With all the hype surrounding online fundraising, direct marketers are left with questions about the performance of online campaigns vs. direct-mail acquisition campaigns. Which perform better? How do you know which to use for your organization?
The answer: It depends.
As with most aspects of direct marketing, there is no cut-and-dry answer as to which method of donor recruitment is better, but rather unique characteristics of both channels.
In an effort to uncover some of the benefits and challenges of online and DM acquisition, I moderated a debate at the Bridge Conference in Washington, D.C., last week. Krista Harte Sassaman, senior account director at marketing solutions provider Epsilon, argued on behalf of DM campaigns; and Vinnie Wishrad, senior director, online community at Conservation International, an organization that applies innovations in science, economics, policy and community participation to protect biodiversity around the world, discussed online recruitment. While neither participant would actually recommend most groups use only one method, I asked each one to defend her or his turf, in an attempt to surface the true pros and cons of each channel.
Here’s some of what we found:
* Direct-mail campaigns generate a higher initial response rate.
* Online acquisition campaigns usually generate higher average gifts.
* Predictive analysis in direct mail is more accurate at this time, so you are able to reduce risk.
* Direct mail-only donors tend to renew at higher rates than online-only donors, but multichannel (those giving online and in the mail) often are your strongest donors.
* It frequently is more difficult to persuade a direct-mail donor to give online than the other way around.
* High average gifts online can lead to an increased long-term (24 months) donor value; however it is important to consider how the average gift is “masking” the lower retention when calculating donor value.
* Emergency or current events-related campaigns improve the performance of both direct-mail and online campaigns, but giving can increase drastically online during such times.
* A higher percentage of direct-mail donors are likely to be institutional donors, i.e., who support your cause, not just a single issue.
* The cost of mail continues to increase, and online campaigns are frequently less expensive.
* Nonprofit giving trends show more and more people likely to give online in the coming years.
Our conclusion at the end of the session was that as Internet fundraising continues to increase, it is important for organizations to consider online acquisition campaigns. At the same time, much like in the commercial world, mail still plays a vital role in the growth and maintenance of your membership file.
The answer: It depends.
As with most aspects of direct marketing, there is no cut-and-dry answer as to which method of donor recruitment is better, but rather unique characteristics of both channels.
In an effort to uncover some of the benefits and challenges of online and DM acquisition, I moderated a debate at the Bridge Conference in Washington, D.C., last week. Krista Harte Sassaman, senior account director at marketing solutions provider Epsilon, argued on behalf of DM campaigns; and Vinnie Wishrad, senior director, online community at Conservation International, an organization that applies innovations in science, economics, policy and community participation to protect biodiversity around the world, discussed online recruitment. While neither participant would actually recommend most groups use only one method, I asked each one to defend her or his turf, in an attempt to surface the true pros and cons of each channel.
Here’s some of what we found:
* Direct-mail campaigns generate a higher initial response rate.
* Online acquisition campaigns usually generate higher average gifts.
* Predictive analysis in direct mail is more accurate at this time, so you are able to reduce risk.
* Direct mail-only donors tend to renew at higher rates than online-only donors, but multichannel (those giving online and in the mail) often are your strongest donors.
* It frequently is more difficult to persuade a direct-mail donor to give online than the other way around.
* High average gifts online can lead to an increased long-term (24 months) donor value; however it is important to consider how the average gift is “masking” the lower retention when calculating donor value.
* Emergency or current events-related campaigns improve the performance of both direct-mail and online campaigns, but giving can increase drastically online during such times.
* A higher percentage of direct-mail donors are likely to be institutional donors, i.e., who support your cause, not just a single issue.
* The cost of mail continues to increase, and online campaigns are frequently less expensive.
* Nonprofit giving trends show more and more people likely to give online in the coming years.
Our conclusion at the end of the session was that as Internet fundraising continues to increase, it is important for organizations to consider online acquisition campaigns. At the same time, much like in the commercial world, mail still plays a vital role in the growth and maintenance of your membership file.
Companies Mentioned:
 |
Who's Charging What!
I have heard very little about the cost of moving TOWARDS online fundraising and incorporating it into the overall online fundraising cost.
Specifically, the cost of acquiring and making ready the email lists (mostly data entry work) and considering you will reach a point after a while where you have the emails for 30-40-50% of your donors... and not all donors even have emails or computers...what is the cost of doing BOTH email mailings AND direct mail to those without email addresses. Surely there is an extra cost to managing who get what mailing?
Richard
With the proliferation of SPAM, email open rates are continuing to decline. In our experience, direct mail, when executed against the right targeted list, will always perform. The challenge is timing and message. How often is too often to contact your donor file? Examine the strategic message that inspired them to respond in the first place. Spend more time in analytics, customer segmentation and thoughtful strategic/ creative development and response rates should hold steady or increase. Think outside the box and try fresh approaches. Our campaign for KCSM-TV and KCSM-FM exceeded all previously held numbers and we sent less mail, spent less and created a campaign that had lots of legs for years to come.