When it comes to innovation in the crowdfunding field, charities should take a leaf out of premium catalogues, says Helena Rosebery.
Chuffed, a global crowdfunding platform for social causes, launched its first-ever online catalogue for the season of buying and giving in December 2016. The Christmas catalogue showcased a curated pick of gifts and experiences that were connected to live crowdfunding campaigns on the platform, each raising funds and awareness for their particular causes.
While charity Christmas gifts aren’t a new idea, Chuffed took the approach of only selling premium products and experiences that met the bar of being better than commercial gifts.
“Our belief is that if our sector can create scalable products and experiences that can rival the commercial market we could move the market into accidentally buying social good products – because they’re the better product – with all the money going back into the community,” says Chuffed CEO and Founder, Prashan Paramanathan.
To guarantee the quality of each Christmas perk, Chuffed only selected a limited number of gifts available on the platform and mentored each of the campaigners. “This was our first go,” reflects Paramanathan, “and it took a greater amount of effort and guidance than what we’d initially expected.”
Gifts from the catalogue ranged from a $500 print by an Oscar-winning artist to a $50 personalised song by an improvisational theatre group. In total, 387 gifts were sold to 203 unique donors in a two-week period.
Chuffed also organised the Telstra Foundation to match fund the first $10,000 in purchases. It was an opportunity for a corporate foundation to leverage its funding – and proved to be an effective tool in kickstarting the campaign.
From the campaign, Chuffed learned three critical lessons about what’s required to create a successful premium charity product.
Case study: Two Good’s Organic Ginger and Lemon Drop Tea in collaboration with Ovvio
One brand that understands better than most how to sell premium social good products is Two Good, an Australian social enterprise selling high-end food and care products, and donating those same products to a women’s refuge. “Two Good has a large social component,” states Co-founder Rob Caslick, “but it’s equally as important to have a great product. Sure, it’s not hard to run a campaign where individuals make a one-off perk purchase, but the real challenge to make the business successful is making sure they re-engage with the brand, and to do this you need a product that rivals what they can get on the commercial market.”
For the Chuffed Christmas catalogue, Caslick sold Ovvio Organic Ginger and Lemon Drop Tea, promoting it as: A custom made blend of premium Ovvio Organic Ginger and Lemon Drop Tea posted to you anywhere in Australia. For each tin you buy, we will also donate the same tin of tea to a woman in a domestic violence refuge. Enjoy a delicious pick-me-up tea knowing you are also providing extra warmth and love to a woman in a refuge this Christmas.
Lesson 1: Not too high, not too low, just right
Two Good’s ‘you eat one, we treat one’ social model runs throughout the business but it is only through trial and error that Caslick is refining this model’s viability. In 2015, he sold Two Good Puds – Neil Perry designed Christmas puddings – but did not factor in adequate profit margins in selling each pudding at $30. This meant that, despite selling more than $11,000 worth of puddings, very little of that ended up in Two Good’s bottom line.
When he launched Two Good Tea in the Chuffed Christmas catalogue, so he did not make the same mistake he negotiated the supplier down. Caslick also factored the matched funding that Chuffed had arranged from the Telstra Foundation into his margins, to further lower the price.
In spite of this, at $34 a pop, the product was relatively more expensive than other organic teas of the same 80g volume – remember he had to buy two teas for every purchase as one was given away. “It was as low as we could go to still keep it viable,” he reflects, “but I admit it was a barrier for some customers. Perhaps next time we would cut out the collaborative aspect and do it all in-house so we could offer a price point that is competitive to other tea brands.”
Whether you are selling a product or a service, you need to ensure that it has a competitive price point and takes business margins into account. When you sell a general interest gift like Two Good’s tea or Just Breathe’s bar of chocolate, which was included in Just Breathe’s Christmas with the in-laws survival kit, it’s inevitable that customers will make price comparisons between something available in the supermarket and your product. To be able to charge a premium price, product quality matters.
Lesson 2: It starts on the web page and ends with the unwrapping
Price is not the only thing you have to compete with. It’s all about giving the best gift and that includes the entire shopping experience, and offering, if not the same, a similar experience as top-end retailers. Think about your own online shopping experiences. Would a dull, barely styled image make you click?
For Chuffed’s Christmas catalogue, the campaigns with better imagery sold more products. Great imagery is non-negotiable, and it needs to be of the product, not the beneficiary of the project. For Two Good Tea, Carlick had a professional photographer take photos of the product so it looked as good as any tea in a high-end retailer’s catalogue.
Presents purchased. Tick. But that’s not the end of the story. Timely delivery is a critical part of a smooth experience that instils or strips away trust in the buyer of your brand. Chuffed learned this the hard way, factoring in 10 days for delivery and allowing campaigners to liaise directly with customers.
While most gifts arrived in plenty of time, a couple of gifts arrived on Christmas Eve – a stressful experience for customers who didn’t know if they needed to get another present for that loved one. Chuffed knew that if it were to do it again, it would have to take more control over this aspect of the experience.
Next, the present is unwrapped to reveal… the packaging, another chance for your organisation to tastefully express its brand and values. Two Good’s tea came in a stylish black and white tin that highlighted the product rather than the logo. When it comes to packaging or the product itself, put yourself in the recipients’ shoes – would you want a piece of merchandise brandishing a big logo or a product that can sit on the countertop to be proudly displayed because of a values alignment, rather than being shoved into the back of a cupboard and forgotten?
Lesson 3: Experiences are priceless
In November last year, Airbnb launched a new offering alongside its house-sharing service: experiences. The organisation’s users had a desire to immerse themselves in the places they visited, and experiences curated as a service by locals was Airbnb’s answer.
When charities and community groups sit down to think about perks, they usually think about physical gifts. Services and experiences are more often than not overlooked because they are deemed to be mundane. If you take a step back, however, and appreciate the unique skill set and experience in your team and organisation, there’s a lot to offer and creatively package up.
While Two Good offered a product, several items in the Chuffed catalogue were experiences. The great thing about experiences is that there’s very little to compare them to in the commercial market, so the pricing can be flexible – up to what customers are prepared to pay.
What price tag would you give to a two-hour cuddle session with Hunter Animal Rescue’s cats and dogs: $25 or $250? It ended up charging $50. How about a personalised song created for you in support of Lifeline – improvised, filmed and posted on YouTube? Camp Radicool thought well-and-truly outside of the box to create an experience for social good that cost $50.
Big World Communities, on the other hand, offered two nights in the world’s first flat-packed house for $250. Experiences allow donors to interact with a brand, thereby facilitating a better understanding of the cause. There isn’t a set price tag for this.
Real value exchange
These three words encapsulate what Chuffed learned from its first foray into the Christmas market: real value exchange. “Cute charity gifts aren’t going to change the economy,” states Paramanathan. “It will take products and experiences that offer real value to the buyer.”
To do this, Chuffed set the bar high to ensure all of the products in the catalogue were premium. That meant rejecting dozens of suggestions from campaigners. It feels harsh, but it’s what’s necessary to hit the right quality level. The key question to ask is: If you strip away the charity story, is it still a great gift?
Paramanathan asserts, “There is real value buried in our sector and we should be tapping into it. Instead of copying other charities and putting our logo on products, we should be thinking about what experience or gift we could uniquely offer that’s better than anything – charity or commercial – out there.”
The results from the Christmas catalogue include:
• 387 gifts sold to 203 unique donors (average of 1.9 gifts per donor)
• most popular gifts were Two Good tea, two-hour cuddles with a rescue dog or cat and a three-pack of handmade vegan lip balms
• average spend per gift was $56
• general interest gifts sold better at a lower value, for example a cookbook or chocolate bar
• special interest gifts like an artwork or overnight stay in a flat-pack home sold better at a higher value
• the cheapest gift was a Christmas with the in-laws survival kit, priced at $12
• the most expensive gift was a limited-edition Shaun Tan artwork supporting free literacy programs for young writers in Melbourne’s inner-west at $500
• the product price range was from $12 to $500
• the experience price range was from $50 to $250.
Helena is Customer Advocate with Chuffed. She has had her feet firmly planted in the nonprofit world for more than five years. She believes in the power of offline interactions to foster online connections, and takes pleasure in weaving together real stories that inspire movements for social good.