DIRECT MAIL: Stale Mail

Alex Blyth

It included my child's annual progress report, a photograph of him, one of his drawings and a summary of why support is needed in the region." He goes on: "A week later, the second, high-quality piece arrived reinforcing the messages of value and hope provided by sponsorship. The envelope put across a clear message - 'we couldn't end the year without saying thank you' - and the charity really hit home.

It also enclosed personalised labels for use on Christmas cards to help promote World Vision,which I suspect is very effective for sponsor recruitment around the Christmas period."

Harris was surprised and impressed by the fact that, rather than asking for more money, the charity seemed to be trying to give him something back: "On neither mailer is there a response mechanism or request for additional donations. Instead, it scores highly by being both informative and giving something back to the sponsor." He is unequivocal in his praise for the campaign: "In terms of maximising customer retention, this inclusive rather than aggressive approach is a winner."

Diminishing returns and donor fatigue are symptomatic of direct mail's failure to engage. But, as Alex Blyth, discovers, it wouldn't take much to reverse this trend

Fundraising direct mail isn't dead, but it is in need of some pretty serious medical attention," believes Steve Andrews, head of supporter management at WWF. For the past 30 years, direct mail has been the backbone of charities fundraising efforts, but in recent years, most charities have been noticing diminishing returns on their campaigns. While other, newer forms of fundraising can help to plug the ever-growing gap, charities are understandably reluctant to give up on such a reliable good earner.

According to the Charities Aid Foundation, direct mail still accounts for around 16 per cent of the total spend by fundraising charities on marketing and advertising. For all the talk about DRTV, it only accounts for 3 per cent. It is, therefore, vital that charities find some way to reinvigorate direct mail.

Why are the returns diminishing?

There are two main theories to explain why charities are receiving diminishing returns from their direct mail campaigns. The first is that we have simply reached saturation point.

According to CAF, 50 per cent of all donations come from 3 per cent of the population. This suggests that there is a core of charity supporters who already donate a lot of money.

The theory of saturation is that these people are already giving as much as they will give, and the remaining 97 per cent of the population is unlikely to give to charity.

The second theory is charity fatigue. Send mail to people as often or as well as you like for recruitment or retention, but they have more or less decided on their level of charitable donations and will be unmoved by your efforts. This point of view is almost universally accepted.

However, some argue that complaining about saturation and charity fatigue rather misses the point. They suggest that charities should instead see this as a challenge, and start trying to do something different with a discipline that has hardly changed since its heyday in the 1980s.

As Samantha Visick, strategic account manager at Digital Impact, an online direct marketing agency, argues: "Many fundraising direct mail campaigns are stale. I regularly receive recruitment pieces with the inevitable 'questionnaire and pen', which lack passion."

Not so dismal for smaller charities

In truth, not every charity is finding that returns are diminishing.

Many are finding quite the opposite. The Donkey Sanctuary began to mail prospective supporters about five years ago when press ads became less effective. It has gained around 40,000 new supporters through this route.

Deputy chief executive Paul Spenson believes that he knows why this has been so successful. "I spent the first year testing it extensively," he says. "I tried 13 different approaches, and discovered that, surprisingly, people respond most positively to a more amateur look. It indicates that we're not wasting money on overly expensive marketing materials. We're lucky that we have supporters to help us handwrite about 1,000 addresses a week!"

While Spenson has been successful in his direct mail campaigns, his formula cannot be applied to every charity. A 'big six' charity would be unlikely to find much success with mailings that looked amateurish. Large charities will also have conducted extensive and ongoing research and, despite this, still be suffering diminishing returns.

Spenson goes on to suggest a more likely reason why his returns remain healthy: "It may be that the larger charities have exhausted their databases and so gone as far as they can with direct mail for now. We've only been doing it for five years, while most of them have been doing it for 30."

So, while smaller charities are still finding direct mail is a very fruitful way to raise funds, it is the larger charities than face the issue of saturation and so must find some way to reinvigorate their campaigns.

Charities tend to agree that direct mail needs refreshing but they do, of course, disagree about how to best achieve that goal.

New creative vision

Some charities believe that a radically different approach to creative execution is the way to breathe life into direct mail campaigns. In 2003, the Great Ormond Street Hospital Children's Charity had its most successful Spring fundraising campaign ever. According to the Royal Mail, the average response rate for a fundraising direct mail campaign is 12.4 per cent, compared to 10.7 per cent for a direct mail campaign for a commercial organisation. The Great Ormond Street charity achieved 14 per cent and raised over £250,000 towards the new daycare centre being built at the hospital.

According to Graham Mills, executive creative director at Arc Interactive, the agency which developed the campaign, this success came about as a result of innovation with the creative: "Our work on this campaign avoided the all-too-easy small child in a hospital bed, and instead talked to the donor about the positive difference he or she can make by donating to the charity," he says. "Seeing that your donations have been used to buy vital equipment, find a cure or rebuild a ward will always make people feel positive about the difference they can make and this will lead them to dig a little deeper."

Hope not guilt

Others point out that this new emphasis on hope rather than guilt in creative executions is hardly a new idea. They argue that shock campaigns peaked in the 1970s and that, since then, creative has been almost universally about positive associations. Many charities, most notably Oxfam, have always refused to raise funds using images that would diminish the dignity of recipients.

Richard Roche, head of business development at the Royal Mail, is one of many who believe that the key to better direct mail is successful list management: "Our research shows that 10 per cent of addresses held by businesses and charities are inaccurate. This level of 'dirty' data can lead to a campaign being ineffective or, at best, inefficient."

As a result, the direct marketing industry is full of organisations that claim to not only remove inaccurate data, but also to segment your data so that your mail-outs are sent to the group that is most likely to respond.

Matthew Tamea, senior analyst at Occam, describes one of the more popular solutions: "For recruitment mailings everyone is trying to find the closest match to the group that is known to respond to fundraising mail. The only real way to achieve this is through a charity list swapping scheme. We manage the most widely used scheme - Reciprocate. Under that scheme, once a name has been mailed it can't be mailed again for four weeks, and it won't be mailed again until everyone else on that list has been mailed. Each name has a maximum number of times it can be mailed in a year. The end result of these three measures is that in more than 10 years, we haven't experienced a reduction in returns."

How to forge a relationship

A final group argues that charities need to do even more than this. They believe that even the most innovative, striking creative sent to precisely the right group of potential or existing donors may not be enough to ensure the right returns from direct mail. They argue that charities need to start building relationships with their supporters, or as Steve Andrews puts it: "For a long time, charities have been really good at understanding donors' value to them. They've not been so good at understanding the value of charities to donors. This is what needs to change."

An example of how this approach might work in practice is WWF's 'Animal Adoption' scheme. "Supporters can adopt one of six species, thus have control over where their donation goes," says Andrews. "They have a direct connection with the species, and value having choice. That's a lesson we'll be applying to many more of our products and supporter relationships.

Direct marketing at WWF is starting to put the supporter back in the driving seat, and we have evidence that this will generate more value."

Paul Farthing, managing director of direct marketing agency Target Direct, agrees with him. "Charities need to understand their donors and figure out why they might want a relationship with the organisation. Most donors want to feel that products and services are being tailored for them.

"We recently ran a direct mail campaign for Medicins sans Frontieres in which we spent a lot of time discovering why donors who were committed to the organisation were interested in it," he says. "Our findings and subsequent offer enabled us to break the rule of fundraising direct mail that says you have to ask first for something like a one-off £15 donation and then go back to ask for a direct debit. We asked straightaway for a £10-a-month direct debit and received a phenomenal response."

Each to their own

There are several different approaches and each charity must develop its own individual approach to direct mail. There is no one solution that will work for everyone. However, as returns gradually diminish it will become ever more important for all charities to find some way to address the issue. Charities must remember that they are not just competing against each other. They account for just 7 per cent of all consumer direct mail, and the average UK household receives 170 direct mail items a year.

Bryan Millar, director of client services and planning at direct marketing agency Whitewater, has just been involved in a campaign to reverse the gradual decline in returns from Amnesty International's direct mail. As he concludes: "Overall, in the crowded and competitive mailing environment we're working in, it's increasingly going to be a case of survival of the fittest. Sloppy fundraising direct mail will fail. Well-planned, crafted fundraising direct mail will succeed."

CASE STUDY: A DONOR'S VIEW OF WORLD VISION

Chris Harris is the business development director for Amethyst Group, a major business consulting group. He is an attractive target for many charities, but he is marketing-savvy and not an easy prospect.

He was however, very impressed with a recent campaign run by World Vision.

"A report I read recently claimed that direct mail is ideally suited for keeping in touch with customers, and that is exactly what two pieces I received from World Vision achieved," he says.

Harris sponsors a child in Mozambique and describes the first of the two pieces: "It used airmail and was franked as having come from Mozambique.

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