The Great Debate: Direct Mail vs. Online Acquisition
With all the hype surrounding online fundraising, direct marketers are left with questions about the performance of online campaigns vs. direct-mail acquisition campaigns. Which perform better? How do you know which to use for your organization?
The answer: It depends.
As with most aspects of direct marketing, there is no cut-and-dry answer as to which method of donor recruitment is better, but rather unique characteristics of both channels.
In an effort to uncover some of the benefits and challenges of online and DM acquisition, I moderated a debate at the Bridge Conference in Washington, D.C., last week. Krista Harte Sassaman, senior account director at marketing solutions provider Epsilon, argued on behalf of DM campaigns; and Vinnie Wishrad, senior director, online community at Conservation International, an organization that applies innovations in science, economics, policy and community participation to protect biodiversity around the world, discussed online recruitment. While neither participant would actually recommend most groups use only one method, I asked each one to defend her or his turf, in an attempt to surface the true pros and cons of each channel.
Here’s some of what we found:
* Direct-mail campaigns generate a higher initial response rate.
* Online acquisition campaigns usually generate higher average gifts.
* Predictive analysis in direct mail is more accurate at this time, so you are able to reduce risk.
* Direct mail-only donors tend to renew at higher rates than online-only donors, but multichannel (those giving online and in the mail) often are your strongest donors.
* It frequently is more difficult to persuade a direct-mail donor to give online than the other way around.
* High average gifts online can lead to an increased long-term (24 months) donor value; however it is important to consider how the average gift is “masking” the lower retention when calculating donor value.
* Emergency or current events-related campaigns improve the performance of both direct-mail and online campaigns, but giving can increase drastically online during such times.
* A higher percentage of direct-mail donors are likely to be institutional donors, i.e., who support your cause, not just a single issue.
* The cost of mail continues to increase, and online campaigns are frequently less expensive.
* Nonprofit giving trends show more and more people likely to give online in the coming years.
Our conclusion at the end of the session was that as Internet fundraising continues to increase, it is important for organizations to consider online acquisition campaigns. At the same time, much like in the commercial world, mail still plays a vital role in the growth and maintenance of your membership file.
To help your organization determine the proper blend, consider your membership acquisition goals. Are you looking to maximize your upfront income? Break out into new markets? Develop future audiences? Increase retention? Offset increased postage costs?
The challenge for each organization is to create a strategy that best reaches its membership goals. This means constantly testing the most effective use of online leads while continuing to utilize the known benefits of traditional direct-mail campaigns.
Karen Taggart is director of nonprofit services at Care2, where she works with nonprofits to strategize about online/integrated marketing campaigns. Reach her at firstname.lastname@example.org