0:43:49 Dave Raley: And how does it need to evolve? I can’t speak, speak to your specific situation, but you absolutely need to not make the mistake that Blockbuster and so many businesses have made that they just were like, no, no, no, we do vhs tapes or DVDs in physical, you know, 10,000 square foot stores because maybe people won’t need DVDs in the future.

0:44:13 Taylor Wilson: Yeah, I love that your mission is not your model. All right, so Dave, if people want to get in touch with you, learn more, read the book as it comes out. I know it’s coming out in what, a couple of weeks?

0:44:26 Dave Raley: Yeah. As we record this, we’re right on top of it.

0:44:29 Taylor Wilson: What’s the best way to find you?

0:44:31 Dave Raley: If you’re on LinkedIn, just look me up. Dave Raley. R A L E Y if you want to look for the book, it’s just sustainablegiving.org that will also send you over to the Imago website. So that’s the easiest way to get there. Just sustainablegiving.org and. Yeah, excited. I’m glad we could make this happen right at this moment.

0:44:50 Taylor Wilson: Yeah.

0:44:51 Dave Raley: So exciting.

0:44:52 Taylor Wilson: Yeah, me too. Yeah. No, and I was, I was just so happy to meet you. When we met, we definitely had a lot in common. And I think we were at the conference and then we all, we ended up at the same dinner after the conference and we were like, yeah. Huh? Like, I see you. Yeah. Yeah. So good to see you. Good to catch up. Thanks so much for coming on and talking about this today. And please get in touch with Dave if you want to learn more about his work in the charity space.

0:45:18 Taylor Wilson: And until next time, I hope you go get some of that good shizzle done. Well, hey there. That was fun. I love how much mind blowing and mind opening shizzle our guests bring to us with every single episode. We hope you enjoyed the conversation as much as we did. Make sure to hit that subscribe subscribe button on your favorite podcast player so that you don’t miss a beat of the Talking Shizzle podcast.

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