educated guesses about the impact of a traditional advertising campaign, the customer response to most forms of direct marketing can be measured and direct - response marketers rolling out an expensive campaign are now in a position to predict with a high degree of accuracy the response that will ultimately be achieved.
So, what do we mean by direct response? The Direct Marketing Association (DMA) defi nes it as “ an interactive process of addressable communication that uses one or more advertising media to effect, at any
location, a measurable sale, lead, retail purchase, or charitable donation, with this activity analyzed on a database for the development of ongoing mutually benefi cial relationships between marketers and customer, prospects, or donors ” (DMA, 2009a, p. 2). Direct response is characterized by four primary elements (DMA, 2009b):
- An offer
- Suffi cient information for the consumer to make a decision about whether to act
- An explicit “ call to action ”
- A means of response (typically multiple options such as a toll - free number, Web page, and e - mail)
The term thus embraces direct mail, direct - response press advertising, direct response television advertising, telephone fundraising (or telefundraising), and most forms of digital fundraising, including the use of e - mail and text messaging. It will be impossible to do justice to all these forms of communication in one chapter, so we instead focus here on what many professionals refer to as the traditional direct marketing media and save a discussion of fundraising through electronic channels for the next chapter.
There are two distinctive forms of direct response communication — one intended to attract new members, donors, or subscribers, and the other to solicit these individuals again for further support or, in the case of
sustained givers, to keep them in touch with the work of the organization. These two types of communication are very different from each other. As one of the sector ’ s leading authorities on direct response, Mal Warwick (2004, p. 16), notes, “ it ’ s the difference between [soliciting] the love of friends and the casual kindness of strangers. ” In this book we refer to these two forms of communication as donor acquisition and donor development communications. The terms donor resolicitation and donor renewal are also commonly used for the latter activity, but we prefer the word development because it implies the existence of a relationship rather than a series of exchanges.
Cornerstones of Direct Response
Holder (1998) argues that direct marketing comprises four components: continuity, interaction, targeting, and control . Continuity contrasts with the approach of “ mass marketing, ” in which contact with a donor is standardized and regarded merely as a series of one - time exchanges. All customers are treated alike, and very simple, “ give now ” messages are employed to stress the urgency of a situation and thus the necessity of giving or renewing. The emphasis lies in maximizing the immediate return on investment (ROI), and budgets
and communication strategies are developed accordingly.
In direct response, the goal is to use customer information to develop an ongoing relationship with each individual in the database. Direct response fundraisers recognize that it is not essential for the organization
to make a profi t on each communication with a donor, provided that over the full duration of the relationship a respectable ROI can be generated. Thus the costs of recruitment become less of an issue for direct response fundraisers as they recognize the future potential (or lifetime value) that will accrue from each donor. Indeed, the concept of donor lifetime value lies at the core of successful direct response activity and drives both what the organization is prepared to spend on recruiting each new donor (the allowable cost per donor) and what it is prepared to spend on developing a relationship with those donors over time.
The interaction component of direct marketing emphasizes the fact that direct channels afford fundraisers numerous opportunities to engage the customer — creative opportunities that are far superior to those that would be available through traditional channels. A mailing for a visual impairment charity, for example, contained an appeal to raise funds for cataract operations, including a photograph of a victim and a response mechanism (and reply envelope), but also a small piece of frosted Perspex (hard plastic) that the recipient could hold up to his or her eye, look through, and get a sense of what it is to see the world through cataracts. This is a wonderfully powerful and creative example of direct mail at its best!
The concept of targeting stresses that direct response activity is characterized by a unique ability to use lifestyle lists to target donors or potential donors with increasingly relevant communications. Once donors have been recruited, information about their behavior can be used to develop ever more refi ned communication in the future. Donors who want to give only once a year can be solicited only once per year, and donors who are interested in just one aspect of the organization ’ s work can be addressed only with communications that focus on that interest.
The control component of direct marketing draws attention to the ability of direct response fundraising to pretest almost every dimension of a direct communication. In the case of the visual impairment mailing described earlier, for example, the nonprofi t could conceivably have tested the impact of the following:
- Including or not including the hard plastic Perspex
- Including or not including the photograph
- The presence of a message on the envelope
- The choice of colors to appear in the cover letter
- The impact of asking the donor for a specifi c sum (for example, $ 20 buys an operation to restore her sight)
In practice, perhaps three or four versions of a mailing might be developed and mailed to a small sample of the database. The pattern of response can then be assessed and the most effective version of the mailing
can be rolled out to the remainder of the donor or prospect base. Not only does this test allow an organization to select the most appropriate mailing, but it also allows the organization to predict with a high degree of accuracy the performance of the overall campaign. It is these four elements that combine to make direct response a unique discipline within marketing and fundraising.
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