DIRECT MARKETING: Cold Mail Crisis

HOLLY ACLAND

Bombarding supporters with direct mail can do more harm than good. So how can you reach out to potential donors without alienating them?

If you're a woman, over-55 and live in the South-East, you're probably no stranger to charity direct mail. Add to that National Trust membership and a love of gardening and you're likely to scoop up around 12 charity direct mailers from your doormat a week. Why? Because the typical charity donor broadly fits the above description.

While many charities will have a very different donor profile, the fact remains that certain groups of people are known to be receptive to charity messages. And that fact (born out by the success of bought-in mailing lists that target this audience) is leading to a common problem in the charity sector - fundraising fatigue. Response rates are dropping off as certain lists reach saturation point, there is a shortage of fresh data coming into the market and the companies that collate the lists, the list brokers, are having to work harder than ever to deliver the sort of results charities are looking for.

But before you scrap your direct mail budget, it may well be worth taking a fresh look at the channel since it remains one of the most effective tools for recruiting new donors - even if it does require constant attention to keep delivering.

Lazily mailing the same data that has worked in the past will inevitably result in a backlash at some point. And while this is bad news in terms of generating the required return on investment, worse still is the damage it could do to your charity in the eyes of the recipient. Bombarding people with messages - be they existing or potential donors - and alienating them in the process is a concern that many charities share. Tim Hunter, head of direct donor marketing at the NSPCC, is well aware of the balance that has to be struck. He points to a recent upgrade campaign that is rolling out over winter and should generate a return on investment of £6-£7 for every £1 spent.

This sort of activity, which encourages donors to increase the amount of their regular donation, is very effective for the NSPCC. However, it does carry risks. "If you just looked at the numbers, you would keep phoning and mailing these people with the same message because it's such an effective model," says Hunter. "But what we need is a much more intuitive approach that recognises that the last thing we want to do is appear ungrateful by repeatedly asking donors to increase their donations."

Hunter recognises that although upgrade mailings may be successful, this activity has to be carefully controlled. Persistent contact can hinder rather than a help and sometimes people become so irritated by mailings that they pull back entirely from the charity. "The last thing in the world we want is for people to stop giving," says Hunter.

When it comes to cold recruitment mailings, the same rule applies. Adrian Williams, data planning director at direct marketing agency Target Direct, says he would advise clients to do no more than three to four campaigns a year. As well as limiting the potential for over mailing the same group of people and creating a negative effect, this also allows enough time for the learnings from one campaign to be fed into the next. "Three months is the shortest timeframe I would advise between campaigns," says Williams. "That gives you enough time to do thorough campaign analysis, work out which lists pulled and which didn't and make the necessary adjustments."

Working with an agency or list broker can bring vital expertise to a campaign and help to identify potential problems early on. "We compile all our results together by list used, by the creative, by the message - so whether it's a cash request or committed giving - by month of the year, by volume - you name it," says Williams. "You can see patterns emerging and if one list is ebbing away, alarm bells start ringing."

One of the great truisms that any charity specialist will endorse is the importance of testing new lists. As a rule of thumb, Williams always suggests that 20 per cent of any campaign consists of test lists. That way, if a key list starts dropping away, there are other alternatives at the ready to replace it with.

It's an approach that works well with Target's clients including RNIB, The Salvation Army and the Royal British Legion as well as The Brooke Hospital for Animals, which has just started working with Whitewater on its first direct mail recruitment drive. Vicky Seale, direct marketing manager at the animal hospital, says: "Because we've done little direct mail in the past, our first campaign will be across a wide range of lists from lifestyle lists to more generalist ones to specialist niche lists.

We don't know what's going to work, so it's a very important testing period."

Bleeding one core list dry and having nothing to fall back on is a dangerous strategy. So what is the ideal mix of lists? All good list brokers with experience of other fundraising clients will have a host of different lists at their fingertips. There are around 2,500 lists in the UK but not all are suitable for charity clients.

Mail order lists often work well because they contain names of people who have proved to be direct mail responsive in the past. Lifestyle lists - generated by either online or offline questionnaires - hold a wealth of information about the respondents interests and preferences. One such example is the Consumer Surveys. In the past 12 months, the research company has collected details on nearly half a million consumers about their personal charity support preferences. While extremely valuable to the charity sector, it would be dangerous to rely solely on this sort of data because the people listed are at risk of being over mailed.

One alternative is to sponsor a question on a lifestyle survey that is tailored to your charity and would give you exclusive use of the data for a set period of time. Gerry Scott, managing director of the UK's largest list broker HLB, says that she has recommended this option to clients but it can carry risks. "You need to be very sure that it's going to work because it's a big expense. We do look at it as an option but it's not for everyone," she says.

One popular option is list swapping. Occam Direct Marketing is the biggest player in this field with its Reciprocate database. This currently numbers 11 million unique names and works on the premise that charities can add to the pool names they're happy to share and then draw out new names to target.

Crucially, says Liz Moss, senior list broker at Occam, the charity has complete control over how its data is used. "If it has donors it doesn't want to share, this is flagged up on the database as a 'stop' rather than a 'swap' name," she says. "Each charity can restrict who has access to its data as well as mailing dates in order to protect when its mailings take place."

It is a very controlled environment which recognises that a charity's donors are its most valuable asset. By profiling a database to establish the most high-value donors, charities can ensure that they don't add their "jewels" to the melting pot. The thirst for fresh data must always be carefully balanced against the importance of safe guarding the relationships a charity already has with existing donors.

CASE STUDY - THE BLUE CROSS REVISES MAIL LISTS TO IMPROVE RESULTS

For animal charity The Blue Cross, direct mail has always been one of its most reliable recruitment tools. Head of direct marketing Julie Jeffes says that while direct response television (DRTV) is also effective, it tends to be less predictable that cold mail. "DRTV has a tendency to throw up inexplicable results," she says. "If you keep refining direct mail, it can be a pretty predictable performer."

This commitment to direct mail means that the charity is constantly testing new lists and analysing effectiveness, working with its list broker HLB.

"We get very involved in the list selections. It's a hands-on process," says Jeffes. "We're always testing something new and would never roll out with exactly the same lists."

At present lifestyle lists are proving particularly effective. "This is one of our best and most reliable routes," says Jeffes, particularly when profiled against certain characteristics such as pet ownership.

But even though lifestyle data has been working well, Blue Cross was still concerned about the performance of its cold mail activity across the board. Over the course of five campaigns, results were steadily in decline leading to an audit conducted by HLB across all data sources.

This included warm data, reciprocal data and cold mail data. The last five campaigns were analysed against a number of criteria.

Having established how these factors worked together and which generated the best campaigns, the findings were incorporated into the charity's future list strategy. These included a breakdown of the combination of list sources which generated the best return on investment.

As a result, a new list strategy was adopted including planning on an annual basis and the use of a stable mix of lists. Subsequent campaigns saw a 48 per cent increase in return on investment with cold mail now back on the agenda as an important recruitment medium.

Throughout the process, a clear understanding of what a typical Blue Cross supporter looks like has made list buying a much easier process. "We know our supporters tend to be female, over-50, with an interest in wildlife and the environment," says Jeffes. "They're more likely to be retired professionals, own cats or dogs themselves and enjoy gardening.

Interestingly they tend not to like children." Animals, it seems, take precedence over children, but it's this sort of insight that can really help the list brokers in their pursuit of new data.

Data sharing is another route that gives access to a pool of potential donors who are already known charity supporters. However, Gerry Scott, managing director of HLB, says that data selections need to be made quite carefully. "If you're an animal charity then it probably wouldn't be worth targeting someone who gives to children in the Third World as it's likely there is not going to be the right attitude fit," she says.

DOS AND DON'TS

- Do: Always establish how the names on a mailing list were sourced.

For example, if the data was gathered over the phone, online or in a retail outlet, there is no guarantee that these people are going to be responsive to direct mail. However, if the list is of people who have responded to previous direct mail activity they will have a much greater propensity to respond to your campaign.

- Don't: Embark on a cold direct mail campaign until you have profiled your own donor database. This will throw up valuable insights into what a typical supporter looks like which can then be used to purchase corresponding lists.

- Do: Ask the list broker if it offers charity rates. Many do and you will benefit from a discounted rate.

- Don't: Keep mailing the same list if response rates are in decline. Equally, don't immediately drop the list, instead try and refine the selections. For example, only mail people earning more than £30,000 or who live in an area which you know has a high level of supporters.

- Do: Remember to check a cold list you buy in against your own supporters. Mailing someone with a recruitment campaign when they are already committed donors to your charity could be very damaging.

- Don't: Rely on one"banker" list even if it has always proved very effective in the past. Make sure you always use a good selection of lists so you're never dependent on one source of data. This is because if that source dries up, it could leave you exposed.

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