Maximizing Direct Mail Campaigns
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
Topic of the Month, we will 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
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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
exiting 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 their cause is embraced by everyone, 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
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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 state 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.
Articles for Further Reading
1. In addition to be a provider of fundraising software, Blackbaud also produces industry
benchmark reports, including a 2013 summary of charitable giving. This report can be
downloaded at the link below and includes data points about direct mail trends in the U.S.
https://www.blackbaud.com/nonprofit-resources/charitablegiving#.U35kI3XD_X42.
2. Jerry Huntsinger has been a direct mail expert for over forty years. On his website, he shares
a number of tutorials that cover everything from why direct mail is important to how to draft a
direct mail letter. http://www.sofii.org/showcase?id=17
Kimberly Reeve is a Managing Director in the New York Office.
We are grateful for the assistance of Carl Sylvestre of Carl Sylvestre Consulting Inc. for cowriting this Tpic of the Month. Mr. Sylvestre is a direct marketing and fundraising consultant.
Please contact Carl at 718-834-9715 or Carl@carlsylvestreconsulting.com.
www.carlsylvestreconsulting.com
For more information, please visit Cathedral Consulting Group, LLC online at
www.cathedralconsulting.com or contact us at info@cathedralconsulting.com.
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