ARTICLE
What Role Does Direct Mail Play In Fundraising In A Digital World?
Ask An Expert
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Our Ask An Expert series features real questions answered by Claire Axelrad, J.D., CFRE, our very own Fundraising Coach, also known as Charity Clairity. Today’s question comes from a nonprofit employee who wants insight into what role direct mail plays in fundraising in a digital world:
Dear Charity Clairity,
I’m wondering what role direct mail plays in our digitally-dominant world? My boss wants me to schedule fewer hard copy mailings, and rely more on less expensive email and social media. But I wonder if in the long run the ROI is better for direct mail than digital? Is there any research on open, conversion and retention rates for the different mediums? I did stop donor acquisition mailings a few years back because returns were so low. But, now I’m wondering if I was being pound-wise and penny-foolish.
— Direct and Digitally Dumbfounded
Dear Direct and Digitally Dumbfounded,
Great questions!
As media options continue to multiply, choosing the best channels becomes more and more fraught. And, as with most things, there’s no one right answer.
The truth is that reaching people today is more challenging – and more expensive – than it was 40 years ago when I began in fundraising. That being said, it was expensive even then!
You have to spend money to make money
For donor acquisition, direct mail returns of 2% were considered good then. And it cost $1.25 to raise $1.00. The real money came with repeat giving as measured by donor lifetime value. Still, the acquisition effort was essential because without it there would be no lifetime value whatsoever.
That’s still the case, even though direct mail acquisition guru Tom Ahern notes today 1% is cause for a party! John Lepp says anything between 0.25 and 1% is reasonable today. It’s not a lot, but it’s definitely more than nothing.
And what about other acquisition channels? Email, social media, text, advertising, events… the choices go on and on. You’ll want to try some of these, and your choice will depend on the channels you know your constituents frequent. Nothing will come from nothing. You should know, however, a recent NonProfitPro article found results disappointing:
“One of the biggest advantages of direct mail is that it yields a much higher response rate compared to other channels. Despite all the hype, the average response rate of online and social media channels is disappointingly low. The average email response rate is around 0.1%, the average response rate of paid search is 0.6%, and 0.2% for online display marketing.”
You also have to spend money to keep money
Think about it this way: If it’s your own money, perhaps you hire an investment advisor to make sure you don’t lose any value and also grow value over time. What if you were to consider your organization’s house list (any donors who’ve given to you in the past) your “donor investment advisor?”
Effectively, your list can advise you regarding who already cares about you. Used wisely, it can suggest those to whom you may wish to pay some special attention (e.g., first-time donors; monthly donors; upgrading donors; lapsed donors; major donors; event attendees, etc.). One way to do so is by sending them hard copy mail. In fact, per guru John Lepp, if you send direct mail to this house donor list you’ll get a response rate of 10 to 20% for your direct mailing.
Let’s look at some of the advantages of direct mail
It has a longer lifespan
A GLW Media study shows direct mail has an average lifespan of 17 days while email only lasts an average of 2 seconds. Often, multiple people in a household will see the direct mail piece lying around on a counter or kitchen table.
TIP: Include a QR code on your mail piece to help people take action more conveniently. Further personalize your communication through follow-up emails that serve as reminders to folks to take another look at your mailed piece.
It has a higher and faster response rate
A Direct Marketing Association report found 4.4% of people respond to direct mail while only 0.12% respond to emails. Hubspot found direct mail also speeds up the purchase timeframe. On average, any purchase decision (nonprofit donations, too!) takes longer than a week and over a third take more than a month. However, with direct mail, 73% of purchase decisions take only 1+ day.
TIP: Use one or more of these strategies to maximize the chance your letter will get opened. Also take the opportunity to personalize your mailing inside with personal, handwritten notes. It will ensure more folks pay attention to what you’ve written.
It offers a tangible, personal, memorable connection
A United States Postal Service study found 71% of Gen X and older consumers find mail to be more personal than online communications. They’re excited when they receive mail from you! Even 72% of Gen Z said they’d be disappointed to no longer receive mail.
TIP: Integrate direct mail with digital campaigns to create a synergistic effect that increases engagement. SG360’s research reveals integrated campaigns capture 39% more attention than digital-only initiatives. Moreover, these multifaceted campaigns provoke a 5% increase in emotional intensity, leading to a more memorable and impactful experience.
Bottom line
Different reports and studies yield slightly different numbers, but everything points to the fact that direct mail is more than alive and well and still plays an important role in donor acquisition, retention, and upgrades. And when it comes to building personal relationships, it generally outperforms the alternatives.
Alas, it costs more money than it used to and it takes more work. There’s simply no way around this reality.
So, it’s time to dispel the notion you can be successful on the cheap. The best course forward is to simply budget more for both donor acquisition and retention, and put in place written strategic plans to help you accomplish your fundraising goals in the most effective way possible.
Be dumbfounded no more!
— Charity Clairity (Please use a pseudonym if you prefer to be anonymous when you submit your own question, like “Direct and Digitally Dumbfounded” did.)
How do you use direct mail in your fundraising? Let us know in the comments.
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