Warmth and competence as drivers of alumni loyalty and giving in higher education

© Copyright Fidelum Partners 2013. All Rights Reserved© Copyright Fidelum Partners 2013. All Rights Reserved

Date: September 27, 2013

How Warmth & Competence Drive Alumni Loyalty and Annual Giving

Chris Malone, Managing Partner Jamie Ressler, Associate Dean

© Copyright Fidelum Partners 2013. All Rights Reserved

Clues From Evolutionary Social Psychology

Basic Survival Questions:

1. Your intentions toward me? (i.e. friend or foe, WARMTH)

2. Ability to carry out intentions?(strong or weak, COMPETENCE)

Our Warmth & Competence Instincts


Warmth & Competence Guide Loyalty & Relationships

These universal dimensions of human social perception have been shown to explain over 80% of social behavior through academic research in 37 countries.

Source: Universal dimensions of social cognition: warmth and competence, Susan T. Fiske, Amy J.C. Cuddy and Peter Glick, TRENDS in Cognitive Sciences Vol.11 No.2, 2007

Perceptions of Others Low Competence High Competence

High Warmth Sympathy & Indifference

Admiration & Attraction

Low Warmth Contempt& Rejection

Envy & Grudging Cooperation

http://www.relationalcapitalgroup.com/wp-content/uploads/2010/03/Warmth-Competence-2007.pdf


Warmth & Competence Drive Brand Relationships

Ten studies with over 5,000 consumers on over 45 brands confirm heavy influence on brand loyalty & purchase intent.

A detailed review and several commentaries were published in the Journal of Consumer Psychology in April 2012.


What About Higher Education Brands?


Are They Perceived Like People & Social Groups?

These fundamental dimensions of human perception were used to assess and analyze alumni relationships with a medium-sized higher education brand.

White paper: http://www.relationalcapitalgroup.com/resources/white-papers/a-better-way-to-measure-value-business-relationships/

Is honest and trustworthy

Acts with your best interests in mind

Listens well & is responsive to your needs

Resolves differences fairly & respectfully

Communicates clearly and effectively

Reflects well on your reputation

Has valuable knowledge and expertise

Consistently delivers on commitments

Offers high quality advice & assistance

Helps you accomplish your goals

Is best in their field of expertise

Is worthy of your time and resources

Warmth Dimensions Competence Dimensions

http://www.relationalcapitalgroup.com/resources/white-papers/a-better-way-to-measure-value-business-relationships/


Warmth & Competence Drive Overall Loyalty

These warmth and competence perceptions were highly predictive of overall loyalty, explaining over half of alumni relationship strength.

In addition, “worthy of your donations” was among the strongest predictors of overall University relationship strength and loyalty.


Loyalty Segmentation of University Alumni

Our cluster analysis loyalty segmentation allowed us to identify five groups of alumni, each with distinct attitudes and behaviors toward this university.

Angry Isolated Critics

13%

Underserved & Alienated Boomers

15%

Proud But Disconnected Donors

19%

Financially Frustrated Fans

25%

Satisfied Super Supporter

29%


Warmth & Competence Perceptions Vary by Segment

These basic dimensions of social perception provide a brand relationship diagnosis for each loyalty segment of university alumni.

Given your recent experience as an alumnus/a, please indicate the degree to which the following statements describe this university now, on a 1 to 7 scale. (Mean Score)

All Alumni SSS FFF PBDD UAB AIC

reflects well on your reputation 5.3 6.1 5.3 5.6 4.0 4.5

is honest and trustworthy 5.3 6.0 5.2 5.6 4.2 4.5

communicates clearly and effectively 4.9 5.6 4.8 5.2 3.8 4.0

has valuable knowledge and resources 4.7 5.5 4.7 5.0 3.7 3.9

is worthy of your charitable donations 4.6 5.7 4.4 5.1 3.4 3.6

is the best in their field of expertise 4.6 5.3 4.5 4.8 3.5 3.8

consistently and reliably delivers on commitments 4.5 5.5 4.5 4.8 3.3 3.6

resolves differences fairly and respectfully 4.3 5.1 4.3 4.5 3.2 3.5

always acts with your best interests in mind 4.2 5.1 4.2 4.4 3.0 3.2

listens well and is responsive to your needs 4.1 5.0 4.0 4.2 3.0 3.0

offers high quality advice and assistance 4.0 4.9 4.0 4.2 3.0 3.0

helps you accomplish your goals 3.7 4.7 3.7 3.8 2.6 2.6

SSS FFF PBDD UAB AIC


Alumni Loyalty Varies Greatly by Attitudinal Segment

Not surprisingly, these perceptions are highly predictive of overall alumni loyalty.

Please indicate how strong and loyal a relationship you currently feel toward each the following on a scale from one to seven: (Mean Scores)

All Alumni SSS FFF PBDD UAB AIC

The University overall 5.2 6.4 5.3 5.6 3.4 3.7

Classmates from your graduating class 4.6 5.8 5.5 3.8 3.0 2.9

Athletic teams 4.5 5.4 4.6 4.7 2.8 3.7

Roman Catholic Church 4.1 4.7 4.2 4.3 3.2 3.7

Classmates from your major 3.7 4.6 4.2 3.4 2.5 2.5

Classmates from other social groups 3.5 4.6 4.2 2.9 2.2 2.2

Faculty members 3.3 4.3 3.5 3.3 2.3 2.2

Current students 3.1 4.2 3.1 3.2 1.9 2.1

Alumni Outreach & Development staff 2.9 3.8 2.7 3.1 1.8 1.9

Alumni you've met through University events 2.8 3.8 3.0 2.8 1.8 1.8

SSS FFF PBDD UAB AIC


Loyalty Also Drives Annual Alumni Giving

Clearly alumni must have both the means and desire to provide financial support, but relationships and loyalty outweigh wealth in actual giving behavior.

$333

$269$511

5.26.4

5.3 3.4

3.75.6

$118

$118

$112

SSS (29%)

FFF (25%)

PBDD (19%)

UAB (15%)

AIC (13%)

ALL (100%)


Twenty Years of Total Alumni Giving Explained

While a variety of financial and life stage variables impact total alumni giving, it’s clear that alumni attitudes, relationships and perceptions play a major role.

Nearly half of total giving behavior (49%) can be explained by just these attitudinal variables alone.


Structural Equation Model for Average Annual Gift

At this university, improving perceived warmth and competence among alumni will have a 27-41% pass-through impact on overall loyalty to the institution.

Similarly, for every 1 point increase in overall loyalty, average annual gift size increases by $61.27 for every alum at this institution.

● P-values on all relationships < .001● RW = Regression Weight: for each 1-point change in upstream variable, observe .xx change in downstream variable● Perceptions and loyalty were rated on a 7 point scale

Alumni Competence Perceptions

Alumni Warmth Perceptions

Loyalty to University

Annual Gift Average

27% Impact

41% Impact

23% Increase, +$61.27

5.2

4.4

4.7


Research Implications & Value

Warmth and competence, well-established concepts in social psychology, are also relevant in consumer brand relationships

Improving perceptions of warmth and competence will improve alumni loyalty

Stronger alumni loyalty increases the size of alumni contributions


Research Implications & Value

Warmth features that universities should ensure/improve:● is honest and trustworthy● acts with alumni interests in mind● resolves differences with alumni in a fair manner● listens and responds● communicates with alumni● provides status to the alumni’s personal reputation

Competence features that universities should ensure/improve:● deliver on commitments● provide valuable knowledge and resources● is worthy of contributions● offers quality advice● enables alumni to reach their personal goals● have competent experts in the fields of study.


More Research, Case Studies and Findings…

"The HUMAN Brand is a brilliant synthesis of psychological science and marketing wisdom. Engaging, insightful, and deeply original, an essential book for every business reader." - Dan Gilbert, Edgar Pierce Professor of Psychology at Harvard University

“Susan Fiske’s renowned work on warmth and competence explains how we unconsciously judge people and companies. The HUMAN Brand is a must-read for anyone with an interest why we make the choices we do.” - Jennifer Aaker, General Atlantic Professor of Marketing at Stanford University GSB

“The HUMAN Brand is a must read for those who want a truly evolved understanding of how to earn loyalty and create lasting relationships with customers. It's a timely look at how modern corporations hold onto customers... and how we drive them away.” - Beth Comstock, Chief Marketing Officer, General Electric

● 1st chapter free at TheHUMANBrand.com● eBook available online now● Hardcover: October 14, 2013

Warmth and competence as drivers of alumni loyalty and giving in higher education

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