THE SALVATION ARMY CASE STUDY MAIL S ABILITY TO BRING IN THE MONEY

THE SALVATION ARMY CASE STUDY MAIL S ABILITY TO BRING IN THE MONEY

BACKGROUND The heart of The Salvation Army s fundraising is a focused six week marketing campaign in the lead up to Christmas. During this time they recruit all their new donors and ask existing donors to give again. This campaign spends 70% of their annual marketing budget. Historically, the campaign used only print media: mail, door drops, press and inserts, and a single creative message. In 2007, The Salvation Army faced the classic charity challenge rising costs and falling donor volumes. The 2007 campaign had cost 6% more year on year, yet recruited 15% fewer donors. It wasn t all doom and gloom; in fact overall the campaign was market beating. The appeal raised 8.6m on a spend of 1.9m. Cold recruitment, which relied heavily on mail (77% of cold spend), was split 50/50 between addressed and door drops. It was returning an ROI of 1.33 in year one. Mail supported all the warm communication, which delivered an immediate ROI of 14.98. So, a huge dilemma. Doing nothing would continue the gradual decline, but making a change could put the existing category leading results at risk. The Salvation Army decided to do something. And they set four key metrics to guide a clear and measurable strategy: Volume growth of new donors, the primary objective. A year one ROI of 1.0 or more for new donors, so recruitment was cash neutral. The value of each new donor over five years had to continue the current value model. Cost per new donor recruited was a key measure. 2

SOLUTION The Salvation Army launched a plan to build on their already powerful mail campaign by testing the ability of a truly integrated multi-channel programme to grow donor recruitment and donations. For Christmas 2008, The Salvation Army made two major changes to the previously all print contact plan. They added TV and digital media: TV added significant reach to the media plan, taking it from 64% to 90% coverage of the core audience. Digital provided easier access to an additional response channel for donors who wanted to give online. Commitment to these channels grew over five years. Direct mail creative 3

Simultaneously, the plan more than doubled investment in mail volumes over the same period, recognising mail as the core of the programme, with both addressed mail and door drops providing the primary media to drive donations. Cold mail volume increased +270% to 5.4m while door drop volume increased +158% to 9.6m. By planning the channels together across the five years, The Salvation Army was able to maximise the role each media played in the marketing mix, building on research showing the multi-media multiplier effect when including mail: TV amplifies response to mail and door drops, and both drive people online. Integrating TV with door drops increases response from door drops. Deploying door drops to maximise effective reach and using addressed mail for precision recruits new users without wastage. Lastly, they tested tailoring creative to individuals, sending different messages to different groups across different media channels to maximise impact. 4

RESULTS The Salvation Army experienced an immediate increase in new donors and levels of giving in 2008, both off and online. And these grew year on year. Over the five years, 2008-2012, the number of new donors recruited grew by 262% up to 131k and total donations grew by 48%. 9.5m of immediate incremental income is projected to become an additional 24.8m over the next five years, as many new donors go on to give again. Total donations increased significantly 14,000,000 12,000,000 10,000,000 8,000,000 8,554,919 8,564,487 8,773,574 10,782,566 11,496,649 12,707,003 6,000,000 4,000,000 2,000,000 0 2007 2008 2009 2010 2011 2012 TOTAL DONATIONS Source: The Salvation Army From 2008-2012, cost per new donor fell by 16% while the number of new donors recruited grew from 50,000 to more than 130,000. 5

The Salvation Army: Mail/door drop integral to total campaign success in more than doubling new donors efficiently 2012 compared to 2007 base Mail s big increase: since 2010 Cold mail increased: 270% to 5.4m Mail/door drop Online response up 595%: DM key driver Door drops increased: 158% to 9.6m Volume of new donors: 262% up to 131k Campaign spend: 221% up to 4.1m Total Campaign Cost per new donor: down 16% to 31.96 Incremental income: 9.5m short term, 24.8m over 5 years Note: Mail/door drop is 66% of 2012 spend Source: The Salvation Army/Mike Colling & Company, 2014 Mail remained the most cost effective generator and the largest volume source for acquiring net new donors in the expanded media programme. Other channels generated large amounts of donations from current donors. The individual level targeting inherent in the direct marketing channel meant that 97% of new donors recruited by mail were new to the organisation, compared with an average of 50% from the other media channels. 6

Door drops for reach; cold mail for precision Door drops mop up response; addressed mail finds new donors 100% 97% % new donors 80% 60% 40% 20% 0% 69% TV 52% 49% 52% 55% Press Inserts Search Door drop Mail Source: The Salvation Army data, analysis by MC&C The impact of mail was delivered not only in the media mix but also in frequency and messaging. The Salvation Army mailed two packs to current donors at Christmas within three weeks of each other. By deploying a different creative execution and not merely repeating the first letter, the second pack generated an additional 40% response. Campaign response confirmed how direct mail can be the most effective channel in an integrated multi-channel schedule. Integrating mail with broadcast and digital media enabled incremental value to be realised from both new and existing customers. Mail, addressed and unaddressed, forms the absolute backbone of The Salvation Army s direct marketing fundraising operations. It is the medium which quite literally changes lives by enabling us to raise millions of pounds in donations to fund our community and social work. Over the last five years, we have diversified and expanded our appeals and acquisition programme as new media open up. The ways in which people respond have changed too, but mail is still our anchor medium to put The Salvation Army visibly on the doormat of many millions of homes each year. Julius Wolff-Ingham, Head of Marketing and Fundraising, The Salvation Army Source: Royal Mail MarketReach/Mike Colling and Company Awards: 2014 Silver IPA Effectiveness Awards, 2012 DMA Bronze Award, Best Use of Direct Mail, 2011 DMA Gold Award, Best Media Strategy 7