Multi-Channel Mythbusters And Real ROI
August 27, 2013 Patrick Sullivan
Many fundraisers believe that multichannel donors are worth many times the value of single-source donors. Except that’s not entirely accurate.
According to Sarah DiJulio, principal at M+R Strategic Services in Washington, D.C., research from CARE showed that although multichannel donors are more valuable, it’s only about a $20 difference ($187 versus $168) for donors making two or more gifts. For some segments, such as donors with highest previous gifts between $20 and $29 or $500 and $999, single-channel donors are actually worth slightly more.
In addition to busting that common myth about multichannel donors, DiJulio and M+R colleague Steve Daigneault, senior vice president, outlined five major initiatives over the course of one year that were by clients. The comments were made during the recent Bridge to Integrated Marketing and Fundraising conference in Oxon Hill, Md. They rated the initiatives on two metrics: effectiveness and ease of implementation.
A large metropolitan museum tested a direct marketing leader, in this case email, that arrived in inboxes shortly before a direct mail piece hit mailboxes. This initiative the panelists rated “great” and “easy.” Though the email generates almost no revenue, it brought a 29 percent lift in response rate. The email told recipients to be on the lookout for a special package containing a visitors’ guide to the museum. “It helps to have something cool in the envelope for the recipient to look out for,” said DiJulio.
The second initiative involved sending a follow-up email to prospective donors who had received telemarketing calls. Those “pledgers, hedgers and refusals,” in the words of DiJulio, had either said they would make a pledge but not on the phone, maybe they would donate, or they would not donate. The email blast resulted in a 5.4 percent overall lift in gifts.
The panelists said it was a great and easy initiative and recommended it, “but only if your telemarketing vendor can send emails easily,” said DiJulio. If not, if your organization and the telemarketer have to go through many extra steps to send the emails, it’s probably not worth it, she said.
Going from prospect directly to monthly donor is “a pretty big leap,” said DiJulio, but that’s what the third initiative attempted to do for a national gay rights group. Prospects who had signed a petition received a welcome email. It was a very simple survey that gathered no information but asked the prospect what they like best about the organization and why they took action. “It’s designed to tell you about all the awesome things, why (the organization) is awesome and why you’re awesome for supporting them.” After the survey the prospect was taken to a form to sign up as a monthly donor.
The welcome series had two more emails, each with a call to action to become a monthly donor. The series as a whole had a 0.49 percent conversion rate. DiJulio said the first emailed worked very well, but the second and third didn’t, and recommended marketers not try to convert prospects into monthly donors without easing them into it.
Daigneault talked about modeling telemarketing responsive online prospects. “Organizations can append their files with household and credit info,” he said. “First, we looked at the number of credit accounts open, the theory being if someone has multiple accounts, maybe they’ll be freer with money. This proved to be correct. Someone with 16 to 20 accounts is the “most open” to philanthropy. M+R also looked at behavioral data, average income of people in their neighborhood, how many children were in the house, home equity and other metrics.
“We took all this data, created a model and applied it to online prospects,” said Daigneault. He said the results were not that great. “There was this black hole of time we got sucked into in creating this model. It was an immense amount of data processing and management and analysis, very messy and complicated.” Though the model did reveal promising segments, said Daigneault, “we would have included them in telemarketing anyway.”
The final initiative was a campaign with email and telemarketing to prior donors. “When someone donates to an organization, within that initial period they’re more likely to respond to a monthly ask,” said Daigneault. For an international aid organization, campaign materials said the 2011 famine on the Horn of Africa affected millions of children, but those aren’t the only children who need donors’ help; the best way to help is to become a monthly donor.
The campaign was a three-email series with follow-up telemarketing. “Results were fantastic,” said Daigneault. “Online appeals performed better than one-time giving campaigns.” Success was measured by how quickly the new donors paid off the telemarketing expense of acquiring them, which was between one and three months. The campaign has since become the standard model. With medium effort, the organization got maximum results.