Everyone said they were crazy when the American Cancer Society announced they would stop direct mail acquisition.
A huge decision given they mail 41 million piece of acquisition mail. In 2012, they spent $10 million to generate 252,000 new donors through direct mail acquisition.
But it kind of sounded like they had good reasons for making that decision. So despite the naysayers, I always think it’s courageous to try something different.
Eighteen months after making that decision, ACS reinstated their direct mail acquisition program.
But the upshot is that:
- New donors down by 11 per cent
- New donor revenue down by $11.3 million
- An estimated $29.5 million drop over the next 5 years
- The finding that digital and email channels cannot replace direct mail.
What’s interesting to me is not the drop in new donors and new donor income.
It’s the impact that dropping direct mail acquisition has on other programs. The article from the Non Profit Times highlights the following:
- Acquisition is needed to feed the core audience or else the entire program loses profitability
- The renewal program experienced a negative impact
- A drop of $25 million for ACS’ Relay for Life
- The unknown impact on planned giving.
Fewer new donors means fewer bequest prospects.
And fewer monthly giving prospects.
And fewer major donor prospects.
That’s something to think about.
Especially since ACS says every $1 spent on direct mail acquisition brings in another $7 within three years.
For those of you that don’t do direct mail acquisition…
Don’t think this does not apply to you.
The other big lesson here is not just related to direct mail acquisition but to ANY kind of acquisition that’s working.
And that is…
Don’t cut a major acquisition channel until you’re certain that another channel can replace it!
Very, very certain.
Not all organisations do direct mail acquisition simply because they’re too small to make the numbers work. Or they’re not ready to cope with a big influx of new donors.
I know of one charity that was acquiring new donors successfully through a specialised type of event.
And they weren’t just acquiring single gift donors… but monthly givers.
But because these events were expensive, the Board cut this form of acquisition in favour of cheaper alternatives… even though the alternatives had not been tried, tested or proven to work.
How crazy is that?
This charity is now struggling financially. Although this decision was not the only contributor to their financial issues, it’s clear they’re not acquiring new donors at the same level.
The “cheaper alternatives” have turned out to be very costly.
So please, at least try out your proposed new methods of acquisition alongside the old ones to see if they work first.
But to be honest, I wouldn’t cut a major acquisition channel if it was working.
As long as the lifetime value and ROI was acceptable, I’d argue hard to retain the channels that are working and instead develop multichannel acquisition.
Especially since many donors now use multiple channels to communicate with your charity.
And the more ways you have of bringing new donors into your organisation, the better.