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Should You Dive into Direct Mail? Here’s What You Need to Know First

You’ve heard the news: Direct Mail is not dead. In fact, it’s still where much of the action is for fundraisers.

Does that mean your organisation should dive into Direct Mail if you are not already doing it?

Maybe.

I’m going to give you some facts and figures that can help you decide whether or not you should fire up a direct mail program. It can be expensive, difficult, and it takes some time to start paying off. 

To get us started, let me give you what might be a startling figure: 0.6%.

That’s six out of a thousand.

Not much, but it’s a pretty average response rate for “cold” direct mail in well developed direct mail markets (like USA, UK, Australia, NZ, Hong Kong). “Cold’ is mailing to people who have never donated in response to mail, to you, before. That includes bought or rented lists, people who are on your database but never donated, attendees of events and anyone else.

For now, 0.6% is what you’ll get, unless or until you know otherwise. Response often ranges up toward 1% and sometimes even higher.

That 0.6% guess will help us calculate the volume of your direct mail program. Which leads us to the second magic number: 200.

You always need at least 200 responses in any test group to be able to statistically compare.

If you can’t afford to mail enough pieces to get 200 responses then the whole thing is pointless. Don’t do it.

To get 200 responses at 0.6% you need to mail 33,000 packs.

If you want to test two packs against each other (which you should be doing) then you have to mail 66,000 packs.

If you can afford to mail that 66,000, you’re on target — so far.

But there’s one other step.

That 66,000 mailing will hopefully get you around 400 new donors. That’s not enough donors for a sustainable direct mail program. Basically, they won’t donate enough to cover the cost of your time, database, processes etc.

For that, you need to get at least 1,000 new donors within your first 12 months. To get that, you need to mail 165,000 packs in the next year. Our third number.

So if you can’t afford that, or you can’t find that many names to mail, don’t invest in direct mail acquisition.

But if you can, here’s the next level: Knowing if it’s not just numerically successful, but also financially viable.

Which brings us to our fourth number, which is your Return On Investment (ROI) from your direct mail — or how much you got back for every dollar you spent. ROI is not a good measure for warm fundraising activities (it is actually destructive) but very useful for acquisition.

You calculate ROI by dividing the total income your donor acquisition brought in by the total cost of producing and mailing it. That should include all costs, including the cost to print and mail, list costs, and the cost of writing, design, strategy, project management, etc.

ROI can improve three ways:

  1. Your cost is low.
  2. Your response is high.
  3. Your average gift is high.

They’re all important, but you should focus most on #2 and #3. Extreme cost cutting often ends up lowering response, so it’s self-defeating. Control those costs, but really work to increase response and average gift.

Any ROI above 1.0 on a volume of 66,000 (meaning you brought in as much as or more than you spent) is practically a miracle. If you are trying direct mail in a country where it isn’t well established, maybe you have a better chance of a miracle: if you can get hold of a good list.

Rare these days. More likely, you’ll get back less than you spend.

An ROI above 0.65 ROI (65¢ for every dollar you spent) is very good. If you get that, it means you should almost certainly keep doing direct mail, and on a larger scale.

If the ROI is below this your direct mail is probably not viable. The ongoing donors will not likely cover their cost over many years.

Let’s summarize those BIG 4 direct mail acquisition numbers:

  • Response rate: around 0.6% or higher.
  • 200 (or better yet, 400 total responses, which means mailing about 66,000 to start.)
  • 1,000 new donors in your first 12 months. That means mailing about 165,000 packs in that first year.
  • ROI: if it’s 0.65, great; if it’s 0.40 to 0.65 it might work; if it’s under 0.40, there are likely better options for you.

That’s a good start. Once you establish that you have a viable program, you need to track some other things you can’t measure until a year later:

  • Second gift rate: how many of your new donors go on to give again within 12 months. Only 35%-50% of donors ever give a second gift.
  • Annual giving: add up how much they gave in 12 months since they came on board. This is how you’ll move from losing money to making it.
  • Monthly gift conversion. Encouraging your new donors to become monthly donors is one of the keys to success. PLEASE call all new donors and ask them to be a monthly giver within weeks of their initial donation.
  • Any donors who give more than twice the average donation: call them immediately, thank, and call them again a few weeks later asking for that second gift.
  • Estimate the 5-year ROI using some basic modelling.

You also should keep track of these other long-term things:

  • Donor response to a survey: send a supporter connection survey. That’s the best way to upgrade donors to their highest possible level.
  • Bequest commitments.
  • Volunteers (if that is important to your organisation).
  • Cross selling to donors if there are other ways to support your mission beyond donating.

Sounds hard work. Why bother?

Direct mail is still far and away the BEST source of major donors and bequests. Like 5-10 times better than anything else.

If you have a great, integrated program with the direct marketing team, marketing-communications and major donor/bequest people working together: it can beat everything else in the long term! It is just hard!

In fact, it’s so hard, I’d say don’t do direct mail acquisition AT ALL unless…

  • You are only mailing locals, swapped lists or a well-defined “tribe”
  • You hire a professional direct marketing fundraising agency (not an advertising agency) with a good reputation.
  • You have superb integration with major donor and bequest people willing to follow up these mid value and bequest leads.
  • You have puppies. (Just kidding. But only a little; puppies are probably the most effective subject for fundraising – even if you aren’t an animal charity, squeeze some in!)
  • Don’t make it up. Learn. If you are serious about investing – even if you meet the criteria above, PLEASE talk to me about how I can help through our one-to-one coaching. You’ll easily cover the investment in savings and have a more informed view!

I hope this helps you make the decision about diving into direct mail acquisition. It’s not for the faint of heart! But it can power the funding of your organisation like nothing else!

Before you embark on a new or revised donor acquisition strategy – even before you begin to look at the budget – please talk to us! We have tons of tools, data and helpful advice that will make it so much easier. Use this link  to book a free call with Sean. He’ll give you some very valuable free advice on the direction you should probably go, and will show you how we can help you more through our Coaching+ program.

Related posts about direct mail fundraising:

 

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2 Truths Your Donors Wish You Understood about Direct Mail

I am a Gen Xer. I am not the core target market for direct mail. In my early twenties I had to learn two lessons quickly in order to do my job as a Fundraising Appeal Manager.

Lesson one: The people who respond to direct mail grew up with the post being THE main way people communicated outside of in person

The audience who loves and responds to direct mail the most are the Silent Generation born before 1945 (and we are talking about those born in the last 1920’s to 1945) and the older of the Boomers, so let’s say those born 1946 to the 1950’s.

If you’re younger than that, you no doubt see the mailbox as a container full of bills, catalogues, and other not-so-wanted things.

But a few decades ago, the average person could count on there being personal letters from people they knew in every post. Try to imagine how different it would be to approach the mail knowing you’d be connecting with friends and family — some of them people you haven’t seen in years. The post was a source of precious human connection. And even though it was possible to reach distant people by telephone, it was prohibitively expensive, used mainly for emergencies and very important news, if at all.

You and I approach the mail with little sense that there’s anything good in there, and rarely anything from a real person.

Not most of our donors. They expect good things to come in the mail.

This is why direct mail — which to my imagination seems so unlikely to be at all interesting — can work. And work very well in many cases.

Break free from your sense that the mail is almost entirely boring, annoying, and irrelevant.

Do your best to imagine what it’s like to think of the mail as magical, beautiful, and important.

That’s when you’ll start to succeed in direct mail fundraising.

Lesson two: Direct Mail donors want mail from causes they are connected to and care about

Our core direct mail audience range from their 60s to their 90s. Most don’t work the long hours you and I do. They don’t have the kids’ dinner to scramble together in the evening, along with the household chores, being nice to the significant other, and doing all those work/life balance things we know we should be doing. They have more time.

They also have more life experience. They saw more than any generation before due to their access to radio, TV, phones, print, and later the internet. They have lived through wars, famines, and revolutions. They saw the rise of AIDS. They fought for civil rights and lead the feminist movement.

Every generation tends to believe their own time is the most dramatic and important of all time, but think about it: people who are now older lived through more crisis, danger, and drama than you or I can imagine. They have a strong sense of connection with the world, which comes from their experience. It also comes with age, because changes in brain chemistry increase their sense of connection with the world.

They see and experience their world differently from you and me.

Direct mail may seem to us like irrelevant and unwanted “junk mail.” To a true direct mail donor, it is a chance to change the world!

That’s the reality you’re working in when you work in direct mail.

Learn more about the often-surprising ways we connect with donors by taking our most popular online course, Irresistible Communications for Great Nonprofits. It’s available for members of The Fundraisingology Lab. Check it out.

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What Your Direct Mail is Like for Real People

I’ve spent a good decade and a half defending direct mail. Mostly in response to anxious nonprofit insiders saying things like “I’d hate to get all the mail we send.”

I won’t pretend everyone you mail wants it. And I won’t pretend everyone who gets your mail even reads it.

But many of them want your mail.

And many of them love your mail.

I’d like to take you on a walk-through of the ways real people consume direct mail.

What follows I believe to be true, or as close to true as 15 years in the trenches gets me. My hope is you find some tips and tactics you may not have considered or maybe just a good check-list for you to use.

First of all, let’s admit it: No matter what you send, no matter how you present it, some people will simply not give your (or any) mail pack any attention at all. My reading of the scant research on this suggests as many as eight, and as low as four, out of 10 people you mail simply dump your mail into the bin with barely a glance.

Those who remain are willing to grant you around 15 or 20 seconds of their attention. First the envelope and then whatever comes out first — if they open it.

They scan at headlines, pictures, captions, and the elements you’ve highlighted in some way. But they’re not reading. They’re just scanning to see if your mail is interesting or relevant or valuable. And about half quickly conclude that it’s not.

Into the bin.

So how can you make it through the first cut — the throw it out without even looking cut? And then the second cut — the throw it out unless something grabs their attention?

  1. Accept you aren’t the audience and put your personal opinions aside.
  2. Respond to the way people who do consume direct mail do it.

Let’s focus on the group that gives their mail some attention. What do they look for?

Their name. Spelt correctly. This is the first reason to not thrown it in the bin.

Maybe your logo. I’ve tested outer envelopes a lot. Of the tests that did deliver statistically significant results the outcomes varied by charity. For some a plain, unbranded, no message outer works best. For me this is the element of surprise – What is inside? Who is it from? For others the logo being present works better. Very rarely did a teaser message win. The main time a designed outer envelope has won was with animal welfare and children’s charities where compelling, emotive images of puppies, kittens or children beat the no design versions.

So you got them to open the pack. What do they do then? Consider you need to cater to three types of readers.

1. Sally Scanner. She starts skimming to get some details. My hope is your pack insertion order means the first thing Sally sees is the letter (and if you’ve never considered your pack insertion order please do, it’s your first moment of truth). So, assuming Sally comes across the letter first this is what she does.

  1. Is it addressed to me?
  2. What does the Johnson Box say?
  3. Who is it from?
  4. What does the PS say?
  5. What jumps out at me?
  6. Is it easy to read?
  7. Is it about me?
  8. Is it easy to respond / do what I’m being asked to do?

2. Dutiful Deb. Deb dives in a bit more than Sally. She’s probably a seasoned charity giver. She probably got several appeals at the same time as yours. She’s scanning a bit more deeply because it’s the right thing to. And Deb is looking for something to trigger her interest, something to entertain her, to engage her, to respond to values she shares with your cause.

3. Excited Elaine. Elaine expects your mail. She likes it. She sits down and reads the letter, the response form and the other pieces you’ve included. She is going beginning to end.

Your direct mail letter is a one-to-one conversation between the letter’s signer and Sally, Deb or Elaine, and nothing assures them that your message is intended for them better than seeing their name at the beginning of the letter. People love to see their name, and today’s technology makes it cost-effective to personalise your mailing. The marginal cost saving of not personalising is not worth the drop in response.

Before moving from the salutation to the signature, most readers will take a fraction of a second to scan whatever is visually obvious at the top of the letter … the material often called the Johnson Box.

Knowing this, you can use a Johnson Box, along with underlining, highlighting, bolding, and notes written in the margin to call attention to your call to action, and to pull the reader’s eyes across and down the page.

When we work with direct mail, we can get bored of a standard letter format. But a standard letter format is what works. If it didn’t, the format would have changed. We would have stopped writing letters home to mum this way and done something different.

After scanning the letter and perhaps reading the Johnson Box and/or opening paragraph, the reader will typically look to see who signed the letter.

It helps to print the signatory’s name and title under the signature and avoid “creative” signatures. Scribbled signatures don’t build trust, and eye-flow studies show that readers respond negatively to a signature they can’t read.

Once readers see who signed the letter, many will read the P.S. before moving back to the top of the letter. Not using a P.S. is simply a missed opportunity.

Keep the P.S. to three to four lines and use it to restate your call to action and tell the donor exactly how they can respond.

If you can personalise the P.S., do it. Inclusion of the recipient’s name at the beginning of the postscript draws even more attention to this recap of your call to action — and this call to action should include your ask, using a personalised ask amount derived from each donors previous giving level.

How you choose to format your letter (and any other elements of your pack) will impact its readability. FACT: Pretty does not necessarily equal readable.

To make your letter visually inviting, keep your paragraphs short, left justify your lines and provide plenty of space for your left and right margins.

Indent your paragraphs—they “catch” the reader’s eyes and help lead them down the page—double space between paragraphs. 12 point font is the absolute minimum, but I’d rather you use 14 point. I know you want to save costs and keep letter length to two pages … well all you are doing by sending out a 10 point font letter is turning away your audience. Too small = too hard. 

For enhanced readability, use a serif font—Courier, Times New Roman and Georgia are examples—for the letter. Practically every book, newspaper or magazine printed in the Western world uses serif type because it enhances reading flow and reduces eyestrain. If you want it read, use a serif font.

And don’t end a page with a complete sentence. Look at your newspaper. To finish practically any article, you must turn the page, and that’s exactly what you want your readers to do – keep turning pages until they reach the call to action.

I love a long word, especially when it’s the perfect word for a nuanced sentence. But that’s me and that’s 2% of the time. What I like more is being understood. And the research shows that writing at a lower reading level will hit the mark with the widest audience. Aiming above that will lose you readers. Simple, clear language is not dumbing down. Far from it, it is showing an understanding of your audience, it is showing your audience respect and it will force you to take the often complex situations we are working to address and make them accessible.

My favourite words to open a letter are “You” and “Your,” quickly followed by text that shows Sally, Deb or Elaine how awesome she is.

This isn’t a letter from an organisation to a prospect or customer. Your letter is a one-to-one conversation between the letter’s signatory and the donor. The more ‘we’ you use in the letter the less they’ll feel the signer is talking to them.

Write in a conversational style as if you were speaking face-to-face with the donor. Use your words to create an image for them. If the donor can see herself in the situation you create, she’ll take an interest and read on. A great story will win the day. A bunch of stats will not. A bunch of chat about how great an organisation you are will not.

Is responding super easy?

Response forms should be something you put some brain power into, not an afterthought. Your donor may engage more with the response form than the letter.

If the donor has to squint to read the information or the boxes are so tiny they struggle to make their credit card numbers fit, they’re more likely to give up. Make it easy!

Tailor the response form to the letter call to action. You will have told me a great story in the letter so follow through and repeat the messaging on the response form. Or consider Sally and Deb — they may only look at the response form … does the start of it present your specific call to action or is it generic? Consider how much more powerful your response form could be if you consider it to be another mini ask vehicle.

Want to know what really works in direct mail fundraising? Take our online course, 7 Steps to Creating Record-Smashing Direct Mail. It’s your hands-on workshop in what works, how to do it, and how to apply these truths to your cause! It’s available for members of The Fundraisingology Lab. Check it out.

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Direct Mail

3 Last-Minute Tweaks for Your End-of-Year Campaign

Tweak: a fine adjustment to a mechanism or system

Here are some fine adjustments you can do that can meaningfully improve your upcoming year-end campaign.

Tweak One

Make a direct ask. As in “Fiona, will you please make a donation today to help train more lifesaving paramedics?”

A lot of fundraising hints at giving, hoping donors “catch your drift.”

They don’t know what you need them to do unless you tell them! And we don’t receive unless we ask. I have tested this many times — not asking in an appeal letter simply means you will raise less money.

The more specific and direct the ask. The better. As in “Fiona, will you please make a donation of $125 today to help me train more lifesaving paramedics?”

This is even better. That $125 is based on my previous giving. Donors respond best when you suggest what they do, and suggesting they give a gift that’s around the size of their previous giving is your best bet.

Tweak Two

If you have direct mail donors who have also provided their email address, use email to support your campaign.

One email is not enough. It’s hardly worthwhile unless you send around seven emails. That way you’ll get far more people opening at least one of them.

Tweak Three

Call your top donors and ask them for a gift. Sean has done an awesome video to talk you through this and you can find that here: How to Boost Your Direct Mail Campaign After it Has Gone Out.

Now here’s the hard part: These three tweaks will make little difference if you are not basing your appeal on an emotional and engaging story that helps the reader feel the problem and see how they can be part of the impactful solution.

Want to really sharpen your fundraising skills? Take our online course, 7 Steps to Creating Record-Smashing Direct Mail. It’s your hands-on workshop in what works, how to do it, and how to apply these truths to your cause! It’s available for members of The Fundraisingology Lab. Check it out.

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Direct Mail

Great Fundraising: It’s Not Just for Big Charities — You Can Do It Too!

You don’t have to be a huge organization to get your fundraising right.

Case in point: Two direct mail pieces that came to me in the final weeks of December.  I’ll just show you the outer envelopes of both packs, but what we see there is repeated inside.

First, this piece from Seattle Goodwill Industries:

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This is a donor acquisition piece, as I am not a donor to this organization. I think they got my name by one of three ways:

  • Renting a list of donors to other charities.
  • Renting a list of buyers or subscribers that have shown a likelihood of donating.
  • Mailing to households in a ZIP code that already contains a concentration of their donors.

So how do they address this person who has never donated to them?  By displaying what I assume is a brand positioning statement.  Thanking me for believing in something.

That’s quite an assumption.  And while Goodwill has a very strong brand and most donors are likely to have heard of them, it’s not a fundraising proposition.  It’s not putting action in my hands.

While I have no inside knowledge about how this piece has done, I’ll make a guess:  It could have done better. “Big brand” organizations like Goodwill often “get away” with fundraising that would be a disastrous failure for the rest of us. But they too do better when they speak to the donor about the donor’s chance to take action that makes the world a better place.

What donor focus looks like

By contrast, look at this envelope from The Kehillah Jewish Education Fund, a funder of a group of private schools in the Chicago area. They are also a member of The Fundraisingology Lab here at Moceanic.

I am a donor to this organization, so it is addressing people who have shown their interest before.  And it addresses me with action.

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It’s not a fancy envelope — it’s not going to win any design awards (though the yellow stock is a very smart move). The important thing it does is address the donor in two ways: Announces the chance to double their gift, and makes sure there’s an urgency.

Nothing about the brand. No assumptions about the donor, other than they like to leverage their giving, which is a very safe assumption to make about virtually all donors.

Here’s the point: You don’t have to be a top-10 nonprofit brand to do smart fundraising. You can be a small local group with a one-or-two-person fundraising team and do better than much bigger organizations.  Just remember this:

Make your fundraising message about the donor. Not about your organization.  Donors don’t give because you are a great organisation. They give because they are great people who share your values.

Anyone can work with that assumption.

It’s too bad so many fundraisers never do!

Want to know what really works in direct mail fundraising? Take our online course, 7 Steps to Creating Record-Smashing Direct Mail. It’s your hands-on workshop in what works, how to do it, and how to apply these truths to your cause! It’s available for members of The Fundraisingology Lab. Check it out.

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4 Ways to Secure That All-Important Second Gift

I met up with a fundraiser — let’s call him Brian — a couple of years ago to talk about the work my team had been doing for their donor acquisition program. The direct mail acquisition was doing really well. Great response, strong average gift, acceptable ROI, in a tough market … I was there to find out why they had decided to do less of it, not more.

Brian was late for the meeting. He had been with his team making welcome calls.

Every single new donor who had provided a phone number received a welcome call. They attempted to get through up to 12 times! They really wanted to connect on those calls.

Turns out the second gift rate of their new donors who were reached with a phone call was higher than those not reached. The value over 12 months was also higher. It wasn’t just the call making the impact, information gathered in the phone calls was impacting … more email addresses captured, giving a wider reach for their multi-channel communications and critically understanding the donors relationship to the cause (a major health issue / killer) was sought and used to personalise subsequent communications.

Brian was prioritising this donor care for new donors. If he recruited even higher volumes of donors, they would not be able to keep up with the calls and do all of their other work.

The best outcome would have been Brian being able to get more budget to staff the welcome calls so he could continue to invest in higher volume acquisition. He couldn’t. But he made the tough decision — and I think this was the right one … better retained and engaged donors for a longer life time over as many donors as possible.

As a follow up to my recent blog, The Most Important Gift from Your Donor – It’s the 2nd, Not the 1st!, I’ve got four evidence-based ideas you should plan to do, after your brilliant first gift acknowledgment (like Brian’s welcome calls), as part of your new donor engagement and second gift conversion strategy.

1. Ask again, quickly, and many times, giving the donor more opportunities to have even more impact.

I have seen many donor communications plans that do not prioritise asking again quickly … I think this comes from the unsubstantiated idea that we need to rest donors after they give. Analysis shows that those most likely to give again are those who have given the most recently. Testing I have run has demonstrated that the sooner you ask, the higher the second gift rate.

2. Focus on what they have demonstrated they care about … not EVERYTHING you do. Ask them to support the same thing they just gave to again.

What did you ask the donor to support? Tell her she supported it. Show her how the thing you are asking her to support now links to what she has shown she cares about. Even better — the best thing to ask for is the same thing she gave to in the first place. The idea that you have to ask the donor to support something different seems to come from an idea that donors need lots of options or that they might get bored with the same thing. The data DOES NOT support this. A donor is far more likely to give to the same thing again than something different.

Many donors work on a 12-month giving cycle … which can stretch out, particularly if the number of opportunities to give again from you is few. If after 12 months of opportunities to give you have not had a response, ask the donor to give to exactly the same thing they gave to in the first place … it works.

3. Offer Monthly Giving.

Monthly Givers are retained at much higher rates than one-off or occasional givers, and new one-off givers are great prospects for Monthly Giving, when asked correctly.

Asking soon, like within 6 to 8 weeks of their first gift, maximises response as the memory of giving and how great it made them feel is still fresh. And don’t give up! Some donors need more time experiencing supporting you to see the value in Monthly Giving.

4. Send them a survey.

A “new donor survey” can be a great engagement tool, and donors who respond are more likely to keep supporting you.

A version of your Supporter Connection Survey can be used for new donors really effectively. If you haven’t already taken our Supporter Connection Survey course, it’s available for members of The Fundraisingology Lab. Check it out.

Acquisition is hard. Make your life easier by planning to get that second gift and to keep those new donors giving from the outset.

Discover how you can connect more with your donors, grow your fundraising income, and master your career. Join The Fundraisingology Lab and you join the thousands of smart fundraisers who are becoming EXTRAORDINARY FUNDRAISERS. Check it out.

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Direct Mail

Direct Mail: Dead, or More Alive Than Ever?

These are dark times for direct mail fundraising. Response rates are down (and have been trending lower for more than a decade). At the same time, costs of paper, printing, and postage keep going up, usually faster than inflation.

And then there’s the M-word: Millennials. Everybody knows they don’t respond to direct mail. We’re not sure they can even find their own mail boxes!

So direct mail is dead, right? The sooner you stop using it for fundraising, the better. Right?

Not so fast.

A sober and non-panicked look tells us that direct mail isn’t dead. It’s not even sick. But it’s changing, like everything else.

If you’re profitably using direct mail in your fundraising program, cancelling it might be one of the biggest mistakes you could make.

Have you heard about the grand experiment of the American Cancer Society?

One of the biggest direct mail fundraisers in the US looked at the big picture of falling response rates, rising costs, and the looming Millennial Threat. On top of that, the direct mail program was a relatively small source of revenue. It seemed obvious to them: direct mail was fading in importance. So they suspended direct mail donor acquisition. Just acquisition, which is the least profitable and most difficult part of direct mail. They kept their large and thriving direct mail donor cultivation program going. The suspension started in January 2013.

They restarted direct mail donor acquisition about 18 months later.

Because the experiment was a financial disaster. Here’s what happened:

  • The number of new donors to the Society dropped by 11% — those other channels didn’t pick up the slack.
  • The massive and successful event, Relay for Life, raised $25 million less than the previous year.
  • The estimated five-year impact on income: a loss of $29.5 million

And that doesn’t even look at the loss of bequests, which largely come from direct mail donors. That loss is likely only now starting to be felt. And it is going to add millions more in losses over the years.

If an 18-month suspension of direct mail acquisition can do that much damage to an organization with the massive brand recognition and resources of the American Cancer Society, think what it might do to most fundraisers — the rest of us, who are far smaller and far more dependent on individual donors.

Thing is, even as it grows more expensive and difficult, direct mail is a keystone investment for almost any fundraising program. It is a scalable, reliable source of donors who will do more for you over time. As one American Cancer Society leader said after the experiment, “For every $1 we invest in direct mail acquisition, we bring in $7 over the course of three years.”

No question — direct mail is not the cure-all it used to be. The cost has made it unworkable for some organizations.

If you have a viable direct mail program and you shut it down, here are some things that may happen:

  • You’ll likely lose immediate (first year) revenue.
  • Your event revenue may suffer.
  • You’ll get fewer planned giving prospects.
  • Your major donor program will shrink. The large majority of major donors start their giving as direct mail donors.
  • Your online giving will probably suffer — direct mail is one of the main drivers of online giving.

But what about the Millennial Threat? Are their different habits and media use going to finally kill off direct mail as a fundraising channel?

Maybe. But that isn’t a factor yet. People of that age are not DM-responsive — but they’re less responsive to other media too. We thought the same things about Boomers a couple of decades ago. When they were in their 30s and 40s, they were less responsive to direct mail, and all kinds of boys cried all kinds of wolf about the coming doom. But as the Boomers have aged into their 50s, 60s, and even 70s, we see them paying more attention to direct mail. Chances are, the Millennials will do something similar when they reach those ages. But even if they don’t, that’s years in the future. It’s not now.

So how do you know if direct mail is working? There’s a pretty easy calculation:

  • If your direct mail acquisition is getting a return on investment of less than 0.5:1, it doesn’t really work.  The cost is so high you will always struggle to make it pay off.
  • If that acquisition ROI is 0.65:1 or better, you almost certainly have a viable direct mail program.
  • If it’s somewhere between 0.5 and 0.65, it might be viable.

And here’s the other factor: Direct mail is the best source of major donors and bequest donors. Nothing else comes close. So to really get full value from direct mail, you must have two things:

  1. A robust donor upgrade pipeline that encourages donors to increase their giving.
  2. A solid bequest marketing and follow-up program.

Without those things, even a solid direct mail program is probably iffy in the long run!

Bottom line: Direct mail is a challenge. And expensive. (And it’s getting more so.) Direct mail is important, but it might not be for you just now.  Keep your eye on that initial return on investment and make sure you have a way to maximize donor upgrading and bequest marketing!

For more on the investment mindset you need to maximize your direct mail program, see this enlightening video with Professor Adrian Sargeant: How to Use — or Misuse Donor Lifetime Value

Want help overcoming the challenges of direct mail? Join The Fundraisingology Lab for the resources and community that will help you become a master!

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Pop Art Businessman watered money dollars from a watering can
Direct MailDonor CareDonor Love

The Most Important Gift from Your Donor – It’s the 2nd, Not the 1st!

I started my working life in customer service, selling women’s shoes. This had two major impacts on my life. 

  1. I have a shoe addiction that appears to be incurable. 
  2. I have always believed that understanding your customer leads to the best possible outcome for both of you.

In my shoes days, my chatty nature allowed for me to get to the heart of most ladies’ shoes desires fairly quickly — and resulted in solid sales for me and happy ladies with new shoes they loved. Over my seven years selling shoes I generated a small following of ladies who returned to me time and again for their shoe-indulging needs. If they came back a second time and sought me out, I knew I would very likely see them again and again and again.  

The same goes for donors, if they come back for a second time, they are much more likely to give again than those who have only done it once.  

One of my first jobs in fundraising was on the phones with an environmental charity taking inbound donation calls. I was blown away by the passion of the donors, how much they knew about the environment, threatened species, and climate change. I found myself learning as much as possible so I could join and understand their enthusiasm and concern. And I naturally found myself focusing on thanking them for their donations, their time, making the effort to call in, for supporting again for supporting for so long, for supporting for the first time.  

I didn’t know that this kind of thanking was not common. And like my shoe days, I ended up with a group of donors I spoke to, or who asked to speak to me, every time they gave. They appreciated my attempts to understand them and what they cared about and my thankful approach. I learnt quickly — because they told me — that lots of other organisations did not thank them in any way. That they weren’t always sure their giving was doing anything. 

These basics still hold true, but now I have the evidence beyond my own anecdotal experience to prove it.  

Thank and engage with a new donor and they are more likely to give again. And someone who gives for the second time is more likely to give again … the first gift is not a commitment, the second one is closer to an indication of ongoing potential. 

So how do we secure a second gift? 

I think it’s important we don’t assume a first gift is a commitment.  

When we solicit a first gift from a new donor, we rarely suggest it’s any form of commitment. In fact, strong first gift asks focus on a single focused offer (see Jeff’s blog on this: How to Make Fundraising Work: Nail the Offer), and as such the expectation we set with prospective new donors is to receive that gift and show the donor that their giving has achieved what we said it would. 

Sean explains this well in his blog: Sorry darling not everyone wants a relationship with you.

“You see, most donors don’t want relationships with you. They gave because they liked the pack/person who signed them up on the street/advert online/Facebook post/friend who did an event. The connection is slight. Casual. Hardly ‘engaged’.” 

Here’s my top tip for securing the second gift: 

Make sure your first-time donors know they have done something meaningful, that they have had the impact you offered them.

Your thank you acknowledgment for their first gift is your first moment of truth. Your first opportunity to engage and influence a potential second gift. Running at the first-time donor with expression of thanks for the “commitment” they’ve made to your organisation … or worse still, throwing a tonne of information about everything you do and welcoming them on board like they have committed to marriage, is not responding to where the first time giver is. 

If you aren’t even sending a thank you or acknowledgment, stop reading here and go address this. It’s the most important thing you will do to improve your donor experience and donor retention.  

Effectively thanking donors for the donations, they make is not a cost — it’s a necessity. It’s good manners, it’s common sense, and it will help you take a step towards being donor-centric (See Jeff’s blog 20 Donor-Centric Things You Can Do to Raise More Money — Now and for Years to Come  for some chat on what donor-centricity is and other things you can do to be more donor-centric).

I’ll put it out there: the majority of first gift acknowledgments are rubbish.  

Why? Because they are generic or purely administrative or not reflective of what the donors did (which was make a gift, in response to some trigger). None of these things make a first-time donor feel like their donation was valued. And even worse, they don’t give an emotional pay back … they don’t show your first-time donor that they have done something important in some specific way. 

An administrative or generic acknowledgment ticks the boxes of being organised and they are unlikely to upset anyone … but they certainly don’t provide compelling, emotional support for the outcome of giving. 

An over-the-top ‘Welcome to Us’ first gift response is likely just confusing and/or overwhelming. This is just information overload, with lots of organisational information unrelated to them, their donation, the impact of their donation, or their motivation for giving the donation. Lots of rational, factual, and organisationally focused information that I guess we create with the belief we are presenting our credibility. Often these packs ‘educate’ or introduce a first-time donor to everything we do. 

Welcome to Save the Snails Fiona, you have joined an organisation that is 45 years old, and doing X, Y and Z to save snails and we are so pleased to have you on board. 

And the donor is thinking, Hey wait a minute, I didn’t join anything. What is happening here?  

Even if you acknowledge what they gave for, this ‘too much, too soon’ approach can obscure the compelling, emotional support for the outcome of giving. 

A really great thank you / acknowledgment should: 

  1. Address the donor personally and correctly. 
  2. Tell her what impactful / life-changing thing she has achieved, personally, by making the donation. Be specific about the impact … this is different from what you are going to spend the money on. Make sure this impactful thing is the impactful thing you solicited the donation for. 
  3. Say thank you … the actual words Thank You. It’s surprising how much effort goes into writing thank you letters that do not say thank you.  
  4. Tell the donor a story or extend the story she responded to. A rescue helicopter charity thanked me for my first donation, made online and unsolicited, by telling me about a young child whose life was recently saved by the rescue helicopter team and thanked me for helping to ensure further missions like that will happen. I was given an emotional reason to feel good about myself for making a donation. I was given a compelling story I could re-tell myself or my family about the impact of my generosity. My giving was treated with the respect it deserved. 

Here are a few common first gift acknowledgments to check to make sure they’re working right: 

  • Website auto response – the response that confirms the donor has made a gift once she makes the final click on the donation form. These are hands-down the most non-personal and uninspiring administrative interactions most charities deliver. If you don’t have control over this part of your web journey, find out who does and engage them to help you. It might cost some money, but it is worth it. 
  • The donation destination on your website. Do the words Thank You appear at all? 
  • Inbound call to your office / supporters service team. Are they trained and supported to have the skills and feel they have the time to be delivering really heartfelt thank yous to everyone who makes a donation? 
  • Inbound call to a phone agency. Have you listened in on their thank yous?
  • Response to a direct mail pack. Are you pumping out a generic, two paragraph note on the combined thank you and receipt piece of paper your database produces? At the very least please make those two paragraphs meet the above criteria, and if they can’t, find a way to include an additional thank you letter with the administrative receipt. The cost and operational hassle are worth it. 

We can help you explore your Donor Service needs and opportunities through our one-to-one Coaching. To find out more and book a free call visit: www.moceanic.com/coaching-plus/ 

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Pop Art Mail with Wings
Direct MailBlithering Nonprofit Executives

VIDEO: Blithering Nonprofit Executives Discuss Making Direct Mail Great Again

The Blithering Nonprofit Executives decide they can make direct mail a lot better by making a few much-needed “reformations.”

  • Communicate a lot less often!
  • Get rid of all that syrupy emotion and instead use facts and stats!
  • Replace the boring old letter with a cool-looking brochure!
  • Stop communicating with the top donors!

You might recognize these ideas, as they are brought to the table on a regular basis.

Be careful about what the Blithering Nonprofit Executives want to do. They can do deep and long-lasting
damage to your fundraising.

Want to know what really works in direct mail fundraising? Take our online course, 7 Steps to Creating Record-Smashing Direct Mail. It’s your hands-on workshop in what works, how to do it, and how to apply these truths to your cause! It’s available when you join The Fundraisingology Lab.

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Controversial non-Controversy
Direct Mail

The Most Controversial Non-Controversy in the Fundraising World

Want to stir up a group of professionals? Want to see them sweat and wave their arms and cuss?

There’s one issue that will do it every time. I’m not talking about “poverty porn,” and it’s not the overhead controversy.

The big deal that really stirs people up is the odd truth that in fundraising, long messages almost always work better than short ones.

It’s not true 100% of the time, but it’s one of the most dependable truths in direct marketing — fundraising and otherwise. Want better results? Increase the length of the message.

Whenever I say this in public, a forest of hands goes up. How could that possibly be true? It must be an isolated incident! No way!

But don’t believe just me. Ask anyone with experience — especially testing experience — and they’ll confirm it. Long messages do better than short ones. Most of the time, as in about 80% of tests.

In The Fundraisingology Lab (an awesome private group just for members), a member recently posted this:

Director of PR just emailed me about my next letter draft (not even two full pages), she suggested it should never be longer than a page/one side. She suggested editing it down before sending it to the President.

It’s a distressingly common situation: Someone with no experience in fundraising just takes it as a given that a short message is absolutely a better bet than a long one. Why? Because their gut reaction is more trustworthy than decades of training and experience by hundreds of people our in profession?

Apparently so.

But a longer message is a better bet almost every time. There is zero controversy about this among knowledgeable fundraisers.

There are exceptions, where a short message does better:

  • A short but well-executed message will usually do better than a long but sloppily prepared message with no clear call to action. (Though most of the really amateurish fundraising out there is also short, in addition to its other problems.)
  • A short message about a major disaster or another news event that everyone is being exposed to frequently does very well, and I’ve seen the short version do better than a long version in this situation.
  • An organization with a very strong brand can sometimes do well with a very short message. (See example below.)
  • Now and then a short message does better, and we just can’t see why. This is extremely rare, but it does happen!

Part of the problem is that we don’t know why it’s this way. In fact, it would be almost impossible to discover why a longer message works better. All we know is how people respond, not what was going on in their conscious or subconscious minds. You can’t just ask them; they don’t know the answer. (Most people, when asked, will tell you they’re confident they’d be more likely to respond to a shorter message!)

But here are some theories that might explain the longer-is-better phenomenon:

  • It’s nearly impossible to cram everything that needs to be said into a very short message. Most short messages are simply omitting critical contents.
  • Most readers will read about 10% of whatever you put in front of them. When the message is long, they get what they need.
  • Whether they read the whole message or not, the very fact that it is long, helps persuade some readers that it’s important.
  • Most donors are older people; older people are readers; they reward you for giving them something to read.
  • Most people read so inattentively that they simply miss the point of a short message because it appears only once!

But all of these are just theories. They may all be true or partially true. Or they could all be complete balderdash.

But this we know: You will almost certainly raise more money with a longer message than with a shorter one!

Here is an exception to the longer-is-better rule. I don’t have any inside knowledge about this pack, but I’m pretty sure it’s a champion in new donor acquisition. Because I keep getting it!

SAbuckslip

(This is just the message/reply coupon. But there isn’t really more. It comes in a small envelope. And the only other piece is the very small return envelope.)

Note that the sender, The Salvation Army, is a super-brand. An organization with top-5 recognition in the US — that is top five among all brands, not just nonprofit brands. That might explain why the short message works. It also breaks a handful of other fundraising principles that would likely sink most fundraising packs.

But unless you are with The Salvation Army … a short message is risky and less likely to accomplish your fundraising goals!

See also:
Why Your Boss Is Wrong – Long Letters Do Work Better In Fundraising 
The Weird Power of Long Fundraising Letters

Want to learn more about what really works in direct mail? Uncover all of the amazing best practices of direct mail fundraising by taking our 7 Steps To Creating Record-Smashing Direct Mail online course. It’s available for members of The Fundraisingology Lab.

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