June 3, 2011
Direct Mail Dominates Online Giving
Target Analytics’ newly release benchmarking report for online and multichannel giving shows direct mail continues to dominate online giving, generating nearly 80% of gifts.
For the large direct marketing organizations participating in the online benchmarking groups, the majority of gifts are still received through direct mail.
Although direct mail remains the dominant channel for new donor acquisitions as well, it has become increasingly common for new donors to give their first gift online.
Online-acquired donors are significantly younger and tend to have higher household incomes than mail-acquired donors.
Online-acquired donors tend to give much larger gifts than mail-acquired donors. However, online-acquired donors tend to have slightly lower retention rates than mail-acquired donors.
In aggregate, online-acquired donors have much higher cumulative value over the long term than traditional mail-acquired donors. However, long-term value varies depending on the donor’s origin gift level. The substantially larger gift amounts given by onlineacquired donors can mask issues with retention. Multichannel giving is not ubiquitous. The majority of multichannel donors are those who are acquired online and then subsequentl start giving direct mail gifts. This is the only situation in which there are significant numbers of cross-channel donors across all organizations.
Every year, large proportions of online-acquired donors switch from online giving to offline sources — primarily to direct mail. The reverse is not true, however; only a tiny percentage of mail-acquired donors give online in later years.
When online-acquired donors move offline, they tend to do so soon, in their first renewal year. They then continue to give offline in similar proportions in subsequent years. Eventually, just under half of all online-acquired donors convert entirely to offline, primarily direct mail giving. Robust direct mail programs drive up the retention and long-term value of new donors acquired online. Without the ability to become multichannel givers by renewing their support via direct mail, this group of donors would be worth far less. Other than monthly recurring giving programs, established direct mail programs are the best method for gaining repeat gifts from online acquired donors.
When online-acquired donors move offline in subsequent years of giving, it does have some negative effect on their value in the renewal year. The higher the donor’s original gift level, the less they upgrade and, in fact, the more likely it is that the donor will actually downgrade if they move offline. However, these lower gift amounts are far outweighed by the higher retention of onlineacquired donors provided by the direct mail channel.
For the consistent givers who comprise the majority of donors already on file, the presence of past multichannel giving is generally not a significant factor in predicting future retention or long-term value. Traditional RFM factors are far more predictive.
Download the full report.