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Direct Mail in a Digital World

Resource Center - Foundation

By Jonathon Grapsas

(June 8, 2010) It's easy to get caught up in the digital hype. We're now used to hearing terms like click through's and impressions as frequently as response rates and average gifts.

Surely there's enough data now to finally forego four page letters and move across completely to the online space. Perhaps it's time to acknowledge the direct mail doomsayers are right after all.

Not so quickly.

At Pareto Fundraising we spend a lot of time looking at data. We spend much of that time looking at benchmarking data, in other words how charities stack up against each other. And specifically, understanding where growth is coming from in the sector. In recent times we've done this in Canada, Australia and New Zealand, and also have data from the U.K. and South East Asia.

One of the things we've witnessed in recent times is the emergence of new technologies. No surprises there. Simultaneously we've witnessed offline (direct mail) media plateau. That doesn't however sound the death knell for the mail.

Let me explain.

1.  Still a large chunk of the pie. Despite a drop in income in Canada in 2009, cash income from direct mail still accounts for 60 percent of all onetime cash gifts and 20 percent of all income from individuals. Hardly pocket change. We know this to be true in all developed fundraising markets. Onetime cash gifts and the mail may not be growing, but they still account for a large slice of revenue for most charities.

(Editor's note: In the United States, direct mail consistently remains one of the most important and successful types of fundraising as shown by AFP's State of Fundraising Survey through the years.)

2.  Delivering long term valuable monthly donors. Regular, monthly gifts have transformed the fundraising landscape around the world. Monthly gifts (taken from a donor's credit card or bank account automatically every month) continue to play a bigger role, growing 9 percent in income delivered to those Canadian charities whose data we studied in 2009. The average value of a mail-recruited monthly donor is currently around $500-$600 net value after three years. If you can get ‘em they really are your best friends.

3.  Getting close to your donors. Direct mail is the most effective way to get people, on a large scale, to open themselves up and tell you lots about themselves and their motivations. I'm talking about finding out uncovering the real reason your supporters first supported you, what they think about your work, what makes them tick and what turns them on (and off). These are the nuggets of information that you need to be regularly searching for.

Surveys done to offline donors are around 10 times as effective as other channels. And we know, finding those emotional trigger points positively impacts retention, hence long term value.

4.  Working with other channels. Some of the best digital campaigns I've seen have been driven by lessons learned offline. In fact the most successful online activity I've seen was a survey acquisition project which recruited over 500 monthly givers in one campaign, which was aided by insights about what had worked in the offline world.

Online (and other channels) can also drive direct marketing. A great example of this is the advent of search engine marketing and in particularly Google AdWords. Using online lessons around what people are looking for and responding to can help shape what you do in other media. See earlier post on tips for charities here.

5.  Fueling bequests. The mail plays an enormous role here. Not only in finding the right people that are prepared to 'put their hand up' (usually older, longer on file and more loyal supporters) but equally in the actual prospecting and conversion process. We've got clients that now have 6 percent of their active cash file that have said "I have left you in my will," primarily driven by their mail program both in terms of identifying people to ask to and as a vehicle to do the asking and cultivation. The value of the mail within your bequest programs should be taken into account when weighing up the respective role of various media. Don't lose sight of this.

Remember, the title of the piece was direct mail in a digital world. The most successful programs right now are those that ensure a connection between all channels--that talk to each other. A successful program means finding the best ways to reach out to people.

Jonathon Grapsas is the regional director for Pareto Fundraising in North America. He has been involved in the shaping and development of many large and growing fundraising programs around the globe with organizations in the U.K., his native Australia and more recently in North America.

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