Being a face to face fundraiser in LA, Chicago or New York really stinks. Your colour-coordinated outfit and Ipad is simply no match for the drunks, junkies, and hookers who long ago staked out the best street corners and who defend their turf with zeal.
Being a media buyer for a charity using DRTV to recruit monthly donors in the US is even worse. 1 “tarp”, or enough ads to reach just 1% of your target market, can cost $1 million. You need $10 million just to “test” DRTV as a tool to recruit monthly donors.
It’s been like that for over 20 years. That’s why a long time ago US charities learned how to use direct mail to acquire monthly donors with tremendous success. Hundreds of US charities bring in over $1 million a month from monthly donors – acquired by direct mail. It’s a simple technique, but requires looking at both direct mail – and regular giving – in a completely different way.
Here in Australia, the average age of a cash direct mail donor is about 70 years old. The last thing people that age want is something that automatically debits their savings each month. That’s why when charities try to convert cash direct mail donors to regular giving, they often get a low response rate.
So Bill Them Later
To get around this problem, many charities simply offer their direct mail cash donors a monthly “billing” option for their regular monthly gifts. They do not force the donor to hand over their credit card or direct debit details. Instead, each month they send the donor a “reminder”. It’s also a great opportunity to share news and the latest updates on your work.
If you have a donor’s credit card or direct debit details and you run their monthly pledge through each month, you usually get a 90%-99% “response rate” depending on the donor’s tenure.
When you send the donor a monthly reminder, and you leave it up to the donor to decide each month, you don’t get anything close to a 90% response rate. It’s more like a 40%-60% response rate.
In other words, you can mail these donors 12 times a year, and get a 40%-60% response rate. And you can send donor care to your heart’s delight each month too!
This dramatically increases the lifetime value of cash direct mail donors by simultaneously increasing the response rate to each appeal, and increasing the mailing frequency to 12 times a year.
Some people may look at a “bill me later” option for regular giving as a “glass half empty”. But just run the numbers and it becomes very obvious, very quickly that it is indeed a really big glass full of millions of dollars just waiting to be raised.