The deadly dazzle of digital
By Wayne Gurley
President & Creative Director
Some “experts" say you should stop using direct mail altogether and convert all fundraising to email and other digital channels.
A few organizations have stopped using direct mail for acquisition and are acquiring new donors solely via email every month. They say, "it's cheaper and more timely." I agree you can get an email out quickly, and it's also cheap.
But it is more productive?
Do you get a better response?
Does email excel at doing what postal mail does?
For some organizations, the answers to these questions may be “yes.” But for many others - and I might say MOST others - the answers are "NO."
Here are some important facts to consider before you abandon direct mail completely...
Survey says…
In a recent post by Roger Craver at "The Agitator" ("Update on the Cost of Embalming An Elephant)," he harkens to an earlier post called "Missing Out: Smaller Organizations and Direct Mail."
Craver concludes that...
Smaller organizations are not taking advantage of the power of postal mail, and...
20% of respondents felt that most organizations are unaware of the difference in response rates between digital and postal mail.
The reasons?
“Too expensive.”
“Management believes we can do it all online.”
“Too much hassle with the logistics of printing and mailing”
“Don’t have time.”
“Don’t know enough about how to use direct mail.”
The power of postal mail
Craver goes on to say that according to the latest Direct Marketing Association (DMA) study...
"...average response rates from direct mail at 4.4% are a whopping 37 times higher than average email marketing rates at a mere 0.12%. Other studies show the same disparity, although open, click-thru, and response rates vary slightly."
One of these studies is the 2021 M+R Benchmarks Report which puts the national average email response at 0.29% from donors and 0.05% from prospects.
This compares unfavorably to what we see from the postal response in healthcare philanthropy, which is 5% - 15% AND OFTEN HIGHER from donors, and anywhere from 0.5% - 2% OR MORE from prospects.
Craver provides his own explanation of the economics of email vs. postal mail…
"If an email to donors has, on average, a 20% chance of being opened and a postal mail letter a 50% chance…and if the response rates average about 0.05% for an email while a printed letter delivered to the donor’s home enjoys a 4% response rate…that’s quite a difference in results.
"Assume the average gift for both channels is $30. An email to 1,000 donors, assuming no cost, but a 0.5 percent response rate will produce $150 from those thousand donors.
"The direct mail letter, assuming it costs $750 to reach those 1,000 donors with a response rate of 4%, will produce a total of $1,200 minus the $750 cost of the mailing for a net income of $450.
"For a group with 10,000 donors, that’s a $2,000 difference in favor of postal mail. It seems obvious to me which channel is preferable."
What the real experts say…
Several fundraising consultants and direct mail practitioners from both the U.S. and U.K. weighed in on "The Agitator" survey.
(Below are some condensed comments. (You can read all of the responses HERE. They are found at the end of the post.)
From consultant Pamela Grow…
"One of my subscribers wrote recently to say they’d dropped direct mail three years ago and gone solely digital. The result? They lost 2/3 of their donor base."
From Ken Burnett, a U.K. fundraising consultant…
"Roger, while undoubtedly alarming, everything you say resonates with what we see over here in the U.K., too. The dazzle of digital seems to have blinded fundraisers to the workhorse of their trade."
From someone wanting to remain anonymous…
"Direct mail is being systematically choked-off by a combination of rumor/opinion (NOT FACTS) that goes like this: 'It’s too expensive (hmmm…maybe if you are producing a 4-color piece on 100 lb. stock); cumbersome (too much lead time required); email is easier and cheaper; no one reads or responds to DM anymore (um, especially if you don’t send it!); everyone does everything online nowadays;' and don’t get me started on the ridiculous millennial argument.
“To make matters even worse, we have painted ourselves into a corner by deciding that since DM is 'so expensive, we will only send it to our top prospects (LYBUNTS, SYBUNTS) and cast everyone else into the email pool. Thus, we have an ever-larger swath of our file that hasn’t had a piece of DM from us in over TWO YEARS;
"Lost in all this is any focus, AT ALL, on the message and the ask. They have become secondary to the delivery system. Suffice it to say we never measure response rates; no one ever asks (!)
“…Our focus is almost EXCLUSIVELY on major gift fundraising, and we’ve had some success. It’s just not dawning on anyone that we aren’t building the pipeline anymore. We are systematically drying it up."
The final word.
Don't misunderstand - there's nothing wrong with email if used properly and as one of the many tools in your fundraising toolbox.
It's also true some people don't respond to email, while others don't respond to direct mail. The trick is providing opportunities for everyone to choose their own giving channel.
That's why I have no problem sending the same ask through multiple channels and letting the donor decide how they want to respond.
I like using email as an alert to a letter arriving at a donor's mailbox, then again as a follow-up - or sending an email with the same ask at the same time you mail a letter.
Email is very effective when used at the end of the calendar year around December 29-31. Response during other times of the year is not as strong.
Very often an offline message is why someone makes an online gift. So they work well together.
The problem I have is when an organization totally abandons a technique that's been used successfully for decades and replaces it with a less effective, anemic technique.
How can we help?
For more info on how Allegiant Direct, Inc., can help your organization improve its fundraising results, write Shannon Russell at: shannon@allegiantdirect.com
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