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The Paradox of Direct Mail

August 01, 2014

Headshot_derrick_feldmannDirect mail has become a polarizing topic in the nonprofit fundraising world. Many bloggers and development veterans feel that it's one of the most important tools in the fundraising toolbox. Others – many of them focused on targeting a younger demographic – want to change or do away with the practice altogether.

For what it's worth, approximately 90 percent of the direct mail I receive winds up in the recycling bin, unopened and barely glanced at.

And I'm not alone. For many new and younger donors, direct mail is viewed as intrusive, messy, and a waste of resources. So why do so many organizations continue to embrace it? The answer is simple: It works.

According to the 2012 Channel Preference Study from Epsilon, a full-service ad agency headquartered in Irving, Texas, more than seven out of ten (73 percent) consumers said they prefer direct mail for brand communications, in large part because it allows them to consume information at their convenience. Okay, so that only demonstrates direct mail's relevance to brand and product marketing. What about fundraising?

Well, here again, recent studies show that direct mail works. For example, Blackbaud's 2012 Charitable Giving Report found that 93 percent of overall giving comes from traditional fundraising methods, with online giving accounting for the rest (7 percent).

It's a paradox. For most people, direct mail is utterly annoying, and yet it still gets the job done.

Does that mean fundraisers should ignore the preferences of their donors, especially the younger ones, and hold on to the practice for dear life, acting on what donors actually respond to rather than what they say they want?

I'm not so sure. Traditional industries of all types and sizes are being disrupted by new, innovative business models based on digital technologies. Take a look at these examples and see if you can spot the common denominator:

The problem: Plastic water-filter pitchers are heavy and break easily, and the filters aren't completely recyclable.

The solution: Soma Water makes water pitchers that, in terms of aesthetics and durability, leave competitors' products in the dust. The filters are made entirely from biodegradable materials, including coconut shells, silk, and a plant-based casing. And instead of tired old non-biodegradable plastic, Soma carafes are made from a shatter-resistant glass. The water pitcher was a consumer item in need of a makeover. Soma came along and made it better. Much better.

The problem: Cable TV is expensive, and late fees and limited selection make DVD rentals an unattractive option.

The solution: Using Netxflix to stream your favorite TV shows and movies is rapidly becoming the preferred way for Americans to consume digital media. The company is leading the charge away from physical DVDs and the traditional cable package and into an "unbundled" future where all our digital entertainment options are available on demand at a reasonable price from the cloud. Hello couch, goodbye $200 cable bill.

The problem: Good razors are expensive, and you can never seem to find a new one when you need it.

The solution: The Dollar Shave Club makes shaving both cool and convenient. For a few bucks a month, the Web-based service – which burst on the scene with a hilarious video that went viral – will send a supply of razors to your door.

What do these three examples from the world of business have to do with direct mail and fundraising? For starters, each of them is built on a new business model grounded in a heretofore unidentified market opportunity, an entrepreneurial embrace of digital platforms, and the concept of sustainability. All three also have been well received by millennial consumers.

The nonprofit sector is no stranger to digital. Organizations in the sector have been migrating their print-based communications to digital channels for years, and online fundraising continues to grow in popularity. Direct mail? Well, it works and continues to serve a purpose. Which doesn't mean it isn't ripe for disruption. Indeed, we shouldn't be surprised as organizations like the American Cancer Society opt to do away with it for certain fundraising campaigns and appeals.

I don't know about you, but I'm keeping my eye out for organizations that have decided the time is right to disrupt this most traditional of fundraising techniques. At the end of the day, we all want the same thing: to engage donors in the good work our organizations do and provide them with an experience that leaves them satisfied and feeling connected to something bigger than themselves. Do we need direct mail to do that? Maybe. But I wouldn't bet on it.

Derrick Feldmann is president of Achieve, a creative research and campaigns agency based in Indianapolis. In his previous post, he explored what it means for a nonprofit to be "relevant."

Comments

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Thanks for the post.
I don't question the relevance of direct mail. I question the purpose, the strategy and more. There are several questions I have when organizations send a lot of direct mail, but the main one is: "To what end is this mailing being done?" Outside of a robust, relational strategy I think direct mail is a waste of money.

Millennials may be embracing Netflix to stream entire seasons of Breaking Bad, but if the millennial is a fan of World Cup soccer or NFL football, he'll likely still want good old cable TV. In other words, some of these so-called innovative solutions often replace apples with oranges; they give you something good, but don't give you the same thing. A non-profit with a great website should be proud of having a great digital presence, but that doesn't replace a mailbox presence.

Thanks Derrick for the post. I agree with you at most of the points raised by you in here.

I agree it depends on the demographic you are marketing to, so diversifying your appeals is still the best solution - our demographic has a higher percentage of 65+ so direct mail works extremely well for us, plus in focus groups our donors noted that they preferred this method of appeal, however, we also use our website, person to person, facebook and twitter - appealing to the younger demographic that prefers that method of appeal.

Agreed on the diverse tactics approach, again in relation to what your constituents want and expect. I will say that I'm seeing, in general, more alumni of our organization continue to respond to direct mail than I would have expected. Also hear regularly from 25-45 that they don't want to be called (the telemarketing star has faded much more quickly for us), leaving print and e-mail as the primary means for education, engagement and solicitation. I don't see the demise of direct mail anytime soon, although it may lose market share. If anything, I'm seeing more alumni migrate to direct mail (particularly for giving) as they mature rather than the reverse.

Isn't young donor an oxymoron

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