The Four “P”s of Subscription Giving
The Subscription Economy has changed consumer attitudes towards monthly recurring goods and services, which has led to the transformation of donor behavior. Donors are more likely to give to nonprofits on a monthly basis than ever. Study after study (after study) shows that monthly giving is the fastest-growing type of giving today.
Subscription Philanthropy is here to stay, and the more nonprofits understand and embrace the new paradigm of monthly subscription giving, the better they can take advantage of this new wave of generosity.
One of the biggest mistakes I see leaders make regarding recurring giving in the old paradigm is treating subscription giving as interchangeable with single-gift fundraising. In essence, they see recurring giving as one more offer that just happens on a regular, automated basis.
The problem with this approach is that recurring gifts, like subscriptions, are based on the premise of ongoing value that justifies an ongoing relationship.
In today’s Subscription Economy, consumers quickly drop or add subscriptions if they are not providing ongoing value.
The 2023 Subscription Commerce Industry Outlook study found that while 95.8% of all U.S. Adults have at least one subscription, consumers are more discerning about which subscriptions they have. They are more readily willing to cancel subscriptions not providing ongoing value or switch to competitors with a better value proposition.
52.6% of U.S. Adults canceled a streaming service subscription to date in 2023. Take that in for a second. Over half of Americans were ready and willing to drop a streaming subscription if it didn’t provide ongoing value.
At the same time, 59.8% of U.S. Adults added a subscription to a streaming service. In other words, subscriptions are much more sensitive to cancellation – and addition – in the consumer world. It’s all about ongoing value.
Above: Consumers are ready and willing to cancel subscriptions that don’t add value and are just as likely to add them. It’s all about the ongoing value proposition.
Thankfully, donors are more loyal than consumers. If you are a nonprofit, your subscription giving donors should be more resilient than the typical consumer subscription.
But the reality is that people are more willing to drop or add monthly commitments than ever before, conditioned by the Subscription Economy.
💡 Takeaway: Subscribers are ready and willing to drop – and add – subscriptions than ever before. Keeping subscribers – like keeping donors – is about providing ongoing value.
Subscriptions are Products
A subscription is as much about cultivating ongoing value as it is about acquiring the subscriber in the first place. So it is with subscription giving – the first hurdle is to get the donor to commit to recurring giving. The second hurdle is providing them with an experience with ongoing value that they continue to give.
The most important metric in subscription fundraising is long-term value. I’ve discussed this at length previously, but because of this reality, consumer subscriptions know that the race is just beginning when they get a new subscriber. It’s a marathon, not a sprint.
As we design subscription giving products, a concept I find helpful from the world of marketing and product development is called the “Four Ps” of marketing. Let’s look at that next.
The Four Ps of Subscription Giving
In the world of marketing and product development, the concept of the “Four Ps” has been around for decades.
I first learned about the Four Ps as a Marketing major in the School of Business in college. Introduced in the 1950s by Neil Borden, an advertising professor at Harvard, Borden popularized the idea of the marketing mix, which would later be known primarily as the four Ps:
Product
Price
Place (Distribution)
Promotion
Far too often, marketing is confused with the last “P” – promotion, which is to promote your product. True marketing goes far beyond putting out the word about a product via advertising, public relations, or communications. Marketing also includes shaping and bringing the right product to market, with the right pricing strategy, and distributing it in the right places to maximize exposure and, ultimately, sales.
Let’s finish this week’s report by looking at each “P” and how it translates to monthly subscription giving.
Product
Creating a marketing campaign starts with an understanding of the product itself. Who needs it, and why? What does it do that no competitor’s product can do? Perhaps it’s a new thing altogether and is so compelling in its design or function that consumers will have to have it when they see it. (Investopedia)
✅ Consider: What does your monthly giving program do, for donors and for beneficiaries? What kind of value can it offer to donors? What are the benefits, intangible or otherwise? Does it make sense why it needs to be ongoing, and will it hold donors’ imagination?
Price
Price is the amount that consumers will be willing to pay for a product. Marketers must link the price to the product’s real and perceived value while also considering supply costs, seasonal discounts, competitors’ prices, and retail markup. (Investopedia)
✅ Consider: How is the recurring giving program priced? Is it based on a “fixed” per unit price based on impact, like $38 sponsors a child or $40 provides clean water? Is there a minimum ask amount to participate? What are the incentives (things like matching donations or premiums)? Are there different levels of giving that constitute different amounts of value?
In addition, if a nonprofit sells tangible goods or services, discounts can be a great thing. While most nonprofits may not have traditional pricing tools like discounts, other price incentives like matching gifts or donated goods multipliers exist. All of these things contribute to increasing the value of the giving commitment to donors.
Place
Place is the consideration of where the product should be available—in brick-and-mortar stores and online—and how it will be displayed. (Investopedia)
Another word for Place in product marketing is Distribution. As in, how do you get your product where your customers are? For a consumer product, that might mean buying premium placement on physical store shelves or in the checkout line.
✅ Consider: Where are you putting your subscription giving product in front of potential donors and current single-gift donors? Is it front and center on your website? Featured at events? Included in single-gift donor and volunteer onboarding? During tours of your programs? In receipt packages? In partners with corporate partnerships? And so on.
Promotion
The goal of promotion is to communicate to consumers that they need this product and that it is priced appropriately. Promotion encompasses advertising, public relations, and the overall media strategy for introducing a product. (Investopedia)
The last and most commonly thought-of area where consumer subscription marketing and donor subscription giving marketing align is communications, advertising, media, and public relations.
✅ Consider: How do you communicate subscription giving to potential and existing donors? Consider your paid advertising efforts in social, digital, and search. Consider organic efforts such as content marketing, SEO, organic social, and PR. Consider offline channels such as phone, face-to-face, and direct mail.
💡 Takeaway: In the era of Subscription Philanthropy, cultivating a healthy, thriving, recurring subscription-giving program requires going beyond simple offer/ask amount fundraising tactics. A strong subscription giving program should consider the giving product itself, the rationale for pricing, strategy for placement and distribution, and promoting the program, both in paid and organic channels.
Until next week… Surfs Up! 🌊
- Dave
About the Author | Dave Raley
Consultant, speaker, and writer Dave Raley is the founder of Imago Consulting, a firm that helps non-profits and businesses create profitable growth through sustainable innovation. He’s the author of a weekly trendspotting report called The Wave Report, and the co-founder of the Purpose & Profit Podcast — a show about the ideas at the intersection of nonprofit causes and for-profit brands.
Want to receive insights like this weekly?
Every Friday, we send out The Wave Report, highlighting one trend or insight “wave,” from donor and consumer trends to innovation in different industries or new models for growth.
Subscribe today to receive free weekly insights in your inbox here: