Show me the Money!

In light of the continued expansion of digital marketing technology and increased adoption of online giving, many not-for-profit organizations are wondering if direct mail is perhaps outdated, dead or dying. Flat to falling direct mail response rates year-over-year paint a picture that it may be. Yet, a closer look at the data tells us a much different story.

Online and white mail giving is on the rise for many organizations. With digital media advertising more integral to the overall marketing mix, channel attribution is harder and harder for organizations to nail down – making budget discussions more challenging.

Is website revenue driven only by digital marketing endeavors, or is direct mail also influencing online giving? How can we know? If direct mail is driving online and white mail giving, the ROI for direct mail campaigns would be better than coded response rates alone may show. A worthy investigation!

Brewer Direct and research partner Analytical Ones set out to learn how much revenue a direct mail appeal may actually be generating online and via white mail – but not getting credit for – through a match-back analysis.

We also set out to measure the seasonal and geographical variation of match-back revenue across a number of Rescue Mission clients to determine whether, as a direct mail partner, the Agency could reasonably forecast a “match-back” lift for clients to its campaign projections and reports.

A Match-back Analysis looks at the donors/prospects targeted via direct mail and then matches those donors to the donations that came in through other channels (ex. online and white mail) within a set period of time corresponding to the campaign mail date. The goal of the study is to see if any of the donors to whom you sent a direct mail appeal made a gift through another channel.

For the purposes of this analysis, match-back revenue was defined as an online or white mail gift from a donor who received a direct mail piece within a specific date range. The match-back window used was the in-home date of the appeal being analyzed to the in-home date of the next mailing. Match-back lift was calculated by dividing the match-back revenue by the coded direct mail revenue from that appeal.*

*For example, if match-back revenue was $50,000 and direct mail coded revenue was $100,000, the “lift” would be 50%.

Factor #1: Organization size

Large organizations were defined as those with an annual budget greater than $1 million and a donor base of 50,000 or more. Small organizations had an annual budget under $500,000 and a donor base of 10,000-15,000.

In general, large Rescue Missions saw a higher match-back lift than small ones, with an average total match-back lift, throughout the year, of 32% compared with 11%.

Looking solely at online giving, large organizations saw a match-back lift of 16% versus 6% for smaller organizations.

GREATER IMPLICATIONS

While being a large Rescue Mission – with a more sizable, mature donor file – certainly contributes to these organizations’ higher match-back lift, there are greater implications.

Many larger organizations already have cross-channel donors, which adds to their lift as these donors are likely exposed to messaging via multiple touchpoints (mail, online, out-of-home, broadcast, etc.). Another consideration is that larger organizations are often located in larger cities, where a donor base may be more diverse, younger and possibly more comfortable making online transactions.

A word of caution: Gift attribution can be unclear. If an organization is running online advertising during the same time their donor receives a mail piece, this will add to the complexity of attributing the donor’s gift to the touchpoint that sparked their response.

THE TAKEAWAY

Organization size is important, but cross-channel communication, which a larger organization is more likely to have, matters most. It’s critical that organizations of any size have a multi-faceted, integrated messaging strategy. They must be ready to adapt to reach donors via multiple channels, as well as those younger donors who may be more comfortable responding online (and thus migrate across channels), even if the initial point of contact came via direct mail.

Factor #2: Geography

Interestingly, Rescue Missions in the West and East exhibited a notably higher online and white mail match-back lift than those located in the Midwest. Missions located on the West Coast saw a higher online-only match-back lift than other regions, especially in November and at year end.

THE TAKEAWAY

Donor giving trends vary for a multitude of reasons – one of those being where they live. Variance suggests that while geography is an important factor, it should be evaluated alongside others, especially seasonality.

Factor #3: Seasonality

Fall is the time of year in which the highest percentage of annual charitable giving occurs. Our match-back lift analysis also reflected that trend.

On average across the six participating Rescue Missions, the match-back lift at year end more than doubled the direct mail attributed revenue, with a lift of 118%. One Rescue Mission saw a match-back lift as high as 290% at year end!

Online giving in November hit a 24% match-back rate to direct mail, while online match-back to the year end appeal reached 67%. White mail saw a similar match-back lift at year end (61%), while outside of year end, it consistently measured between a 10-20% lift.

May was another top-performing month, with a lift of 19%, when several Rescue Missions had a matching appeal offer. November and January were also noteworthy, each with a total match-back lift of 21%.*

*We found it valuable to analyze match-back lift for total online and white mail gifts together, as well as individually. For example, one large Rescue Mission in this study saw a 75% total match-back lift in January. Yet, their online match-back lift was just 8%. This direct mail appeal was a traditional partnership renewal offer with an engagement/appreciation device enclosed.

It was interesting to see that white mail gifts surpassed online giving in the match-back analysis – which could lead to further hypotheses about donor demographics, creative approaches and white mail giving.

THE TAKEAWAY

Match-back revenue follows the same seasonal trends as mailed-in revenue that is directly attributable to an appeal. While there were variations of match-back lift by region and size of Rescue Mission, appeal seasonality affected white mail and online lift rates very similarly across all regions and organization sizes. Fall and year end campaigns had significantly higher lifts than other parts of the year.

The Final Takeaway

A match-back analysis sheds light on how your donors are responding within the multi-channel marketing environment. In particular, match-back rates in this study revealed a considerable amount of revenue is influenced by contact through direct mail. Additionally, in terms of organization size and geography, we can observe that more donors happen to give online in larger organizations and in some regions.

Your marketing dollars are precious. Whether you are chasing gross revenue and more active donors, ROI efficiencies or optimizing both, it is important to be informed as to how your marketing dollars are being put to work and how much revenue is coming in.

A match-back lift discussion, with respect to a review of your campaign projections and results reporting, can help you better understand your return on marketing dollars spent. This, in turn, can help inform and optimize marketing decisions moving forward.

Want more? For this month’s “Need to Read” from MT on Healthy Leadership: The Ministry Within, click here.