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The Obama Effect: 20 Takeaways for Multichannel Fundraisers

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by Britt Brouse

The following article, The Obama Effect: 20 Takeaways for Multichannel Fundraisers, is taken from “Cross-Channel Fundraising Tips and Trends,” a high-level study of fundraising marketing by Direct Marketing IQ. The 87-page study, which features direct mail and email stats and trends; winning techniques for premiums, freemiums and donor strings; and  multichannel fundraising best practices, is available for purchase here.

(Oct. 2, 2012) There’s no question that the Obama for America 2008 campaign set a new standard in online fundraising. Of its $750 million raised, half a billion came in online. Let me say that again. Half a billion dollars came in online; that’s 6.5 million small donations, with an $80 average gift, from 3 million donors. Those numbers are staggering. So how did Obama for America do it?

In many ways the campaign was “in the right place at the right time,” meaning it picked up from where Howard Dean’s campaign left off, but now consumers are more comfortable with the idea of giving online than they were in 2004. Obama’s campaign also profited from the onset of new media, like video, social media and mobile technologies, that were not as widely used only a few short years ago. Then, there are the numerous fundraising advantages of a political campaign’s structure, such as constant media attention, huge name recognition, high emotions and quick deadlines to meet.

As much as fortuitous circumstances abetted its efforts, the Obama for America campaign put to use every best practice of online marketing and brought the power of online fundraising to the forefront of everyone’s mind. “As the Obama campaign’s success in raising so much money online begins to enter the consciousness of the public, I think we will start to see more and more people turn online not just to search for information about nonprofits ... but to take advantage of secure online giving opportunities and open up their checkbooks,” comments Mal Warwick, founder and chairman of Mal Warwick Associates, a direct mail and internet fundraising consultancy based in Berkeley, Calif.

Now more than ever, fundraisers should be thinking critically about integrating online into their direct mail strategies. Below, Warwick and other fundraising experts share 20 key best practices and ideas that they’ve taken away from their experiences with multichannel fundraising and Obama for America’s successful campaign.

1. Online no longer cannibalizes direct mail

There is an untested superstition that including a URL in direct mail will cannibalize response. “Early efforts to include a URL in a [direct mail] fundraising appeal were, by accounts that reached my ears, unsuccessful. They depressed response. But I am not entirely sure that that’s the case anymore,” Warwick says. With some studies showing as many as half of all fundraising direct mail recipients going online to learn more about organizations or appeals, Warwick says it’s imperative to include at least a URL in mail efforts and test whether the suspicion of a depressed response is even true.

2. Older constituents are online, too

While the Obama campaign was celebrated for its ability to attract younger constituents, historically, philanthropy has been concentrated in 65-year-olds and up, points out Vinay Bhagat, founder and chief strategy officer of Convio, an Austin, Texas-based software-as-a-service (SaaS) provider for nonprofit marketing and online donations. As more and more baby boomers enter the 65 and older group, direct mail alone may not be enough to acquire and retain these donors.

“The new target audience for new donors is baby boomers, and many of them are not as direct mail responsive as previous generations and are actually conducting more of their business and personal life on the internet,” Bhagat says. “I am not saying that charities should get out of the direct mail business — far from it — but they need to reallocate some of their investment toward the online channel to make sure they have a more long-term way to acquire new donors,” he adds.

3. Online donors are extremely valuable

Compared to direct mail donors, Warwick says online donors tend to give much larger first-time gifts, which, depending on the appeal, can be anywhere from 50 percent to 100 percent higher than a mail or telemarketing gift. Bhagat stresses the importance of increasing your online donor file. “If clients have a direct mail donor base, we seek to help them collect email addresses ... and then try and communicate to and cultivate those people online,” he adds.

4. Multichannel donors are most valuable

“Donors who give through more than one channel ... are invariably more valuable and display a greater degree of loyalty and staying power than donors who give through only one channel,” Warwick says.

Bhagat found in a Convio study that by communicating through two channels, fundraisers could lift frequency by a factor of two and retention rates by around 5 percent to 10 percent. Bhagat adds that inception channel should not dictate future appeals, as online-acquired prospects convert at a healthy rate through the mail. “What we counsel our clients to do is, even if they acquire an online donor, don’t just communicate to them online, but add them to your direct mailstream as well and see how they perform in the mail,” Bhagat advises.

5. Integrate channels

Online is not a stand-alone device; it works best when integrated with mail. “There are very few people who are truly online-only donors and for whom online communications are the only vehicle that’s going to work,” Bhagat points out.

Paul Philips, online fundraising manager for PETA, defines channel integration as not relying solely on the channel that a donor came in through, but sending similar appeals at similar times to similar populations across whatever channel the donor chooses. Warwick agrees that fundraising is most effective when integrated with other channels-specifically direct mail and telemarketing. “I believe that it is that combination of media, integrated multichannel fundraising, that represents the future of our field, not online in and of itself,” he stresses.

6. Build successful landing pages

One common mistake Warwick sees among nonprofits new to online fundraising is the absence of campaign-specific landing pages. “They tend to regard their simple, straightforward donation page as a landing page ... You need to tailor a landing page to each individual appeal, and without that, you are likely to get much lower response,” he describes.

Landing pages also should heavily promote conversion. “When you went to the [Obama] website as a first-time visitor, the very first thing you’d see was a flash page which really tried to motivate you to give up your email address and to convert you from being a visitor to a subscriber,” Bhagat explains.

7. Practice online lead conversion

Karen Taggart, manager of fundraising innovations for PETA, says the method for converting online leads should reflect the appeals the leads came in on, their ages and whether they are third-party acquired leads or direct visitors to the landing page. Leads who come in off timely campaigns, i.e., PETA’s Hurricane Katrina effort, tend to have a short shelf life, and Taggart advises converting them as quickly as possible.

For someone coming in off of a more general appeal, Taggart advises a multichannel approach. “Let’s say we have someone who comes online and signs up to get a vegetarian starter kit ... We might find that person is receptive to a quick online action without an ask, then a thank-you online, then a phone call to check in on how they’re doing with their vegetarian pledge plus an ask and then maybe direct mail,” she details.

8. Fundraisers treat online acquisition like conversion

For acquisition purposes, online gives fundraisers an advantage not found in a more passive medium, like direct mail. “I always think of online donor acquisition as lead conversion, because nine times out of 10, when you have an online lead, you own that lead, because someone has taken an online action,” Taggart comments.

Bhagat agrees that online changes the game for donor acquisition to the advantage of nonprofits. “Historically, the way they’d be prospecting is through list exchange and rentals, and this is a much more economical way to do acquisition because these are people who have raised their hand and said, ‘I am interested in the ASPCA,’ rather than people who may be donating to other related charities,” Bhagat says.

9. A “Welcome Series” converts online leads

Capturing email addresses is the first step to successful online strategy — but then what? Sending a generic email to those leads may turn them away. Bhagat has designed a welcome series with the ASPCA, which capitalizes on the fact that prospects already have raised their hands by registering on the homepage.

“New registrants are put through a filtered channel and are sent four messages that are really designed to get them to convert,” he says. The organization found it was able to convert between 0.8 percent and 1 percent of new subscribers to online donors within about 45 days with those four emails. Then it placed the 99 percent who did not respond to the emails into a direct mail acquisition stream. Within a year, another 4 percent converted to donors through a series of six direct mail asks.

10. Empower constituents online

“One of the biggest lessons about fundraising that I got out of the Obama for America campaign was the importance of engaging donors not just through our typical fundraising asks, but through other types of involvement strategies like blogs, volunteer opportunities and local events,” Taggart shares. Warwick points out the thinking behind this strategy: It is very difficult to reach out to people online and ask them point blank to give money to your cause.

Instead, he says online fundraisers need to use the medium to involve constituents in the work of the organization. Online empowerment is something the Obama campaign executed very successfully as visitors to the website were encouraged to take “grassroots” actions through a number of online tools and networks. One such empowering action supporters could take online was to download a list of potential voters and be on the phone telemarketing to them within minutes.

11. One-to-one messaging is imperative in email

“There is no question that the effort to achieve some degree of verisimilitude online is one of the ways that online fundraising and direct mail are similar,” comments Warwick. “Certainly the personal message, addressed to the individual from an individual, is just as much a necessity online.”

One-to-one messaging is one tactic that the Obama for America’s campaign executed perfectly. The campaign’s communications, whether sent via email, direct mail or mobile, were personalized whenever possible and came from either the candidate himself, his wife Michelle or David Plouffe, the campaign manager. “It made me feel like such an insider. I got the emotion of Obama speaking directly to me, that he knows who I am,” says Taggart.

12. Carefully select the ‘voice’ of the sender

In direct mail appeals, most messages come from the head of an organization, but in email appeals, the sender is visible right away and is as crucial as the message’s subject line. “I don’t think it’s a matter of the message being ‘from the president’ every time; I definitely do not see that working online,” states Paul Phillips, online fundraising manager for PETA.

That the Obama campaign created three or four key communications characters, Taggart says, was a brilliant strategy for varying the messaging and also using voices donors knew and trusted.

As long as it’s someone people know and can relate to, varying the sender interrupts the monotony of the inbox, says Bhagat. “Some charities will go down the route of asking celebrities to make asks for them like St. Jude often does for Children’s Hospital,” he adds.

13. Test text-only emails

Warwick points out that the Obama campaign used a technique that is not widely practiced in email marketing: plain text email messages. “If you received a lot of their email appeals, then you will have noted that a great many of them were essentially text-only, with very little in the way of graphics, and they didn’t often use sidebars with graphics or video on them,” he recounts.

Warwick believes the simplicity of plain text email makes sending email less intimidating for marketers, especially those new to online fundraising, who can reach a larger number of people with their messages without getting bogged down in image and design details.

14. Wrap appeals around newsworthy items

“There are some charities that can use current events and news to motivate a gift ... Especially in this economy, it’s about giving people context and creating tangible opportunities around which they will feel motivated to support you,” Bhagat says.

The Obama campaign made great use of the constant media attention it received, transforming headlines into appeals, but for smaller organizations or those with different areas of focus, a little more creativity may be required. “For a social services group, if there’s a particularly new success story that they’ve published on the impact they’ve had on the community or an individual ... they could use something like that to create a tangible reason to give now,” Bhagat illustrates.

15. Invest in integrated data systems

To support a multichannel appeal, fundraisers will need to invest in data systems integrating mail, email, and other channels and systems. Taggart says PETA continues to work toward an integrated data system to help deliver more timely and relevant donor communications across all channels. “If we have someone sign up online to do a fur-free pledge, then we can follow up with those people whether it’s in the mail, or online, or both, and say, ‘Thanks for pledging to go fur-free. Here’s some extra resources that can help you. And by the way, we’re launching a campaign against Armani, and could you help with a $15 contribution today?’” she describes.

Taggart also encourages fundraisers to invest in data systems now to take advantage of the explosion of behavioral data becoming available online. “There’s so many bits that you can collect about what a person is doing or not doing online, which you can then put into a more traditional direct marketing model or a predictive analysis or ranking,” she says.

16. Be flexible with online asks

One advantage online fundraising affords over direct mail is a new way to test and develop asks. “I don’t think the science of asking strings is nearly as fully developed online as it is in the mail ... I think there’s a lot more room for experimentation online,” Taggart says.

For example, you can vary your asks for particular appeals or ask for a higher amount on your first attempt, then a slightly lower amount the second time around. According to Taggart, by looking at giving history across channels, you can assure that you are not downgrading donors in follow-up asks. “If I have a donor who gave $200 to the online Dog House campaign and then in the mail only donated a $35 renewal gift, I don’t want to then go back online and just ask them for $35,” Taggart advises.

17. Make segmentation and personalization pay

“The cost of segmentation and the means of production are less expensive online than they are in the mail. In the mail, you can’t afford to have 4,000 different versions of the package for 4,000 different kinds of donors, whereas online there’s just so much more flexibility and potential,” Taggart points out. The personalization available online allows fundraisers to capture more constituents on niche hot-button issues and appeals.

“If there’s somebody out there on a social network and they’re talking about the China fur trade and they have a group of 30 friends, then we can talk to them and give them the tools to do fundraising on our behalf on that issue ... whereas before we’d have to lump those 30 people into this mass mail acquisition about factory farming, and that just wasn’t where their hook was,” Taggart explains.

18. Use mobile wisely

Marketers are talking about mobile across all sectors, even fundraising, but only a few organizations have successfully employed this channel. Bhagat points out the obstacle of consumers’ sensitivity to mobile messaging volume, because oftentimes they pay for each message received. But, he says, mobile does have some intelligent applications, which the Obama campaign made clear. “When they said if you’re an Obama mobile subscriber you’ll be the first to hear the VP announcement ... they did a lot of things like that to really leverage the fact that we are today living in a multichannel world,” Bhagat says.

The mobile channel still has relatively little marketing clutter and can feel very personal when done right. “Whenever the direct marketers talked about the Obama campaign, we all joked, ‘When he texted me the other day ...’ He didn’t text me! But it really felt like that,” Taggart laughs.

19. Augment traditional marketing with new media

“One thing that [the Obama campaign] did well was exploit new media channels ... both social media, like YouTube, and social networks, like Facebook and MySpace,” Bhagat shares. He says that such venues are especially effective in reaching Generation Y and millennials, two groups who are on these networks daily, some individuals for hours at a time.

“The amount of clutter in those channels in terms of competing messages is still less than in channels like email or your mailbox. So they’re exciting in that sense ... but they’re not a replacement for traditional marketing channels like email, websites and direct mail; they’re really an augmentation,” he explains.

20. Social networking may be the future of giving

Facebook and MySpace are only really precursors that highlight a larger trend: It is a cultural norm to share your online experience with friends and family. Social networking had a powerful effect on Obama’s fundraising. Bhagat points out Obama’s online tool set, called “my vote,” which enabled users to reach out to friends and family to raise money, promote local events and encourage voting. He says that today constituents are forwarding appeals to friends, sending e-cards to raise awareness on issues, and creating personal pages to raise money from family and friends.

“I am excited about the prospects of social networking and the prospects of people being able to do their own fundraising,” PETA’s Phillips enthuses. “That’s something that hasn’t been a big part of the equation so far, and people are still working to get it right. But I can imagine that five years from now, it will be a much, much larger part of all online fundraising.”

In many ways, the Obama for America campaign’s success online represents a sea change in how donors function and how fundraisers must adapt. “What’s most exciting about [the Obama campaign] to me is that people in the millions are becoming engaged more actively in the causes and campaigns that are most meaningful to them,” says Warwick, who believes fundraisers will begin seeing more and more people coming online to research nonprofits and take advantage of giving opportunities.

While channels like direct mail are declining, online is growing. “This channel, while it’s still a much smaller contributor than the mail and other channels, it’s growing far faster than any other channel,” Bhagat points out. To demonstrate the growth he’s seen in online fundraising, Bhagat cites his company’s recent study showing 25 percent year-over-year  online growth across 300 organizations. “Any prudent charity ought to be putting in place a thoughtful, well-defined strategy for the web and make sure they have the right tools and the right resources in place to be successful online.”

While most large organizations have adopted sophisticated online fundraising techniques, Bhagat says it will be a few years until the smaller organizations catch up. “For some of the groups that we work with ... online fundraising is outstripping how much they raise in direct mail or over the telephone, and so it is a major vehicle now for some charities ... But most charities are sort of dipping their toes in the water,” he says.

What’s needed is a more measured, sophisticated and scientific approach to online fundraising. It may be years before most fundraisers are able to employ best practices online. “What is possible online is not necessarily what is within the reach of everybody who is attempting to raise money online now. Some of the metrics require a degree of sophistication that is not universal,” Warwick points out. “I don’t think that best practices are the norm in direct mail even now, and we’ve had direct mail in more or less its current form for about half a century. So maybe one of these days this will become a reality online.”

Britt Brouse is a former associate editor at Inside Direct Mail and now contributes to Direct Marketing IQ. A writer and marketer with 8+ years of experience, she is constantly experimenting with online marketing, social media and content strategies for businesses.

To purchase a copy of “Cross-Channel Fundraising Tips and Trends,” click here.