In the direct mail channel, the thoughtless, non-strategic practice of tossing as many appeals and acquisition pieces as an organization can afford — regardless of long-term result — is referred to as "burn and churn." I’ve railed about that in earlier posts.
For those interested in keeping their "bad practices" lexicon up-to-date, the equivalent heedless behavior in the email channel is referred to as “spray and pray.”
Fortunately, sophisticated direct mail fundraisers keep track of the ultimate costs of burn and churn. Lower retention, lower lifetime value, higher costs, etc.
And, even if the savvy direct mail fundraiser is forced by a dimwitted or short-sighted board, CEO, or finance director to “meet the total income numbers,” there are established, predictable ways to mitigate the stupidity through reinstatement/win-back programs, etc.
The time has come to start measuring and dealing with the same phenomena in the email channel. While firms like Convio and Blackbaud are contributing valuable and helpful metrics on the growth of online fundraising and on the use of some techniques, we all need to pay more attention to the email channel specifically.
Why? Because even though The Agitator covers the “exotics” like online video and social media, the fact is that email for most organizations continues to be the main new media workhorse.
Thus, with organizations struggling with shrinking budgets placing more and more emphasis on "cheap" email, this piece from Marketing Daily is worth a "read and heed" … and some serious thought, given the shocking and surprising results of a survey conducted by the Chief Marketing Officers Council on consumer attitudes toward email.
- 91% of consumers are opting out of commercial emails.
- 41% of the 91% say that irrelevant emails make them “consider abandoning the brand entirely.”
I know, I know. You’re saying, "Well, consumer targeted emails are not e-appeals" etc., etc. But, forewarned is forearmed.
For me, the most disturbing part of the CMO Council Survey isn’t that "junk email" drives customers away, it’s that marketing officers (shall we also say fundraisers?) admit to frightening ignorance:
- Only 46.5% of the marketing folks surveyed say they have insights into their retention rates;
- More than 66% are plagued with customer churn rates higher than 5% a year;
- YET….67% have no system for trying to reclaim lost or dormant customers.
Of course I know that Agitator readers are far smarter than their soap-selling, electronics-hustling colleagues in commercial marketing. And you’re not about to send out gazillions of emails just because they’re cheap.
I’m just asking: Do the e-fundraisers among us measure the effect of e-appeals on retention rates – not only on the e-channel, but also on direct mail donors exposed to e-appeals? Do you have a plan for reclaiming “unsubscribes” and dormant donors who’ve swum in the e-channel? And one more very key question – is your e-message/e-appeal relevant to that donor’s previous interest in your cause?
At the same time, I’m rejoicing that so many fellow Agitators — that would be YOU — are contributing testing data and insights on your experiences in both the online and integrated realms. Keep it up, please.
Thank you.
Roger
This article was posted in: database marketing, direct mail, direct marketing, Don't Miss these Posts, donor retention, email marketing, fundraising, loyalty, marketing metrics, new media, nonprofit management, nonprofits, online fundraising.
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Once again I am agitated (smile). Conceptually this article is interesting but I take issue with a few things. Firstly, when the “consumer opt out” rate is mentioned for commercial emails, and a warning is given that this may happen to online fund raisers…my immediate feeling is that this “expert’ is not comparing apples to oranges. The truth of the matter is, online fundraising by and far is directed towards individuals who have opted-in and have an emotional affinity to a given organization. While I DO feel that there is some threat of email abandonment, the amount that this article implies is exaggerated.
I also take issue to the sarcastic tone expressed when the statement “shall we say fund raisers” is made. The term “Frightening ignorance” grossly misrepresents the “situation” that online fundraisers are in…and this article is yet another misguided attempt to put the fluid, less trackable vehicle (online fund raising) into a more rigid box (direct mail). Implying that online fund raisers are ignorant is essentially like calling doctors who cant figure out the cause of cancer ignorant (extreme example but you catch my drift). Online fundraisers face many challenges such as:
Lack of offline and online data syncing (so far no tool efficiently provides a solution for this).
The constant changing of online trends (facebook, twitter) email abandonment, the interest natural disasters.
Pressure to have “trackable results” and benchmarks as with direct mail which has been well established for years.
General lack of understanding about skill sets needed to perform in the email fund raising realm. High turnover amongst industry professionals which in turn creates a weak spot in the industry and leads more previous direct mail experts to speculate about what does and does not.
All in all…I believe there are nuggets of good information in this article BUT I whole heartedly believe that applying the “rules” or lessons learned from direct mail to online fund raising is a mistake. The truth of the matter is that no matter who deems them self an expert, the only organizations that will survive online or otherwise are those that are willing to keep their finger on the pulse of THEIR constituents. Constant flexibility and creative freedom will in my opinion always yield the best results in this field. If organizations would focus more on cultivating creative and technical talent AND providing and environment in which these individuals can grow and learn, the online fund raising world would be a better place.
Excellent reminder. I think the point about abandoning brand with too many communications/sales or fundraising applies greatly, as you have said, to direct mail.
Some nonprofit organizations are so focused on gross with marginal short-term net they have little opportunity of long-term mutually beneficial relationships. Some out there are mailing 2, 3, and even 4 or more times a month to a significant number of donors.
Data will reveal this folly but you have to seek it, believe it and act upon it.
Vernica, I think your point about online fundraising appeals being targeted to people who have opted in is a good one — but presumably people who get advertisements by email have also clicked into or onto some space where they sign up for, or allow access to their email for the purposes of receiving information (ads). Can you address this assumption? What is your experience?
Past articles and industry standards suggest that 10% is the cross-over between direct mail and online fundraising. The last number I saw for bouncebacks was 30-40%. So, how do these figures translate into abandonment and retention. What happens to the 90% of e-donors who don’t convert to direct mail? If 30% to 40% of them have bad email addresses, that means that 50 to 60% of donors remain as online donors — presumably repeat donors. How would you, as on on-line fundraising professional suggest an organization meaure the success or failure of online fundraising efforts? I ask this question, because online fundraising is not free.
If you look at the licenses, back-end costs of processing credit card donations, and fulfilling any information or premiums that are not electronic or digital in nature, and then add in the cost of salaries for online fundraisers, and html programmers and online designers, and consultants hired for their expertise in fundraising — well, online is not free. And for nonprofits strapped for cash, with boards crying for more money for mission, what standard would you suggest online fundraisers be held to? For for-profit and non-profit organizations alike, net is the name of the game.
So, does your desire for creative freedom and flexibility and organizations that promote learning tie in to the purpose of fundraising? And do you really think that what you want for online fundraisers is any different than what a direct mail marketer, or a telemarketer, or a DRTV or mobile marketer wants? We all wish we had more resources with which to do our jobs. We are all looking for benchmarks against which we can measure performance, and evolving better measures of performance. That is the legacy of direct mail, and what makes it valuable — that it is measurable, and that you can say that if your programs perform within certain ranges of costs and income, you will generate net — and donors. And that is also why fundraisers track site visits, click thru rates and actions taken on the web. It’s net — and number of individuals retain. I am agitated too — by your comments about a medium which in my experiences still raises the highest gross money. And a medium which can drive people to the web — or the phone (call or text), or Facebook, or to tweet. Yes, its getting more expensive. That’s why fundraisers are looking to every possible channel, and to get them all to work together, and to be able to measure results against costs of say, a web-phone-web campaign, or an email-snail mail-email campaign. I’d be interested in your response. Let’s agitate some more.