A client recently came to me with this question: Why don’t we just send people age 65+ the direct mail appeals and take anyone under 65 out of the mail program?
The question was, of course, predicated on the assumption that only mature donors respond to direct mail, and the belief that people under 65 would be better cultivated through digital channels.
My client wanted to cut costs in print so that the organization could invest more in digital, so I could see why this mailing strategy appeared to be an attractive idea. Also, the average age of this organization’s active donor file is 68… meaning 86% of their 0-36 month donors are age 50+.
As we wrestled with this question, I shared a couple of key thoughts with my client to help guide their decision-making process…
1. While direct mail donors do tend to be older, age is NOT the primary driver of response.
Past giving behavior will always be a more powerful predictor of future behavior than any demographic data. This fact has been researched extensively and verified among fundraising professionals.1
Given this, I advised my client to use traditional RFM selection methodology and let the donor’s giving history determine whether they should be included in each mailing.
2. Offline marketing influences online giving.
As we continue to see explosive growth in online giving, many organizations are (understandably) wondering if they should shift to an all-digital strategy. Some are seeing declining direct mail response rates and conclude that mail must be on the way out. Yet, a closer look at the data tells us a much different story.
BDI recently conducted an online match-back analysis to determine how much online revenue is being driven by a direct mail appeal. We looked at online gifts within a specific date range from donors who received a direct mail piece and calculated the match-back lift. You can read the complete findings of this study here, but the bottom line is this: The study revealed a considerable amount of revenue is influenced by contact through direct mail.
Across multiple appeals and organizations of different sizes, we saw an average match-back lift between 6-16% for the entire year. November hit a 24% online match-back rate, and online match-back to the December year-end appeal reached 67%!
Of course, bear in mind that we exist in a multi-channel environment where donors are encountering marketing impressions across various media, all of which contribute to motivating donor behavior. But certainly, receiving a personalized piece of mail leads to donors giving online. The data proved this out.
One more important point:
When the online match-back revenue is taken into account, the ROI for a direct mail campaign is better than mailed-in responses alone may show.
Considering all this evidence, I cautioned my client that they may experience a drop in online revenue if donors under the age of 65 are removed from the mail program. And I have good news to report! By the end of our discussion, they agreed that removing these donors from mail was not the best strategy.
The moral of the story…
Allow your donors to self-select based on their giving behavior, rather than imposing any outside assumptions on them. Also, an online match-back analysis can really help your organization better understand the return on marketing dollars spent. This, in turn, can help inform and optimize marketing decisions moving forward.