Myth 5: ‘Direct mail is too expensive’

Myth 5: ‘Direct mail is too expensive’

But what is the actual cost of direct mail if you ignore it?

More and more charities feel direct mail is too expensive and too complicated. As a result, they do not use it (anymore) and opt for ‘cheaper’ alternatives such as e-mail. However, not including direct mail in your fundraising efforts could be a costly mistake.

Is direct mail expensive?

We do not deny that direct mail has its challenges. Response rates are falling, postage costs are rising, and paper and printing are increasingly expensive. The total cost of attracting a donor has risen, and direct mail is an expensive resource if used incorrectly. So yes, it is more difficult that it used to be to make direct mail work for you. Yet, we still are still using direct mail for our customers, and with success.

This is because direct mail brings highly valuable donors – if you look beyond the short-term returns only. 

Where does the myth come from?

Direct mail requires a lot of knowledge if it is to be used successfully. Knowledge of data, creation, production, and processing. Many organisations do not have this knowledge, meaning direct mail campaign fail to deliver the results they could. It makes sense then that the main focus is on costs, creating the illusion that direct mail is a bigger investment than, say, an online campaign.

What’s more, there is a persistent belief among fundraisers and board members that direct mail no longer works. That it is outdated. That nobody reads their post anymore. 

And so, many organisations disregard direct mail. Particularly smaller organisations no longer even consider it.

However, not including direct mail in your fundraising efforts could be a costly mistake.

Direct mail helps you find and retain those valuable donors

If you look beyond the initial costs and instead apply the right knowledge to using direct mail, you will see that recruiting and retaining donors via direct mail can be very worthwhile.

After all, direct mail puts you in contact with:

  1. Potential major donors. Most major donors start out as ‘ordinary’ donors making their first donation in response to direct mail.
  2. Potential bequest donors, donors who are considering leaving a gift to your foundation in their will.

Include these figures in your strategic decisions.

It is mainly older donors who respond to direct mail. This has always been a fact, and it still is. It might not sound very exciting, but these are the people who could become loyal donors who give more often and give more. And some of these become major donors and leave a bequest in their will.

All good reasons to treat your new donors well. This means:

Direct mail is the perfect vehicle to do all the above.

Your Life Time Value is many times higher with direct mail

Even if only a small proportion of the donors you gained through direct mail include a bequest in their will, your Return on Acquisition (ROA) and Life Time Value (LTV) will be significantly higher than through other means.

How to debunk the myth

Be patient.

It goes without saying that your fundraising campaign should break even within a reasonable timeframe, that you should keep an eye on the costs per donor, and that your campaign’s ROI should be sound. But look beyond the immediate results of your campaign.

Consider the donors’ LTV and the ROA.

An example.

Two organisations each recruit 1000 new donors via direct mail. The ROI on the campaign is 0.4 (meaning they get 40 cents back for every euro invested).

Are you like organisation A? Or like organisation B?

What’s more, the 1% in the example is a cautious estimate. A well-organised bequest strategy that incorporates direct mail can increase the proportion of donors who leave a bequest in their will to at least 5%.

When and how to (re)start utilising direct mail?

In the short term, recruiting donors via direct mail is becoming more difficult and costly for everyone, but don’t let that narrow your perspective.

Reconsider direct mail as a way to recruit new donors and increase giving from existing donors. And develop a multi-year bequest strategy that heavily features a Donor Connection Survey.

Direct mail remains a relevant recruitment channel, as long as you have the fortitude to look beyond the initial investment. It is the method with the best chance of receiving larger donations and a bequest in a will.

Would you like to find out more about bequest communications?

Request the free whitepaper here.

Would you like to find out the potential number of bequest donors in your own database? Use the bequest potential calculator here.

And get in touch for a no-obligation chat.