June 16, 2008
Direct Mail Beats Predictions, Study Finds
By Elizabeth Schwinn
New York
Contrary to expectations, direct mail is thriving and will probably do well for another 10 years or more, according to a survey released at a fund-raising conference presented by the Greater New York Chapter of the Association of Fundraising Professionals.
Mark Mellman, a pollster for liberal causes in Washington, and Charles Pruitt, a marketing consultant for liberal charitable and political causes, said the results of their most recent survey surprised them. A 1995 survey by Mr. Mellman predicted direct-mail solicitations would receive lower response rates as older generations of donors who were used to relying on the mail died.
Instead, Mr. Mellman said he found in the new survey that response rates have remained about the same, and that older generations are being replaced as direct-mail givers by baby-boomers — people born between 1946 and 1963 — as those Americans enter retirement. It turns out, he said, that the generation of the donor doesn’t matter nearly as much as whether or not they have the time and the discretionary income to respond to direct-mail solicitations.
“Direct mail seems to be a lifecycle phenomenon, it’s more efficacious with older donors,” he said.
Not only are direct-mail campaigns still getting similar response rates, but in both surveys 68 percent of direct-mail respondents were aged 60 and older. The percentage of donors aged 40 to 59 years who responded to direct mail remained the same at 23 percent, Mr. Mellman said. The average age of direct-mail donors has increased slightly, he said, from 65 in 1995 to 68 in the new survey.
The survey of 1,200 donors who gave to charity through the mail or online was conducted by telephone in March 2007.
Internet’s Impact
Mr. Pruitt said it’s less clear what will happen to direct mail in 20 years. Younger generations, who have been brought up using the Internet, may be less inclined to switch to hand-delivered communications in retirement.
Meanwhile, younger donors are far more likely to respond to online solicitations than direct mail, Mr. Mellman said. For example, 22 percent of online donors are under age 40, while only 4 percent of direct-mail donors are that young. Charities that aren’t engaged in both online and direct-mail solicitations “are leaving money on the table,” Mr. Mellman said. “For now, the reality is you need both to maximize the support you get.
Online and direct-mail donors tend to be two distinct groups of people — they give online or through the mail, but not both, Mr. Mellman said.
However, both direct-mail and online donors share some of the same characteristics, providing valuable lessons for charity marketing, Mr. Pruitt said. In both cases, donors tend to be spontaneous, flexible, and reactive in giving. They may donate in response to an item of news or other event. Thus, charities need to solicit both groups of donors as immediately as possible after an event that might stimulate giving, such as a hurricane.
In addition, they prefer to support groups that educate the public, that spend money on programs rather than overhead, and that can demonstrate progress toward a goal. Charities need to craft communications that respond to those preferences, Mr. Pruitt said.
Direct mail and e-mail were the most effective ways to solicit donors, Mr. Pruitt said. Phone calls and banner ads placed on a Web site were much less effective.
A small percentage of donors who are solicited through one medium respond in another, Mr. Pruitt said, and it may be possible to encourage more crossover between direct-mail and online donors, if each group is solicited effectively. The trick is to make the message consistent whether it comes online or through direct mail, he said. “The problem is that too often organizations present themselves one way online and another way through the mail,” he said.
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Don’t confuse direct mails effectiveness today with 5 let alone 10 years from now. Postal increases, rising production costs plus younger gererations going online WILL diminish the effectiveness of dirct mail.
— Mike Jun 16, 03:17 PM #
Mike, yes, the effectiveness of direct mail may diminish as costs rise. But if organizations required the departments they run to be as rigorous in matching income to expenses for on-line solicitations — including the back-end costs of fulfilling premiums and the 3% surcharge levied by banks on credit card donations — that they require of their direct mail departments, then the “effectiveness” or “productivity” of email might be viewed very differently than it seems to be currently. Keep in mind the experience of cataloguers, where the catalogues drive people to the web to buy. Direct mail from non-profits likely also drives donors to the web. (Personally, direct mail from banks and mortgage companies and any commercial entity goes in my trash.) The advantage of direct mail, if you practice good list hygiene, is that the majority of the mail still gets delivered. With spam filters, etc., don’t count on people receiving that lovingly crafted email blast. All the debates about email’s effectiveness mirror the debates about direct mail’s effectiveness from the 1980’s — email is the latest addition to the marketing toolkit, another channel for reaching consumers. It may supplant direct mail, but likely it will work best with some direct mail — and some text, or mobile marketing. Consider the buzz around mobile marketing. In another 5 to 10 years, email may be supplanted by mobile or text messaging for the younger generation. Direct mail is not dead, but email is not the king of the hill yet either. It’s just the channel du jour.
— Kate Jun 17, 09:25 AM #