The Impact of Direct Mail

With the current prevalence of digital media, I’m often asked if traditional direct mail is still relevant for nonprofit fundraisers. And despite the constantly changing digital landscape, the answer is yes — it’s definitely relevant. When I was in college, beepers were all the rage and cell phones weren’t even in existence. In the past decade, we’ve seen phones evolve from “just a phone” to complex mini computers. Who knows what the next communications development will be? But one reason direct mail has remained a large part of the strategy for nonprofit fundraisers is because it’s something that donors are familiar with. If I put a letter in the mail today, the post office is going to deliver it just as it has for the past 239 years.

Recent stories in the news about data breaches at Target and eBay have been a real concern for the public at large in terms of donating to a cause electronically. Many see online giving as riskier than just putting a check in the mail. Although at PVA we do use email, mobile and social media as part of our fundraising efforts, our direct mail campaigns are much larger. About 85 percent of our donations are from direct mail, which still remains our preferred fundraising method.

How do you effectively target your donors?

In order to maximize your direct mail efforts, segmentation is key. At PVA, we segment based on a variety of factors including age, sex, state of residency, responses to previous mailings, donation amount, frequency of giving, whether or not the donor is a seasonal giver (for example do they only give at year end), their interests (based on previous giving), and how many times the donor wishes to be contacted per year.

Another part of segmentation has to do with targeting your direct mail approach to the appropriate audience. We have two direct mail streams at PVA. One offers a premium like a notepad, CD or calendar, and the other is mission based. Depending on how a donor responds to previous mailings, we can get a sense of how best to market to them, which helps make our efforts much more efficient. For example, if a donor informs us they do not want to receive our premiums in the future, they can then be offered one of our mission-based mailings instead. Both have their advantages and disadvantages.

What should one consider with respect to content and visual appeals in a direct mail piece?

To make your direct mail piece effective, you should focus the content and visual aspects on who exactly is being helped by your donors’ contributions. The total package should make clear to your donors which particular individuals are benefitting from their gift, and how it’s being used. Also, let your donors know what percentage of their donation is actually going to the cause.

It’s also important to consider the segments of the list that are involved so that you can deliver a piece that really speaks to your audience. At PVA, we tend to vary our approach based on specific criteria. For instance, in our premium program, our campaigns are a blend of content and visual components. The visual part comes from the premium that is included, while the content comes in the form of a letter from our Executive Director. In our non-premium program, the balance tips more toward the content, but does include some visual element, normally an American flag alongside the PVA logo.

What are some strategies for success?

Set a goal and enact a plan. What are you trying to accomplish this year? Next year? At PVA, we’ve made a big push to increase the number of our sustaining donors and bring in $1 million from that segment in FY14. Our plan entailed targeting one-time $25+ donors and donors who have given $5+ multiple times in the past 12 months. We sent out a letter request to this target group inviting them to join our “Heroes’ Circle” which resulted in a huge success for us. At the start of FY14, July 1, 2013, we had approximately 7,300 sustainers, and in May 2014, we increased that number to over 11,500.

Since most of our revenue comes through direct mail, we focus on strategies that directly impact retention, such as including a lift note or a sticky note with a message. In repeated testing, we found that including a lift note, or sticky note, increased response rate an average of 1-2%. We’ve also begun mailing a nickel in both the premium and non-premium mailings and this approach does quite well. The nickel-acquired donor has surpassed the non-nickel-acquired donor in terms of lifetime value and does much better overall.

What does the future hold?

Looking ahead, I think the use of direct mail for fundraising will decrease slightly in the next few years, but it will still be an important and viable tool for nonprofits. The online world is becoming more and more crowded with both nonprofits and ever-multiplying social media channels. I think there’s a point where users become fatigued and it gets increasingly difficult to navigate the web efficiently to find out the information they’re looking for.

There is definitely something to be said about receiving a letter in the mail. The age of PVA’s donor base lends itself to traditional mail, and in fact, our donors prefer it. Younger donors tend to favor engaging electronically, so we’re aware that we’ll need to consider their preferences as we design appeals in the future. Because of this dual track, our list segmentation is very defined. Our donors on-line look very different than those off-line, so we consider the group we’re targeting and tailor our approach to engage most directly with each one. Where does direct mail fit into your fundraising program and how do you see it changing in the years ahead?