Why donor data is the new oil
07 June 2016
Last week the Sunday Times called into question the use of direct mail as a fundraising tool for the third sector - this time not as a result of carpet bombing or poor targeting – but the percentage of income spent on the channel. The paper has a point, some charities are perhaps attributing too much of their budget to fundraising. But that is a management issue, not a marketing one.
The fact remains that direct mail remains an extremely compelling medium for charities. According to The Good Fundraising Guide published by the Institute of Fundraising 79 per cent of donations come from direct mail. It beats any other form of fundraising from TV advertising, posters, chugging and digital. The ROI is also very favourable estimated to be 4:1 so for every £1 spent on DM, £4 in donations are received. With 45 per cent of total income coming from donations no wonder direct mail continues to be an integral part of any fundraiser’s armoury.
It’s the nature of the medium that works for charities. No other marketing channel reaches potential donors in such a personal way. Like DM, TV advertising appeals to the emotions but is far removed. As soon as the ad is over it can easily be forgotten until the next time it is viewed and this turns into a vicious circle. Digital is more direct but does not prompt donations as effectively as print, probably because it simply isn’t as tangible. Direct mail literally puts the cause in the hands of the donor making it much harder to ignore. A Royal Mail study also showed that direct mail hangs around the house for 17 days; digital communications are lost as soon as the person finishes their session on Facebook, email, twitter etc. Furthermore 39 per cent of people say that they display their mail in a specific place in the house until they action it.
The psychology of the post still makes people feel special. However, this unique bond comes with a responsibility – and that is stringent data hygiene. Send a piece of mail to someone that has passed away or has moved, or get the spelling of the recipient’s name wrong and that bond is destroyed. Our research shows that every time a charity sends out a poorly targeted piece of direct mail they lose out on £1.64 of donations in terms of brand damage – and that doesn’t include the production or postage cost of the mail pack.
Clearly direct mail remains an incredibly powerful tool for charity marketers – however, with all the recent negativity towards fundraising it is crucial that data management becomes a ‘must have’ not a ‘nice to have.’