Category Archives: Email fundraising

Posts specifically about fundraising by email

A ‘Power Index’ for fundraising channels?

OK, hold onto your hats – because this post contains stats! But I’ll try to make them as simple as possible.

If you’re a direct marketing fundraiser like me, you probably juggle a wide variety of channels – direct mail, online, phone, etc. etc. And I want to make sure I use the right ones, in the right order, to get the best results. And sometimes the ‘common sense’ answer isn’t the right one.

For example. Let’s say I have a lot of people who have given me cash gifts and I want to find the most cost-effective way to encourage as many of them as possible to give again, or go onto regular giving.

The ‘common sense’ way might say:

  • An email costs 6p
  • A mail pack costs roughly £1 – £1.50
  • A phone contact costs £7 – £9

So I should email first, follow up with mail, and then phone those who don’t respond to either of the first two approaches. That way I am being smart and getting the ‘cheapest’ results quickest. Right?

Not necessarily! What we have done here is mistake cost per appeal for cost per donor.

Because each of those channels has very different response rates. Cost per donor, as I’m sure you know, is obtained by dividing the cost of your appeal by the number of donors who give as a result of it.

When I look at my own appeal responses and costs and work out the costs per donor for email, mail and phone for existing cash donors I get the following:

  • Email – £3.50
  • Mail – £26
  • Phone – £26

Interesting. Email is still cheapest, but phone and mail are now tied. Will Return On Investment help us break them apart?

So I look at my ROI figures (on a 5 year basis) and I get the following:

  • Email – 36:1
  • Mail – 5:1
  • Phone – 4:1

OK, that would seem to settle it. Email beats mail, beats phone. But something is still niggling away at me.

Net income levels.

You see, I know email and mail have much lower response rates than phone, and I know I get much more net income per phone contact than per mail pack or email. It might be at a lower ROI but it will still be a lot more income for 1000 phone contacts, say, than for 1000 mail packs or 1000 emails. And I haven’t taken that into account in my workings yet.

So I look at net 5 year income (i.e. with costs already subtracted) per appeal for each channel and I get:

  • Email – £2
  • Mail – £7
  • Phone – £26

Ah. As I thought. Phone delivers 13 times as much net income per appeal than email and nearly 4 times as much as mail.

But which wins on the combination of ROI and net income? How can we express this as just one number that will balance the ROI vs the net income per appeal and make it really easy to make these comparisons?

Let’s multiply up to get some nice sized numbers! If we multiply the net 5 year income per appeal by the 5 year ROI for each channel we get:

  • Email – £2 * 36 (low income per appeal, great ROI) = 72
  • Mail – £7 * 5 (moderate income per appeal, good ROI) = 35
  • Phone – £26 * 4 (best net income per appeal, OK ROI) = 104

Aha! This seems to suggest I will get the best balance of ROI and net income by phoning first, then emailing, and then mailing.

It looks like we have come up with a Power Index here. I may be using the term ‘index’ incorrectly, I know! (I’m an English Literature graduate, after all.) I’m just thinking of it as a nice shortcut number.

Please note that of course the index number in and of itself is meaningless, except in relation to the other indices. And it will be different for everyone, depending on your ROI and net income per appeal figures, per channel, per appeal purpose. I’m not saying phone beats email beats mail for everyone – just for me, for this particular purpose.

Do you use a power index like this already to rank your fundraising channels? Over 1 year, 3 years or 5? I would love to know.

 

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Filed under Analytics, Direct mail fundraising, Email fundraising, Fundraising, Online fundraising, Telephone fundraising

Should you scrap the Millennium Falcon?

Docking Bay 94, Mos Eisley Spaceport. Millennium Falcon is parked.
Luke: What a heap of junk!
Han: She’ll make point five past light-speed. She may not look like much, but she’s got it where it counts, kid. I’ve made a lot of special modifications myself.

A doozie of a Twitter debate last night!
About political email fundraising. Yes, I know, steer clear of politics, right? But this was more about fundraising techniques, and the fraught question of whether, even if a technique works better than anything else, you should use it or not.

Chris Tuttle (@christuttle) posted this tweet about a Democratic Party Congressional Committee fundraising email he’d received:

And yes, horrible design isn’t it? As one tweeter put it, it’s so back to the ’90s that throwing in a couple of flying toasters might improve it! So you might reasonably assume that someone with no knowledge at all about how to design HTML had put together this fundraising email to Chris.

But that would be where you’re wrong. Read this Businessweek article, tweeted and retweeted many times since with high praise for the Obama 2012 campaign’s email fundraising achievements. Pay particular attention to paragraphs 4 and 5 (italics mine):

“We were so bad at predicting what would win that it only reinforced the need to constantly keep testing,” says Showalter.  “Every time something really ugly won, it would shock me: giant-size fonts for links, plain-text links vs. pretty ‘Donate’ buttons. Eventually we got to thinking, ‘How could we make things even less attractive?’ That’s how we arrived at the ugly yellow highlighting on the sections we wanted to draw people’s eye to.”

So this email that looks really awful – as Chris basically described it, a spammy-looking piece of junk – is actually the result of one of the most sophisticated digital fundraising campaigns ever run.
This is what we’ve all been praising when we have lauded the Obama campaign’s success.

In fact, going by the passage I’ve quoted above, it’s probably the epitome of the process – the Democrats’ ‘banker’, or ‘control’ email. The one all the other emails have been tested against, and failed.

It’s a classic example of the dilemma many charities face with their ‘banker’ mail acquisition packs. They’re embarrassing. They’re corny. Many of them are ugly (although I have to say this is as dramatic a case of the ‘ugly banker’ that I’ve ever seen). But they work. And Jeff Brooks sums this up perfectly in his post here.

Banker packs are like the Millennium Falcon. They may not look like much, but they’ve got it where it counts.

And there are more uncomfortable truths from the Obama campaign as well. See this blog post from Alchemyworx which explains how the Obama team ramped up their send volume as the campaign went on.

Chris’ email was one of 8 he had received in 4 days, and you can see why the Democrats would be using this proven tactic.

They don’t work for Chris. And I’m sure they don’t work for many others. We debated long about the rights and wrongs. As I’m sure many of us do within the charities we work for. Surely we can’t send out something looking like that? Surely we can’t send another email/mailing?

But fundraising from large numbers of people, although we should definitely do our best to speak to each one of them individually, is also definitely a numbers game. By and large, the more we communicate, and the less obviously designed that communication looks, the more successful we are.

So when faced with something so ugly, so flagrantly in breach of our brand guidelines that we couldn’t possibly send it – maybe, just maybe, we should think again. And test.

Because we could be scrapping the Millennium Falcon. Or being like the Imperial soldiers in Mos Eisley Spaceport, shouting, “Stop that ship!”

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Filed under Direct mail fundraising, Email fundraising, Fundraising, Online fundraising

Flipping the coin

I took part in two great Twitter chats over this last week or so. One was instigated by Damian O’Broin (@damianobroin) of AskDirect – you can read a Storify of it here: http://bit.ly/1pxWiHZ

The other started off the back of the response to it from Danielle Atkinson of Merlin (@roxymartinique) – which you can read here: http://charity-chick.blogspot.co.uk/2014/03/getting-basics-right-2-direct-marketing.html?m=1

Both are about what one thing you should do to improve direct marketing fundraising.

Damian’s chat focused on inspiring people, Danielle insisted on robust testing and measurement of the response of large numbers of people.

Both are right.

Direct marketing fundraising is a double-sided coin. On the one side the individual is writ large, because as the great advertiser Fairfax Cone said, we must

Write to one person, not a million

(Thanks to @jeffbrooks for that)

On the other side of the coin, you have the response of the million, or the ten thousand, or however many people your audience is made up of.

The King or Queen, and the realm, if you like.

And our job is to flip the coin in our minds – from one to many, and from many to one. Every day, every week, every month, and from one year to the next.

It’s challenging, and it’s exhilarating. And when you get it right, there’s no job like it.

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Filed under Direct mail fundraising, Email fundraising, Online fundraising, Telephone fundraising, University fundraising

Why does your fundraising video/letter/website fail?

It all comes down to understanding the basics of direct marketing:

 

1. The List or target audience – who are you speaking to? How well do you understand their motivations and barriers?

 

2. The Proposition – what do you want them to do & why should they do it?

 

3. The Response Channel (not the broadcast channel) – how will your audience (not anyone else’s!) respond to your proposition?

 

And only then do you fix on:

4. The Broadcast Channel

5. The Best Creative Approach (for that channel)

 

Most fundraising fails through not getting the first 3 right, because it then leads you to make the wrong decision on the last two.

 

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Filed under Direct mail fundraising, Email fundraising, Fundraising, Online fundraising