Last summer, Randy and his colleagues, asked us to help them

Transcription

1 Offline to Online Giving Update Presented by: Bill Jacobs Last summer, Randy and his colleagues, asked us to help them better understand the dynamics of multiple donor cultivation and acquisition offline and online touch points during the fall fundraising season. Basically, for this analysis, we measured the impact of all the touch points from September through December of For a nerdy numbers guy like me, the data was very revealing. Detailed reports that benchmark against all fourteen participating Missions have been prepared and will be distributed to each of you. My objective is to recap our discoveries and to offer actionable marketing insights. In the good old days, when I first began studying fundraising trends, analyzing results was fairly straightforward. Donors received a direct mail appeal, and if they were motivated, mailed a check along with the response device. But in our new world of fundraising, donors (and prospective donors) often receive multiple appeals across several communication channels and they have the latitude of responding across multiple giving channels. A summary of cultivation and acquisition results follow: Bill brings over 20 years of research and analytics experience to Analytical Ones clients. His specialty is in the area of direct response fundraising. He is recognized for leveraging data into marketing insights. Bill s work has been featured in Newsweek, Forbes and Business Week magazines as well as the New York Times and the Chicago Tribune newspapers. He has also been a guest on the CNBC program On The Money and regularly blogs about nonprofit fundraising. The following is a recap of Bill s presentation at the Brewer Direct Institute in Marina Del Rey, an invitation-only event hosted by Brewer Direct, Inc. for their Mission clients from across the country.

2 Cultivation Results During the study season, just over 330,000 unique households were contacted via mail. Almost 137,000 donors gave one, or more, gifts, achieving a response rate of over 41% during the holiday season. In the pie chart 55% of the revenue arrived via mail, 5% of the revenue were gifts processed online and 40% of the revenue was termed other (i.e. white mail, gifts to acknowledgments, special events, gifts to dated response devices, etc). The bar chart below captures number of gifts by giving channel. Online gifts represent just 1.5% of the total gifts but 5% of the total revenue (the benchmark for Human Services across all nonprofits is 6%; so Missions appear to be slightly trailing their peer organizations). Page 2

3 Cultivation Results When comparing the average size of online gifts, Missions track ahead of other Christian ministries but behind human and social service organizations. Average Gift Acquisition Results uring the 2012 new donor acquisition campaigns, over 1.4 million D unique households (in the market areas of the participating Missions) received at least one direct mail letter. Nearly 31,000 households responded with a gift, representing a 2.16% response rate. Typically, a response rate of 1% is considered a victory. The terrific response experienced by the participating Missions is attributed to frequency; typically in today s fundraising arena, multiple touch points are required to achieve a 2% or better response rate. Page 3

4 Acquisition Results The pie chart provides a revenue distribution report; 68% of the revenue arrived via check along with the response devise, 4% of the revenue was given online and 28% other (white mail, special events, etc). Possibly, a far more important metric is the lifetime value (LTV) of new donors by giving channel. The bar chart details the average gift size of direct mail vs. online vs. other. A good estimate of the LTV of new direct mail donors is about $150 while the LTV of an online donor is over $250. We also tracked responses to the participating Missions mass media appeals; specifically households contacted based on zip codes and estimated household income. Over 1.7 million households were contacted, generating nearly 19,000 gifts or a 1.07% response rate. Page 4

5 Acquisition Results These graphics capture revenue and average gift by giving channel. It is interesting to note that the online revenue of 9% and the average gift of $119 are approximately twice that of direct mail acquisition. Even though the percent response across each channel was small, the average gift size causes this strategy to be worthy of continued consideration; though the actual strategy must be made on a market-by-market review. Page 5

6 Actionable Marketing Insights Donors have choices and will actively select how and when they choose to respond. The Mission must be prepared to accept the donor s gift whenever and however it comes and must recognize that the giving channel that is convenient for the donor may not be convenient for the Mission to process, let alone measure. Online gifts are only generating about 5-6% of total revenue. Online giving is not yet replacing direct mail giving; but in a few short years, this is likely to change. Direct mail communications do drive online giving; do not eliminate online donors from the direct mail campaign selections. Frequency is essential! Conducting one direct mail acquisition effort and concluding that it is or is not generating acceptable response will often lead to the wrong conclusion. Just like in television and radio, it requires multiple touch points to generate the desired response and return on investment. Mission donor behavior, across market areas, is far more similar than dissimilar. Participating Missions should carefully review their individual reports, and if the benchmarks fall below Mission industry averages, there just might be a significant low-hanging fruit opportunity. For more information and for a copy of the complete report, contact the Brewer Direct Client Services Team. Page 6