June 16, 2008

Direct Mail Beats Predictions, Study Finds

Contrary to expectations, direct mail is thriving and will probably do well for another 10 years or more, according to a survey released at a fund-raising conference presented by the Greater New York Chapter of the Association of Fundraising Professionals.

Mark Mellman, a pollster for liberal causes in Washington, and Charles Pruitt, a marketing consultant for liberal charitable and political causes, said the results of their most recent survey surprised them. A 1995 survey by Mr. Mellman predicted direct-mail solicitations would receive lower response rates as older generations of donors who were used to relying on the mail died.

Instead, Mr. Mellman said he found in the new survey that response rates have remained about the same, and that older generations are being replaced as direct-mail givers by baby-boomers — people born between 1946 and 1963 — as those Americans enter retirement. It turns out, he said, that the generation of the donor doesn’t matter nearly as much as whether or not they have the time and the discretionary income to respond to direct-mail solicitations.

“Direct mail seems to be a lifecycle phenomenon, it’s more efficacious with older donors,” he said.

Not only are direct-mail campaigns still getting similar response rates, but in both surveys 68 percent of direct-mail respondents were aged 60 and older. The percentage of donors aged 40 to 59 years who responded to direct mail remained the same at 23 percent, Mr. Mellman said. The average age of direct-mail donors has increased slightly, he said, from 65 in 1995 to 68 in the new survey.

The survey of 1,200 donors who gave to charity through the mail or online was conducted by telephone in March 2007.

Internet’s Impact

Mr. Pruitt said it’s less clear what will happen to direct mail in 20 years. Younger generations, who have been brought up using the Internet, may be less inclined to switch to hand-delivered communications in retirement.

Meanwhile, younger donors are far more likely to respond to online solicitations than direct mail, Mr. Mellman said. For example, 22 percent of online donors are under age 40, while only 4 percent of direct-mail donors are that young. Charities that aren’t engaged in both online and direct-mail solicitations “are leaving money on the table,” Mr. Mellman said. “For now, the reality is you need both to maximize the support you get.

Online and direct-mail donors tend to be two distinct groups of people — they give online or through the mail, but not both, Mr. Mellman said.

However, both direct-mail and online donors share some of the same characteristics, providing valuable lessons for charity marketing, Mr. Pruitt said. In both cases, donors tend to be spontaneous, flexible, and reactive in giving. They may donate in response to an item of news or other event. Thus, charities need to solicit both groups of donors as immediately as possible after an event that might stimulate giving, such as a hurricane.

In addition, they prefer to support groups that educate the public, that spend money on programs rather than overhead, and that can demonstrate progress toward a goal. Charities need to craft communications that respond to those preferences, Mr. Pruitt said.

Direct mail and e-mail were the most effective ways to solicit donors, Mr. Pruitt said. Phone calls and banner ads placed on a Web site were much less effective.

A small percentage of donors who are solicited through one medium respond in another, Mr. Pruitt said, and it may be possible to encourage more crossover between direct-mail and online donors, if each group is solicited effectively. The trick is to make the message consistent whether it comes online or through direct mail, he said. “The problem is that too often organizations present themselves one way online and another way through the mail,” he said.