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The Death Of Direct Mail

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Talk at the International Fundraising Conference about the coming problems for fundraising direct mail

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The Death Of Direct Mail

  1. 1. The Death of Direct Mail David Dixon Director, The Phone Room
  2. 2. The Death of Telephone Fundraising David Dixon Director, The Phone Room
  3. 3. The Death of Direct Marketing David Dixon Director, The Phone Room
  4. 4. The Death of Direct Mail David Dixon Director, The Phone Room
  5. 5. Vote Now! – Mail Volumes in Next 10 years
  6. 6. Vote Now! – Mail Response Rates in Next 10 years
  7. 7. Worst Case Scenario! Volume Response Rates
  8. 8. David Dixon <ul><li>20 years in fundraising </li></ul><ul><ul><li>Nicaragua Campaign,Oxfam, Oxford Playhouse </li></ul></ul><ul><li>Consultant on fundraising and donor development </li></ul><ul><li>Founder/Director of The Phone Room </li></ul><ul><ul><li>Fundraising, ticketing, marketing </li></ul></ul>
  9. 9. Dorothy Donor
  10. 10. <ul><li>Generational Change </li></ul>
  11. 11. New Media <ul><li>Voice over Internet (VOIP) </li></ul><ul><li>Videophones </li></ul><ul><li>IMS </li></ul><ul><li>Interactive TV </li></ul><ul><li>SMS/MMS </li></ul><ul><li>Mobile phone wallet </li></ul><ul><li>Blogs </li></ul><ul><li>i-mode </li></ul>
  12. 12. The Adoption cycle
  13. 13. <ul><li>Technological Change </li></ul>
  14. 14. The Race to the Bottom ROI Volume Break even
  15. 15. <ul><li>Marginal response rate at high volume </li></ul>
  16. 16. Direct Mail Under Attack Direct Mail New Media New generation Marginal response rates
  17. 17. Malcolm Gladwell The Tipping Point
  18. 18. The Tipping Point <ul><li>We expect change to be gradual </li></ul><ul><li>Change is often sudden and dramatic </li></ul><ul><li>E.g. adoption of e-mail </li></ul><ul><li>E.g. murder rate in New York </li></ul>
  19. 19. The Tipping Point in Mail Profitability ROI Volume Break even 1) Small fall in response rates 2) Makes all this volume uneconomic
  20. 20. What about the Telephone? <ul><li>Telephone is non-generational </li></ul><ul><li>Telephone (voice) is integral to new technologies and has become ubiquitous in last 10 years </li></ul><ul><li>The race to the bottom has barely begun </li></ul><ul><ul><li>The telephone is not under attack </li></ul></ul>
  21. 21. Telephone still to reach middle-age Telephone New Media integration All generations Response rates still high
  22. 22. The Telephone and New Technology <ul><li>The Telephone is Integrated ! </li></ul><ul><li>Current 3G devices are poor, but the next generation will soon change the way we communicate….. </li></ul><ul><li>… ..as mobile phones and e-mail have done for this generation. </li></ul>i-mode
  23. 23. The Importance of Donor Loyalty <ul><li>Lifetime value increases </li></ul><ul><li>Profitability of acquisition is improved </li></ul><ul><li>Security of income is enhanced </li></ul><ul><li>Access to donors for purchase, campaigning, volunteering etc. </li></ul>
  24. 24. What Drives Loyalty? <ul><li>Satisfaction with service </li></ul><ul><li>Appropriate communications </li></ul><ul><li>Trust </li></ul><ul><li>Sharing the beliefs </li></ul><ul><li>Having a personal link </li></ul><ul><li>Having a deepened understanding </li></ul><ul><li>Having multiple engagements </li></ul>Adrian Sargeant, Bristol Business School
  25. 25. Increasing Loyalty means CRM <ul><li>Inform & inspire </li></ul><ul><li>Accurate donor information </li></ul><ul><li>Respect donor’s wishes </li></ul><ul><li>Develop personal relationships </li></ul><ul><li>Customer Service is crucial </li></ul><ul><li>Cross-sell </li></ul><ul><ul><ul><ul><ul><li>Be donor-centred </li></ul></ul></ul></ul></ul>
  26. 26. Seth Godin Permission Marketing
  27. 27. The Ideal Donor Department <ul><li>Is media neutral </li></ul><ul><li>Is Donor-centred </li></ul><ul><li>Integrates all data and media </li></ul><ul><li>Focuses on lifetime value </li></ul><ul><li>Manages multiple engagements </li></ul><ul><li>Uses technology to emulate major donor fundraising </li></ul>
  28. 28. The Problem for Donor Programmes <ul><li>Direct mail dominates direct marketing </li></ul><ul><li>Most direct marketing gurus are really direct mail specialists </li></ul><ul><li>Most strategists in NFPs and agencies are direct mail specialists </li></ul><ul><li>Majority of direct acquisition budget is allocated to mail </li></ul><ul><li>Most donor lists are mail generated </li></ul>
  29. 29. Direct Mail Distorts Investment <ul><li>Over-investment in Mail compared with other media </li></ul><ul><li>Over-investment in donor recruitment vs. donor development </li></ul><ul><li>Focus on the medium not on the donor </li></ul><ul><li>Under-investment in integration </li></ul><ul><li>Under-investment in technology </li></ul>
  30. 30. Charles Handy Murphy’s Bar
  31. 32. IMHO <ul><li>Direct Mail effectiveness will decline </li></ul><ul><li>The decline will be rapid and could be sudden </li></ul><ul><li>The phone will grow in importance </li></ul><ul><li>So will all new media </li></ul><ul><li>Donor development will become more important as acquisition becomes more difficult </li></ul><ul><li>The future lies in integrated contact centres </li></ul><ul><li>The donor will drive direct marketing, not the mail programme </li></ul>
  32. 33. Contact David Dixon [email_address] www.phoneroom.co.uk

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