Using URLs in Direct Mail

Thanks to Mike Linnemann from the University of Minnesota Foundation, and Tom Ahern, donor communications expert whose recent Twitter conversation inspired this blog.

Direct mail is the largest source of new donors in most fundraising markets.

(AND if you want to know more about how to maximise income from your direct mail, please check out my upcoming webinar on this topic. View the recording here! )

Yet, even with an average age of 70-80, depending on country, many of these donors are online as well..

So, should we include convenient URLs for donors in our direct mail letters?

URL on a response coupon - in the 'To Make a Gift' section.

The answer seems obvious. Of course we should!  If we do, we see a big spike in online donations.

But is that the right answer?

A good few years ago we tested including URL on the donation form and in the PS of a direct mail letter.  Something like:

www.charityname.com.au/BetsyAppeal.

In this A v B test, half of letters (A) included the URL, half (B) didn't. 

Unsurprisingly, there were more donations made online from the A Group - people who were given the URL, than from the B Group.

Whenever you send direct mail, there is usually a spike in donations to the standard donation page on www.charityname.com.au. However, with volumes usually being very small, it is hard to make valid conclusions.

The correct measure for the test, because this was a warm (house) mailing going to previous donors is:

“Does adding a URL to my direct mail letter increase total net income from the group who got the URL?”

Any other measures, like how many donations were made online, average donation and response rates, are all variables contributing to that single question.

In the test the answer was....

NO.  Adding the URL reduced total income.  Although the A group gave more online,their total giving (including off and online) was less than the B Group.

Adding a URL to my direct mail letter reduced total net income.

Why?  What was going on?

My theory is simple.  

A good direct mail letter is designed to trigger an emotional response and get the recipient to do something now.  With the standard letter, we asked them to fill in the form, right now, pop it into the enclosed postage paid envelope and post today.

That’s probably what they have done before, which is why they are on our direct mail warm (house) file.

With the letter that included the URL we added an extra option, such as, 'Or you can make a donation online at...'.

What happened was that the 25% or so who had opened the letter and felt motivated enough to give either filled the form there and then (yay!) or put the letter aside with 100% intention to donate when they were online.

The problem is (or was) that they would then have to do stuff to log on - like turn on their computer. 

Precious time would pass between their desire to donate and the actual act.  And that time would eat into response rates.

Of course, these days with three or four times the mobile penetration than when we tested it (four years ago) many can indeed donate online straight away.

But remember, the average age of a direct mail donor?  Hmmm, what proportion of people that age can donate straight away online?  

The answer:  I just don't know. Please, someone test it!

The first charity to send me the results of testing this properly:

A true A/B test looking at whether adding a URL to letter, PS and/or response form statistically increases net income will get a donation of US$150/AUD$150/ €150 from me if they let me post the results.

Sean

PS

Click here to watch the recoding of my webinar with Tom Ahern - 
Release the Explosive Generosity Locked Inside Your $100+ Donors... With These Proven Direct Mail Secrets.  

The new big thing in fundraising - Direct Mail

The biggest new thing in fundraising:  direct mail

There are so many hip new ways to acquire donors in New Zealand and Australia.  Twitter, Facebook, face to face, phone, mobile, peer to peer, two-step, payroll giving, email, web sites, Google ads,...  but the number one by volume is that new-fangled thing – direct mail.

Seventy charities from the now independent Commonwealth nations of New Zealand and Australia pooled their card file indexes* to study how donors actually behave. They have discovered that direct mail acquired more donors last year than any other form of donor recruitment.

Direct mail has never had it so good, and 2009-2012 saw a 100% increase in the number of new donors acquired through this new-fangled method.  Back in 2009, 155,000 of the 267,000 people who made a donation for the first time to one of the 70 charities did so after receiving a direct mail letter (57%).  In 2012 that number had increased to around 350,000 new direct mail donors from a total of 508,000 (69%).

Famously championed by social change entrepreneur Dr Barnardo in London in the late 19^th century, direct mail is making a bit of a surge in the Southern hemisphere.

When interviewed, Dr Barnardo was delighted that direct mail had taken off so much.

“I am verily pleased that direct mail is performing well to help waifs and strays in the colonies.” He said.

“With [former] convicts putting their backs into good, honest work to help those even more disadvantaged than themselves, I believe the outposts of New Zealand and Port Arthur [Australia] may well thrive as independent states separate to mother England.”

Looking at individual charities to work out how these donors are acquired, we see most are acquired through ‘premium direct mail’.  This describes a method of breaking down the barrier of getting donors to open an unsolicited envelope by offering a gift in return for simply opening and reading the message.

The gifts could be address labels, tote bags, stationery, key rings or pens.   

Whilst acquiring donors through these premium packs tends to lead to lower average donations, it  also leads to much higher response rates, higher initial net returns and more long term net income.  

In the olden days (a couple of years ago) charities were happy with 0.8% to 1.2% response rates from cold mail, but premium packs tend to get at least three times that.

Unfortunately response rates are not covered by benchmarking, but I know that the average response rate from direct mail from Pareto charity clients who follow our recommended strategy is over 4.5%.  

Even with lower average donations and lower second gift rates the maths usually work in the favour of the charity willing to spend more per pack on premium direct mail.

Face to face acquisition of regular givers is still huge in Australia and New Zealand, and I recommend still maintaining (or starting) investment in that area, but make sure you have a balanced porfolio - direct mail cash donors will provide a unique income source and will bring you your future bequests and major donors if you follow the right strategies.

Sean

*Please note – the charities were collaborating by analysing giving patterns and behaviour.  None of them have breached any privacy rules by allowing any other member to identify donors as individuals; ie donors’ personal information was never shared between partners in this exercise.

The importance of Marginal Costs

Tom Ahern and I were chatting about fundraising at his home in Rhode Island (which I found is not really an island) and decided to video one of these conversations whilst drinking (ahem) mocktails.

Three minutes long, but hopefully useful in breaking down a useful mathematical concept for fundraising.

Feedback welcome - more of these?

Sean

Pareto Benchmarking report released

Seventy charities came together to share information to improve their fundraising. Many attended presentations of the data in Melbourne and Sydney this week and more will attend in Wellington on Monday and Auckland on Tuesday.

The photo was taken in Sydney with over 120 fundraisers gathered to find out what is happening to giving in Australia and New Zealand.

Most of what we learned was good news. More money from more people than ever before was donated to the 70 charities, and the majority of charities have enjoyed decent growth over the past two years.

Some top level notes from the session:

- online solicited donations still not significant source of donors or income

- swapping is fantastic, with no indicators of donor fatigue etc BUT
let's look at the long term impact

- direct mail acquired donors - the biggest growth area and we know it increased yet again in 2013. Band wagon is being jumped on!

- face to face still rules the roost for new automatics regular donors growing more than 10% from 2011-2012

- the five year value of non-face to face acquired regular givers is much, much more than face to face so charities should be prepared to accept much higher acquisition cost. A direct mail acquired donor will give an average of 51 times their initial monthly donation, where as an average face to face acquired donor would give 29 times their initial monthly donation.

- we knew credit card donors are better prospects for regular giving than cheque donors, but it turns out they are better bequest prospects too!

- nearly all contributions from a person who comes in as a regular giver will be their regular gifts

- nearly all contributions from a cash donor source will be cash, though over five years bequests and regular gifts add a significant portion

- for the first time we are seeing income directly related to the bequest 'pledge rates' - could be enough to start benchmarking that next year. Charities with higher pledge rates of bequests will make more bequest income

- biggest key to success in bequest pledges seems to be being Victorian! Top four were Australian charities based in that state. But really it is having a certain type of program - the 'one page legacy program' which relies on direct mail and phone to drive pledges. Type of charity is not necessarily key.

- second gift rates, payment type, average donations and more are useful - but ratios are really really useful

- older donors are better. Get the best response rates, retention and total giving. Except for face to face, forget younger donors; there are easier ways to help your beneficiaries

- your donors are almost certainly going to be giving to other charities. For example, 60% of all Australian donors who gave a gift in 2012 and were acquired by direct mail, gave to one of the other 53 charities! The figure was about 15% from face to face acquired regular givers.

Charts and more information to come after the New Zealand presentations next week.

Sean

Something look familiar about this ad?

This is the 'article' that Data Monkey referred to in her recent blog (see my previous blog).

It appeared in the most recent Fundraising and Philanthropy magazine; I still recommend subscribing if you are in NZ or Australia, but for other countries I figured not showing you it was unfair!

Fp ad feb2011 premium acquisition cropped

View more documents from Pareto Group

You may note the style of the ad - ads like this have been around since the early 20th century, and they are still the best layout I reckon; David Ogilvy may be in a better place, but his proven ad ideas are still the best to place in the 21st century.

Recent presentations available

If you attended FIA and came to the session on identifying major donors that Charlotte Grimshaw and I presented, you can find the presentations here.  The other, direct marketing data session, is also up there.

Sean

Eight mailpacks in one day

Well, we pulled it off. A bit wobbly when trying to explain a strategic brief, but overall Anup Tiwari of UNICEF India and myself managed to squeeze eight direct mail letters out of people that had never done anything like this before. We even had field workers from Red Cross and UNICEF producing direct mail packs.

We ran a one day workshop at the International Workshop for Resource Mobilisation (basically, THE international fundraising conference for the Global South).

Charities from S Korea, Thailand, Kenya, Indonesia and India worked together to produce the main element for a direct mail pack - the letter.

Right at the end, participants read their letters out to unanimous approval. They were amazing.

I am going to get some of the letters up on this blog when they email them to me, so check this out later.

Sean