I recently attended a seminar with the fascinating Seth Godin and heard an interesting anecdote about VisionSpring:
I could see that every single person who came to this meeting had enough money [$3] … to buy a pair of new reading glasses. And I could tell from how old they were that they were qualified and I knew what they did for a living so I knew that this would pay for itself in two weeks, three weeks, certainly in 20 years it’s going have a huge return on investment. So they get the demonstration, they take the eye test, they see that they need glasses, they take the sample glasses off, they walk over to the table where there are 8 kinds of glasses to choose from … all carefully wrapped in plastic … and 40% of the people bought a pair of glasses. 60% of the people left. And I’ve thought about this about a million times … If they knew how great the glasses would be, if they could overcome the momentum they had and the desire to keep the money … there’s no question they would have bought a pair of glasses. Maybe for $6 or $9 or $12, they could afford it, they needed it, they were in the right place at the right time, and yet the transfer didn’t occur.
To Mr. Godin, it seemed obvious that the customers should be buying glasses, and that they were being held back by “momentum.” He proposed a change:
Instead of giving the person the eye test, taking off the glasses and having them go over … and now make the decision do you care enough about yourself to buy those, instead, give the guy the eye test, and say those are your glasses, you owe me $3. Now the person has to make a new decision, which is better, giving up the $3 and keeping on what I have or going to the trouble of taking them off and reminding myself that I don’t deserve to see? And when you do that it turns out that the close rate goes up 30%.
To be sure, it sounds like an impressive improvement for a simple change. And yet a 30% improvement on a 40% close rate still leaves about half the people not spending the glasses – now under circumstances that arguably make it pretty difficult to turn them down.
Is it possible that Mr. Godin – and the charity he was observing – have simply overestimated the demand for what they’re doing? Underestimated the extent to which imperfect substitutes may be available? It appears that Village Phone did exactly this in at least one case.
It’s easy to be sure that your product is great and that it’s needed. Yet if you’re wrong, and you have donors subsidize it, you may essentially be giving out cash in a less efficient, less empowering way.
Mr. Godin analogized the situation to fundraising:
You’re sitting in class and the person next to you … is coughing … and you take out a container of Fisherman’s Friend menthol lozenges and you offer it to her and she puts it in her mouth and the coughing goes away and everyone is happy … and yet you’ve been on those calls to raise money from a donor, who apparently has money to donate … and you hand them the equivalent of a Fisherman’s Friend, “look at this program, we’ve been working really hard on it, it’s really important, we need your money” and they say “I need to get back to you” and you know what that means …
To me, there’s a major problem with the assumption that a charity’s program is at effective at solving complex social problems as a Fisherman’s Friend is at soothing throats.
Confidence in your product is great, but it can be misplaced. When charities let assumptions like “Everyone here needs glasses” and “Our program is reliable as a cough drop” go unexamined, they’re going to be left scratching their heads at results-oriented donors.
Comments
Wow,my respect for Godin fell even more than I thought was possible.
Gee, Seth, I’m so glad you’re recommending charities use incredibly coercive and manipulative sales techniques on the very poor.
If anyone selling anything treated me the way he advised I would walk out immediately, tell all my friends and strangers to avoid the company like the plague and file a complaint with the state Attorney General’s office.
Unfortunately the last is not an option for the poor apparently now being subjected to this despicable approach.
Tim, this strikes me as an overreaction. The sales technique does strike me as manipulative, but not coercive (after all, ~50% still walked away).
I’m a little confused, why do you consider improving the vision of 50% of the people who walk in so negligible?
A 50% close rate doesn’t indicate low impact, but it does contrast with the story being told that “everyone present needed glasses” and that a 40% close rate was inexplicably low. Especially when the 50% close rate is for an arguably high-pressure sales technique.
How big was the impact, in actuality? It might be true (as Mr. Godin implies) that each pair sold equated to a permanent and profound life change, and that the 50% who didn’t buy were making the wrong decision. It might be true that the one-size-fits-all glasses were not highly beneficial (either in terms of eyesight improved or the implications of that eyesight improvement), and that the 50% who bought them were making a poor decision under pressure. It might be true that VisionSpring’s program was not the only source of glasses, and that many of those who bought them were hoping to re-sell and thus take advantage of donor subsidies. We don’t have enough information to know.
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