American Cancer Society Rethinks Legacy Direct Mail Acquisition, Conversion Efforts
What about the MONEY?????
If there is one thing the direct marketing community does well it is tracking and measurement. So, yes, the Society realizes there are going to be revenue ramifications associated with this decision. The direct impact is clearer than the indirect impact, but over the course of the next several years the Society is committed to monitoring all the areas that matter. But here are the projections it is operating with as of today:
- The acquisition and conversion investment represented more than 41 million pieces of mail being sent each year. That investment will be repurposed either to other, more efficient/effective fundraising programs or reallocated to mission programs in the future. But the real net revenue impact will be seen in the renewal program.
- The current renewal program generated $41.5 million in gross revenue in FY12. The fact that no new donors will be infused into the program beginning with FY13 will have an effect over time. It is estimated that the donor population available to cultivate within the renewal program over the next five years will decrease by 34 percent.
- The renewal program is projected to decline by 36 percent in gross revenue by 2017. Subsequently, as attrition occurs naturally within these types of programs and with no new donors to cultivate, the net will also decline 50 percent by 2017.
While the above statistics are based on projection models using factual data, the big unknowns are about the contributions and impact these donors have on other revenue programs.
- In FY12 alone, direct mail-acquired donors gave more than $34 million to other channels, in addition to their direct mail contributions. But, the question everyone has is about cause and effect. Even the Society has conducted tests that show event donors who receive direct mail give more money than event donors who do not receive direct mail. In reality, that is old news as there have been many tests both within the Society and in the industry to prove it. The question is whether direct mail is required to get that extra revenue. It's a good question, and I know many industry experts who have an opinion. But, in the end, those are just opinions. Without facts to use, their challenge is to do everything possible to recoup any of that revenue with other communications or perhaps even an integrated campaign that includes direct mail.
- Planned giving donors have long been linked to the direct mail audience for most charities. There are multiple views of this, but overall the industry data suggests that direct mail is a great lead generator for planned giving. It's about the right message at the right time to the right audience. Plus, as that audience ages and begins to withdraw from other engagement opportunities such as events, direct mail is often their single connection with the brand. We have become used to looking for the "little old lady making $5 or $10 gifts" when we think of the link between direct mail and planned giving. Will leads be impacted? The Society does not know yet. But, as with the above areas, I hope to report back on how planned giving leads are (or are not) being affected with this decision over the next 18 months. The longer-term impact will probably never be known due to the 7- to 10-year timeline for a gift to be realized in this area. But, with all change comes opportunity, and perhaps new strategies will be developed to offset any impact.
- A similar situation is with online giving. In FY12, 56 percent of the Society's unsolicited online revenue (representing about $1.7 million) can be attributed to direct mail donors. No one is going to easily pass up $1.7 million, but the question remains — did direct mail alone drive that revenue? If the answer is yes — or heck, let's say it's even maybe — the strategies should already be in the works to keep this revenue through a combination of other channels. Is it possible? No one knows right now — but it is something that will be monitored closely. We know from industry data (Dunham+Company and Campbell Rinker) that one in three donors who give online say that when they receive a direct mail appeal from a charity they use the charity's website to give their donations. And, the higher the household income, the more likely the direct mail recipient was to donate online — again, raising the question on everyone's mind: How critical is the direct mail appeal to that overall transaction that landed online?
As an organization, the conversation doesn't end with this decision — one could argue it has just begun. How will strategies change based on this new dynamic? If 300,000 lapsed donors typically got mailed in the acquisition program, will the Society create some way to communicate with these individuals or will it just stop receiving communication from the brand altogether? Will the strategies in the renewal program change or stay the same? Out of about 3.5 million donors with direct mail giving to the Society, about 10 percent have an e-mail address. While these people will receive direct mail as expected over the next few years, eventually those touches may change. What can the e-revenue teams at the Society do this year to start bridging a gap that might occur downstream?
Vice President, Strategy & Development
Eleventy Marketing Group
Angie is ridiculously passionate about EVERYTHING she’s involved in — including the future and success of our nonprofit industry.
Angie is a senior exec with 25 years of experience in direct and relationship marketing. She is a C-suite consultant with experience over the years at both nonprofits and agencies. She currently leads strategy and development for marketing intelligence agency Eleventy Marketing Group. Previously she has worked at the innovative startup DonorVoice and as general manager of Merkle’s Nonprofit Group, as well as serving as that firm’s CRM officer charged with driving change within the industry. She also spent more 14 years leading the marketing, fundraising and CRM areas for two nationwide charities, The Arthritis Foundation and the American Cancer Society. Angie is a thought leader in the industry and is frequent speaker at events, and author of articles and whitepapers on the nonprofit industry. She also has received recognition for innovation and influence over the years.