Ted Grigg's Reflections about Direct Marketing

Traditional media still rule in most companies’ budgets. But the day is coming when that may no longer be true.

For example, Jeff Brooks makes the point in his fundraising blog “Direct mail: news of its death may be premature” that direct mail is changing, but that it is far from dead. He says:

“Online is coming up behind it. Fast. Nearly every nonprofit fundraiser is now raising meaningful amounts of money online. Even if they aren't trying very hard.

So you need to be thinking ahead. As a response medium, direct mail is losing ground to online. That change is likely to accelerate in the coming years. If you aren't getting good at raising money online now, you may find yourself suddenly in a world of hurt in the not-too-distant future.”

I believe that most of us in the direct marketing field concede that online is here, it’s growing fast, and we need to inculcate our deep knowledge of what makes people respond into this emerging medium.

The rise and fall of various media normally causes no alarm to direct marketers. Direct marketing strategists are media agnostic. We routinely test in and out of media.

But here’s the rub. Do you think companies really care that you know how to make traditional media work? I contend that most companies do not see the intimate relationship between the direct marketing strategy and their desire to leverage the online medium.

Highly experienced direct marketing strategists, however, believe that online was made to order for direct marketers. Online represents the ultimate opportunity for CRM and one-to-one marketing. It embodies the ideal interactive medium direct marketers have dreamed about for years.

So what’s the problem? Here’s part of what I wrote to Jeff Brooks in response to his blog (with a few edits).

The productive copywriters in direct marketing and fundraising cut their teeth on direct mail and other traditional media.

Does their hard earned knowledge in traditional media make them obsolete now that online has become the media with tremendous expansion opportunity? Are these proven and experienced direct response copywriters really in the best position to help nonprofits or companies as a whole maximize the power of online marketing?

I think most organizations would say that they would prefer to hire someone with 3-5 years of pure online marketing experience rather than the proven direct response copywriter with 15+ years of experience who has little hands on experience with online marketing.

That seems to represent hiring managers’ typical mindset not only for copywriters, but at one degree or another, they also apply this philosophy to all direct marketing functional areas.

Your take on this?

As one of its goals, this blog site explores trends in the direct marketing discipline. One such trend is the fast growing importance of the email media channel.

This phenomenon affects every industry, but at different speeds.

The growth of spam, unfortunately, has grown even more rapidly than email marketing. Spam has severely constrained the growth and effectiveness of the channel. In fact, email marketing has not delivered on its original promise as the low cost and most efficient acquisition channel for many marketers.

Opt in and double opt in as well as the growth of registration schemes reflect the industry’s effort to legitimize email marketing both as a an acquisition and retention tool.

Spammers will ultimately prompt more restrictive government regulation as a way to control the abuse. But it is unlikely that future regulations or even technology will control the spam curse.

In spite of these challenges, marketers have given email a significant role in their retention programs. Once a relationship is established, companies successfully build that relationship with ongoing email contact. No other medium offers better cost efficiencies, speed and personalization as the email medium for this specific application.

On the other hand, the low cost of entry into email marketing combined with the abuse of spam have increased the allure and pulling power of its older cousin --- direct mail.

In a November 1, 2007 FundRaising Magazine article entitled “What Does Your Board Need to Know About Direct Mail?” the writer, Willis Turner drew this conclusion.

“Even in this e-mail age, direct mail remains the foundation of a strong fundraising program. The surprising industry study shows Generation Y, the youngest generation of donors — those who theoretically are the most computer-savvy — actually is the fastest growing group of direct mail readers.

Direct mail is even the preferred choice of e-mail donors. A study by McPherson Associates showed that of people who first contributed online, 70 percent renewed. But of that 70 percent who renewed, 80 percent renewed by mail. And, according to an InfoTrends, Research Group study, nearly 70 percent of people prefer direct mail to e-mail or phone-based marketing.”

Traditional media continues to contribute significantly in the multichannel strategy. The wise marketer will remain media agnostic responding to the needs of his target audiences and drawing conclusions only after rigorous testing.

 

It is well known that successful fundraising direct marketing leaders have contributed much to the direct marketing industry. No industry depends more on advanced direct marketing strategies to fund their futures than nonprofits.

In an October 17 issue of FundRaising Magazine, Jeff Brooks wrote a thought-provoking article entitled “The Enlightened Path for fundraisers.”

He talks about how donors have changed. In the commercial world, we think of how customers have changed.

This blog shows how those donor changes apply similarly to commercial customers.

Brooks starts by making this declaration.

“Donors are changing. They’re asking for more involvement with the charities they support. They need to know and feel their giving makes a difference. They want more information and more connection.”

In the same way, today’s customers depend on other customers for feedback and recommendations on products they are considering. They want to connect more with the companies they support with their purchases. Hence the tremendous growth of company sponsored blogs and forums.

As with donors, an organization’s most important customers want to connect with companies at the emotional level. Just consider the Apple computer brand. There is nothing more demonstrative of emotional attachment than the Mac fan.

The author continues his theme by elaborating on how nonprofits should respond to today’s changing donor base.

“The Old Way: Nonprofits harvest gifts from donors.

The Enlightened Way: Nonprofits cultivate relationships with donors.
Think of donors as people you get to know, not just assets you own. Asking for gifts is just one reason to communicate with donors. You also can encourage them to talk back to you — about what they care about and how they want to be treated. You also should be reporting back to donors about the impact of their giving.”

Any business today thinking that they are done once the product is sold will not survive. CRM leaders understand the critical need to cultivate customer relationships with liberally applied warranties, proper customer service and genuine appreciation.

“The Old Way: The development department does the fundraising.

The Enlightened Way: Everyone is responsible for fundraising.
 In most nonprofits, the program side (those responsible for carrying out the  organization’s mission) and the fundraising side (those responsible for  getting the money to pay for the  work) are completely separate. In  many cases, they don’t even speak the same language.”

How often have marketing bloggers, business schools and think tanks referred to the destructiveness of silo marketing? Though this criticism refers primarily to uncoordinated communications to customers and prospects, it also alludes to a lack of coordinated goals between divisions and departments.

Customer sales and customer satisfaction relies on the cohesion of the entire organization to support any successful effort. Speaking with one voice does not refer only to brand unity, but also to unity in corporate behaviors that develop long-term customers and customer advocates.

“The Old Way: Nonprofits raise general funds and allocate according to their own needs and judgment.

The Enlightened Way: Donors fund projects and areas of their own choosing. Donors seem to be getting more specific all the time. They want to be able to see the difference they’re making. That’s why we need to give them choices about where their dollars go. That’s a tough order for nonprofits that rely on general donors for the operating dollars that keep them going. But more and more, donors demand choice, and they’re likely to avoid charities that can’t give it to them.”

Developing donor appeals that allocate funds into activities that most interest the donor reminds me of products that must be customized to customers’ special needs and requirements. More than ever, today’s technology allows more organizations to customize at the individual level. Digitized printing, for example, can now modify each printed piece delivered to recipients based on their individual needs.

Does this take more sophistication and costs to support? Yes, it does. But the trade off is a more competitive product that customers are often willing to pay more for to get.

What other things can we learn from fund raisers? I’d love to have your comments on this or any other part of this blog.