Wednesday, September 29, 2010

Tactics trump Economy

I think there is little doubt now that consumer confidence with regard to the economy in Australia has led to a more challenging fundraising market place. As many predicted, corporate and events fundraising seems to have been hit the most (see previous blogs) and regular giving (automatic payments from credit cards and bank accounts) the least.

But clients and staff at Pareto Fundraising wanted to know about direct mail appeals to warm (donors that have given before). Twenty eight charities agreed to self report their results from tax mailings (around May/June) in 2009 v 2010.

The results showed a total increase in income of about 2% which was much less than Australian inflation (3.1%).

When we looked into why, we saw a decrease in average donations and average response rates. The only reason the total was up was that more people were mailed - ie volumes were up.

Interestingly, about half the charities actually grew and half declined.  A key factor in growth seemed to be a shift in tactics - mailing more people, mailing more often, conducting high value donor reminder calls, high value donor packs and using better copy techniques all helped explain growth for many of the charities.  Charities that had implemented these tactics in years gone by didn't reap the rewards in additional growth in 2010 but to be fair to them, they were already ahead of the game.

It seems to me that there are only three factors in growing direct mail appeals income:

1) Realise the potential of your current database through what you mail.
Make sure you are doing best practice direct mail that has been around for years, and is in all the books and blogs: Thank properly, target properly, use personal one to one copy, have an engaging case study or story, use specific ask amounts, longer letters, lots of 'lifts' (relevant additional information), seperate response coupons etc.

2) Realise the potential of your current database through how often you mail.
Jeff Brooks (Future Fundraising Now) reckons you should aim to build up to about thirty asks per year. With the size of Australian databases and staff resources, I reckon aiming for at least twelve a year would make more sense. I have never seen a case where mailing more often decreases total income. It is a matter of balancing costs and time for you, rather than pushing donors away.

3) Get more donors. Simple - if you are getting the most of your donors, then get more donors. And now is a great time; many charities are getting their best ever cold direct mail results.

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