The State of Direct Marketing and Integrated Fundraising

[Editor's Note: Here, fundraising guru Roger Craver shares insights from his session, “Agitate Your Direct Response Program: An Hour With Roger Craver,” presented June 11 at Fund Raising in Day New York.]

In the past 15 years, the number of public charities has increased from 600,000 to nearly 1 million. This increased competition, coupled with changing demographics, has resulted in declining acquisition rates, rising acquisition costs and declining retention rates. Unfortunately, there are no silver bullets. The much-heralded “Web” of 15 years ago that was supposed to yield a bonanza of dollars at little cost has failed to live up to the hype. Although the online world is great for information, cultivation and communication, it has limitations when it comes to fundraising.

Some important stats: Only 13 percent of donors are “comfortable” with online solicitation vs. 38 percent of donors who are “comfortable” with direct-mail solicitation. BUT … 59 percent of all donors research online before giving online. HOWEVER … when they do go online, only 3 percent to 5 percent of website visitors convert their online interest to actual giving.

Inexpensive ways to improve your bottom line

1. Act today like there will be no new donors tomorrow.
2. Focus on retention. Pay attention to upgrading and downgrading. And pay particular attention to which acquisition channels (direct mail, online, face-to-face, etc.) are retaining best and worst.
3. Focus on share of wallet. Be aware of what organizations are getting the larger share of your donors’ wallets. “Mission competition” – the competition between organizations in the same sector — is more important than ever.
4. Invest in research. Understand what makes your most loyal donors loyal. What makes donors disaffect? Understand whether your mission and message are still relevant. Know which sources of acquisition have the best retention.
5. Test your message. Times have changed. Use multivariant testing to make sure you’re using the right messages, spokesperson, images, involvement and positioning.
6. Revisit prospecting tactics. Look carefully at the past and present to determine if factors such as timing, channel, audience and involvement have changed. Learn about and begin testing predictive modeling.
7. Rekindle the love. Go back to your lapsed donors with new messages and new offers. This is a rich vein of support that many organizations overlook.

Discover hidden pockets of gold
Focus on “loyalists” and “recruiters,” and develop special programs to attract, reward and put them to work. About 20 percent of every donor file comprises loyalists — another 20 percent recruiters or “missionaries.”

Loyalists and missionaries give more. The average American donor gives $590 a year. The average loyalist gives $2,400, the average recruiter $1,300.

Loyalists can be identified by the length of time on the file, their willingness to upgrade and the fact that they self-identify in surveys as “being loyal to the organizations they support.” Recruiters tend to be a bit younger than other donors and are best identified by their willingness to take on online assignments such as signing petitions, etc.

Capture their value by designing a loyalist/recruiter plan that provides for recognition, reward and engagement with the organization and its mission.

Thoughts and recommendations
The good news about online activity is that it makes donor cultivation less expensive, permits personalization, increases loyalty and is timely.

The bad news is that the online channel — especially social media — can disconnect donors from the organization. Social networks encourage more local giving.

The need for channel integration is clear — and urgent. Younger donors engage in “channel hopping” — they might give to a disaster by SMS, to another cause by mail and to another online.

The postage meter and the mouse must co-exist. In the future, it is essential to focus on multichannel giving and channel reinforcement with one form of media reinforcing the other. And remember, older donors do use online for researching issues and organizations, but give via postal mail.

Even if you’re not raising much money right now from younger donors, it’s essential to begin experimenting with online for the Generation Y folks. Test paid lead generation, online premiums and content with perceived value.

Most of all, remember that content is king. No technique, no channel, no premium or much of anything else will work without the proper content reinforced with emotion.

Roger Craver is founder and CEO of DonorTrends and editor-in-chief of The Agitator. To receive podcasts on the strategies discussed in this presentation and for daily fundraising insights and actionable advice check out Fundraising Action at insights.donortrends.com.