By Carl Sylvestre and Kimberly Reeve
In this age of social media, many organizations are considering whether or not they need to continue or launch direct mail campaigns. While direct mail may seem like an old-school form of fundraising, it can often be an integral part of a comprehensive fundraising program. In this article, we provide an overview of direct mail trends and highlight ways that you can optimize this fundraising tool in your organization.
Is Direct Mail Dead?
“Maybe we should do a direct mail.” “Does anyone do direct mail anymore?”
This conversation eventually comes up at some time within an organization when it comes to building a fundraising plan. While it may not be the oldest fundraising tool, changes in technology and customer’s buying habits make it seem as though it is from the old school. However, for the right organization, the benefits of undertaking a direct mail campaign can be one of the best investments to grow its database and build the foundation for a solid individual giving program.
Organizations tend to focus on the low response rates of direct mail, which are often between 1 – 3%, depending on the organization and its database. However, a 2012 eNonprofit Benchmark study indicated that the response rate to fundraising emails is 0.08%. That suddenly makes a 1% response rate look terrific! In fact, direct mail donors contribute more over their donor lifetime with an organization than email donors. A 2013 Blackbaud Charitable Giving Report indicated that while it is growing, email giving only accounts for 6.4% of all charitable giving in the United States. This means many are still donating through the more traditional channels of direct mail, special events and in-person.
What is Direct mail?
In short, direct mail is a form of direct marketing targeting a specific segment of the population to respond to an appeal for financial support. A direct mail campaign is not limited to putting an appeal in the mail. An e-mail campaign, telemarketing, direct response print advertising or catalogue sales often supports the mail component. It varies in size or scope but it remains the most effective tool for getting donors to support your cause.
To take full advantage of a direct mail strategy, it is important for an organization to understand that it is an art and a science. For a campaign to work it means continual review of the creative messaging and evaluating hard returns. Being ‘direct’ has the harsh price of honesty. When a campaign is working the results are there to celebrate and when it is not working it can be devastating. Yet it in spite of these immediate returns, the success of a direct mail campaign can only be truly measured in years rather than months. That is why it is important for any organization contemplating the pros and cons of investing in a direct mail campaign to consider short-term resources and long-term gains. Direct mail can be a marathon undertaking, and it will take an investment of time and financial resources in order to see effects. However, data from research including the 2013 Blackbaud Charitable Giving Report indicate that integrated campaigns that include direct mail in addition to email and other social media campaigns always out-perform stand-alone email or social media campaigns.
Short-Term Resources
A direct mail campaign is an investment in the organization’s future. As an example, a membership organization has decided to double the size of its membership and has identified a group of supporters whose profile mirrors its current base. It is developing a direct mail campaign with targeted message designed to entice these prospects to become members. However, just because it has identified these prospects doesn’t mean they will automatically respond. In fact, the odds are that for every 100 people targeted, one will join — no matter how exciting the offer. If the organization is looking to add 200 new members, it needs a potential mailing universe of about 20,000 people. It is important to know the facts about response rates and return on investment so that you can accurately build budgets and also set expectations for results.
While some organizations feel that everyone embraces their cause, most organizations will want to try to target their direct mail initiatives to current and potential donors that most closely align with the average donor to their organization. An organization can create a donor profile of their average contributor by studying lifestyles and giving patterns, reviewing census data, and comparing the organization to other similar organizations. From there, the organization can develop general guidelines such as whether specific age groups or men vs. women are more likely to donate and can select an audience of similarly-profiled individuals to target. To reach the targeted group, the organization can rent lists, partner with organizations similar in mission, or develop their own database.
From there, the organization needs to design the direct mail package, determine the internal components that need to be monitored and ensure that a solid system is in place to receive responses and promptly receipt donors. Although nonprofit organizations are notorious for having volunteers and staff print and stuff envelopes to save expenses, we encourage organizations to benefit from the experience of professionals. Nonprofits often under-estimate the amount of work involved in a direct mail campaign. Working with a direct mail consultant or mail house can often increase the capacity of an organization to create and cost-effectively direct mail appeals.
Long-Term Gains
The main goal of a direct mail campaign is to get as many people as possible to interact with the organization by making a donation. Whether your organization is located in a large city or a small town, you will have competition from dozens to hundreds of other organizations, many of whom will have similar missions. Direct mail is a good way to increase your organization’s database, as it can be used to introduce the organization to a wider range of people.
It is important to remember that direct mail is a process, and the direct mail campaign does not end when the first gifts arrive. Once a donor has engaged with an organization by making a first-time gift, the next step is to cultivate that individual to make additional gifts and over time increase their giving to the organization. The initial gift gives the organization the opportunity to educate that donor why his/her gifts matter. Not everyone making an initial gift will continue giving to the organization, but the odds of getting an additional gift increases exponentially from one in 100 prospects to 50 in 100 donors. With subsequent years, the odds keep getting better and the average gift may increase from $50 to $100 in a very short period of time. This happens because the organization has successfully targeted a group of strangers and with the strategic deployment of resources built a group of long-term supporters.
A Transformational Tool
A winning formula for direct mail campaigns is to start with a knowledge of donor profiles and then create a creatively executed initiative. Also remember that direct mail is a way to obtain information from your donors and prospects on what they view as valuable and what they do not. Carefully track the results of your direct mail appeals, including average gift, response rates and total number of donors, and take time to analyze what types of letters, response vehicles and design styles work better than others.
Finally, remember that direct mail is a long-term, on-going process. An acquisition campaign begins when a new group of people states that they are interested in your organization by making a donation. Those who renew with an additional gift acknowledge that they support the efforts, and those who increase their gifts signal that they could be engaged in additional ways. As the organization builds its database, more and more donors will be acting as ambassadors for the organization and raising the profile of the organization. This results in the increased donations, which helps the organization grow and continue to reach out to new donors. The direct mail campaign is a marathon, but it is a transformational tool that can generate long-term, sustainable support for your organization.