Hook donors online - but lure them back with direct mail

publication date: Jun 13, 2011
Most donors give through just one channel - direct mail. And even new donors acquired online switch "in large numbers to direct mail giving in subsequent years."

That's not a promo from a direct mail specialist. It's the carefully verified conclusion from Target Analytics' five-year study of 28 large nonprofits with a cumulative total of 15 million donors and over $1 billion in revenue.

Retention, lifetime value better if they switch

The Internet is without doubt a successful acquisition channel, Target says, but it's not effective for retention. Online-acquired donors that start giving through direct mail as well show a significant uptick in their retention and lifetime value when compared to the online-only cohort.

And whether or not donors are giving through multiple channels won't help you predict their value and likelihood of retention. To evaluate that, use the same yardstick direct marketers have used for ages - recency, frequency, and amount.

"It is the ability of online-acquired donors to use another channel - that is, to start giving through direct mail - that significantly boosts the long-term value of this group of donors," said Rob Harris, Target Analytics' director of analytic products and a co-author of the study. "The most successful organizations have integrated online and offline marketing teams and CRM systems to develop effective multichannel communication strategies that can maximize donor value."

Other key findings about online donors include:

  • The majority of gifts are still received through direct mail, although it has become increasingly common for new donors to give their first gift online.
  • Online-acquired donors are significantly younger and tend to have higher household incomes than mail-acquired donors.
  • Online-acquired donors tend to give much larger gifts but have slightly lower retention rates than mail-acquired donors.
  • As a group, online-acquired donors have much higher cumulative value over the long term than traditional mail-acquired donors. However, long-term value varies depending on the donor's original gift level.
  • The substantially higher initial gift amounts given by online-acquired donors can mask issues with retention.

Every year, high percentages of online-acquired donors switch from online to offline giving, primarily to direct mail. The reverse is not true, however. Only a tiny percentage of mail-acquired donors give online in later years.

Download the complete report 

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Copyright, Hilborn Stanois Inc., © 2011-Current. All rights reserved.

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