We can all agree that the goal of any successful fundraising effort is to make a meaningful connection with the prospective donor, and elicit a positive response….and donation! The means by which we make that connection, and attempt to create a “golden thread” between the fundraiser and the prospective donor is the basis for much debate.
Many pundits claim that email is a viable, cost-effective and efficient successor to the traditional medium of direct mail. As you know from your own experience, not everyone agrees with that assertion. Some—myself included—argue in favor of the use of direct mail as the primary medium, and believe we should lower our expectations for email as a universal panacea. Email has a role, an important role, especially in donor relations and communications, but I believe it has a lesser role as a substitute for, or successor to direct mail, especially in new donor acquisition.
When we create a campaign to raise funds from individuals, we must make a statement of need, express that need creatively and establish a close and personal connection with the target. Then, and only then is it possible for the campaign to generate donations from existing donors, and create new donors. In my opinion, having worked on both email and postal campaigns, and having seen the results and the costs, and observed the results over time, email is suitable for certain donor-related functions and communications, but is unsuitable as a primary prospecting fundraising medium. Why is that?
I think the answer lies in the distinct difference between the two media—emails are electronic, device-based, tend to be short and tend to not tell a story very well. Emails also tend to have a very short “shelf life”, unlike direct mail. Direct mail can be, and usually is very creative with compelling graphics, photography and copy that combine to elicit the desired donation, time and time again and not just once. Our most successful fundraisers regularly and routinely create and deliver brilliant Creative and marry that Creative to smart, data-based list selections that together combine to produce a successful result.
Email is different, isn’t it? Email tends to imposes itself upon us, is rarely seen by invitation and based on my experience looking at my in-tray each morning and throughout the day, email is mostly unwelcome because it is not a targeted medium, as we know it.
And so I think we have a disconnect between what email is designed to do, and do well, and what we are attempting to force email to be—a marketing medium. Email should be used to communicate with existing donors, should be used to tell the organization’s stories and update the donor community. No question that is a successful and appropriate use of the medium. But email falls short when it is compared with direct mail as a value-laden, effective means by which new donors are identified and converted, created and maintained. For some reason or reasons email-sourced donors are less valuable than postal, mailing list-sourced donors. Postal-sourced donors tend to cost more to develop and tend to require more effort and investment to maintain but postal-sourced donors have something extra that no other donors possess—a significant lifetime value.
Lifetime value differentiates postal-sourced donors from all other donors. This is where we need to be focusing our analyses and efforts—on value, not merely cost or response rates. Value and values are, interestingly enough, what faith-based fundraisers organize around, and whether we are talking about financial metrics or ethical standards, values are of paramount importance.
Our organizations are based, quite literally, on the power of the written and spoken work, the words of the Gospels and of the Apostles. Our fundraising communications reflect that respect for the written word, and imagery and the telling of stories. Our supporters are cut from that same cloth, and when they are asked in a creative and respectful manner—usually via direct mail—to express their support financially, they respond. Email does not present itself in this manner.
Successful fundraisers use direct mail very effectively for new-donor acquisition, lapsed-donor reactivation, “ask migration and upsell” mailings, special-program mailings, emergency-ask mailings and regular, program maintenance mailings to active donors. Successful fundraisers are successful because they plan, they strategize, they encode their offers and they measure their results. Most successful fundraisers have some donors who are tagged as being “email responsive” on their active files, but the percentages are very small.
A sound strategy that all fundraisers should adopt is to segment and code donors based not only on traditional “R/F/M” characteristics, and offer codes, but also channel. You should know your donors by how they respond and to what they respond, and as you can imagine, there are many categories that can be created to accommodate these characteristics. Yes, some donors come in through email, having found you and made an online donation to you, and no matter how often you mail to them, they will always respond by clicking, not mailing or faxing or calling. But note that the “pure email” donors are relatively few and far between. More prevalent are direct mail donors that receive your mail piece and go to the web to donate. Time and time again they will give through the web, but only when they receive your direct mail piece.
You can see this by asking your List Broker for all the datacards covering all the lists you now use. Look at them carefully, and notice how few email records there are (and how few fundraisers will allow you to email their donors!) Yes, most fundraisers no doubt have email records for their donors, but few will http://nygoodhealth.com permit a third party to use them, and fewer still report the incidence of email records on their donor files.
The vast majority of all donors and subscribers are created by direct mail, maintained by direct mail and in the case of lapsed donors and lapsed subscribers, reactivated by a successful marriage of targeted, purpose-driven Creative and sophisticated data manipulation techniques. The stories being told by the successful fundraisers are stories that lend themselves to direct mail, to a tactile, hand-held ink-on-paper representation of a worthy request based on an expressed, urgent need. The story is told on paper and the sense of connection between the fundraiser and the target is made golden by the copy and the Creative, a golden thread that is very difficult for any other medium to emulate.
But there are those who point to the decline in mail volumes over the last 10 years as evidence that direct mail is in decline, and email is ascendant. Yes, stamped mail is in decline as individuals migrate to the internet to pay bills, check with customer service, post updates to social media, etc., versus mailing an envelope. But direct mail is alive and well, and its health will continue to improve for several reasons.
First, direct mail speaks directly to the recipient, by name, at a known address. Our application of ever-more-advanced techniques and technologies makes today’s direct mail more relevant, more targeted and more welcome than ever before. Technology makes possible creating individualized direct mail Creative. Think about that! Each person’s direct mail piece differs based on the targets’ psychographic and demographic characteristics.
Second, direct mail is a welcome guest when it is targeted and relevant; email tends to be an imposition that can be mostly irrelevant and intrusive. Consumers, especially older Americans, tend to be very wary of email and less so with respect to direct mail.
Third, when a fundraiser has a donor, her name and address are known, and we can tailor direct mail offers to her profile, to meet her wishes and aspirations. Direct mailers know exactly what is the correct address for reaching a donor, or prospective donor, and can use some very sophisticated data management techniques that allow for micro-targeting, based on that postal address. Emailers struggle to do that.
Fourth, as successful fundraisers can attest, the value of a donor is measurable, and is based on the donor’s initial cost, initial performance, and performance over time. This metric, the “Lifetime Value” that you see and hear mentioned so often, clearly differentiates an email “name” from a postal name and address. Email donors might cost less but email prospecting results in miniscule response rates—measured in tenths of one percentage point
So should a fundraiser or publisher ignore email and put all the investment eggs in one “direct mail basket”? Actually, no. There is a case to be made for using email within a fundraising program, but in a task-specific manner. A fundraiser might well acknowledge a gift by both email and a thank-you letter, and on an on-going basis, program announcements and emergency needs can be communicated to donors by email. Successful fundraisers use email for donor relations, in conjunction with targeted direct mail.
A second very specific email application that is often used is in the area of reactivating lapsed donors and lapsed subscribers. As we mine data and read reports, we frequently see that a lapsed donor for a fundraiser or a lapsed subscriber is lapsed only with that organization. The donor or subscriber is actually very active with respect to its relationship with other fundraisers or publications. So, how can one reactivate a lapsed individual who was once actively engaged? Creative alone tends to not be as effective as targeted Creative coupled with targeted, manipulated data.
Most fundraisers have lapsed files that are larger—much larger—than their active names/files. Clearly, no organization can afford to mail all of them, and plead with them to “come back”. But….by appending an email address to the names of lapsed individuals (plan on a 25% match rate), you can cost-effectively email a reactivation offer to them. Again, response rates are very low, even though the targets know you, but so too is the cost. Once reactivated, you can then determine what contact strategy works best for the reactivated donors—and for you.
At the end of a marketing audit of your own programs and investments, results and ROI, you will be able to determine what mix of postal and email works best for you. In all likelihood an investment mix of postal-based acquisition and a blend of postal mailings and emailings targeting your house files will work best. Focus on not just costs, but on more complete financial metrics like ROI, Lifetime Value, allowable investment cost per contact, etc.
Fundraisers are different, and you each have your own marketing metrics, but all have one thing in common—the numbers tell the story! The numbers will point you in the “right” direction, and by following the numbers you will avoid the pitfalls and mistakes of equating “lower costs” alone with “success”. Perhaps we should keep in mind what President Harry S. Truman said about counting beans and measuring progress: “An economist”, he said, “knows the cost of everything and the value of nothing.” Our job as professional, faith-based fundraisers is to always seek value in our work, giving honor to our donors and our Charism, all in the context of “doing well by doing good”.
Geoff Batrouney is the Executive Vice President, Chief operating Officer and co-owner of Estee Marketing Group, Inc., a Rye Brook, NY-based list brokerage and list management company serving the Catholic fundraising, publishing and merchandise markets.