Recently, multiple news outlets reported that the United States Postal Service (USPS) has proposed an increase to their postage prices. This may come as alarming news for the majority of nonprofits who rely on direct mail to drive fundraising and are already on a tight budget.
One of our core values at Classy is “adapt and overcome,” and this is one of those moments when we all must adapt and overcome together. These new prices don’t have to hurt your fundraising operations.
In fact, there’s a potential upside for your nonprofit here, especially if this spurs you to test new approaches with online fundraising. To provide insight into the opportunities that come with this news, we met with the following industry experts:
- Colleen Ennis, enterprise customer support manager at Classy
- John Stauffer, managing director of strategic planning and channel strategy at DEG
- Melissa Rowan, annual giving consultant at Campbell and Co.
Below, we’ll go over the details of the price increases, what it means for your nonprofit, and strategies that can help bolster your direct mail program with an online fundraising component to potentially increase your revenue.
What the Mail?!
First, let’s take a moment to review the news. The proposed new prices, once reviewed and approved, would:
- Increase first-class stamps by 10 percent
- Raise the price of marketing mail (bulk rates) by 2.5 percent
- Postcard rates are not increasing in 2019, remaining at $0.35
- Take effect January 27, 2019
To the average consumer, these price increases may not seem like much. But nonprofit professionals know that these increases have big impacts when it comes to marketing their campaigns and sharing their mission through direct mail outreach.
According to Jeff Brooks, author on the Guidestar blog, a lot of the organizations he speaks with send “12 to 18 appeal letters a year, plus 3 to 6 newsletters.”
With the price of stamps for a letter increasing from 50 to 55 cents, your cost suddenly jumps from $2.5 million in postage to $2.75 million: a $250,000, or 9 percent increase, on your overall budget.
Where is this extra 9 percent supposed to come from? If your budget has been approved for the next fiscal year, but you suddenly need an extra $250,000, you might not be able to send the same amount of direct mail you did last year.
Don’t Stop Mailing
You don’t need to abandon your direct mail strategy. However, you should consider how you can augment your efforts to account for the postage price increase. When you look at your direct mail strategy through this lens, you may even start to notice growth opportunities for your nonprofit.
“For many organizations, there’s a core group of donors who are of a certain age and historical connection to your nonprofit that are going to respond to direct mail. You have to keep it as a major part of your toolkit.”
To bolster what Melissa says here, look at some statistics from MobileCause about direct mail engagement:
- The response rate on direct mail is 6 percent
- 50 percent of donors are more likely to respond to direct mail when they receive multiple messages across different channels
- Donors are three times more likely to give online in response to a direct mail appeal than an e-appeal
- 35 percent of donors say they prefer to respond to direct mail by giving online or via mobile devices
What this tells us is that marketing campaigns using direct mail alongside one or more digital media, like email or web, tend to experience a higher response rate. The following photo from MobileCause shows us as much:
So, while direct mail can stand strong on its own, it stands even stronger when you’re able to unite it with your online efforts.
Unify Your Offline and Online Fundraising
Leveraging both online and offline fundraising isn’t an either-or situation, but rather a best-of-both-worlds scenario. However, due to an increase to postage price, nonprofit marketers have to be even more strategic about how they approach their direct mail strategy.
As a result, you’re left with a few options:
- Find money to increase your budget and maintain the reach of your current direct mail program
- Cut your direct mail distribution to fit your existing budget
- Rethink what direct mail you send out and opt for cheaper pieces of mail, like a postcard instead of a pamphlet, to maintain your reach and existing budget
Regardless of how you choose to account for the price increases, online fundraising can help extend the legs of your fundraising revenue to cover this gap with low-cost, high-return methods that can supplement your direct mail efforts.
Below, we’ll share tips on how to bring offline and online fundraising together as well as explain how these strategies can help offset the cost of the proposed price increases.
Use Attribution Links
As Colleen tells us, it’s a general rule of thumb to include URLs to your online fundraising campaigns on every piece of direct mail you send. However, you can take this strategy a step further by making it an attribution link.
This ensures that, as your links get sent out to the world, the original source is represented. That is, you’ll know which specific segments and demographics are landing on your campaign page based off which specific link they use.
For example, you could make use of Classy’s source code links. These are unique identifiers that represent a fundraising appeal or marketing activity, and can be used to track the effectiveness of specific efforts.
For your direct mail, you could include a link to your year-end online fundraising campaign on every piece of direct mail you send out asking for year-end donations. The parameters could look like this:
- Source 1 = Year-End-Direct-Mail-Appeal; Source 2 = November-Mailing
You’ll know precisely how many people from your November batch of mailings went to your online year-end campaign and made a donation. Your organization is able to create as many different source code links as you want, which can include parameters to correspond with things like different direct mail segments, time of mailing, or donor demographics.
“There’s a big payoff in multi-channel promotions and being able to link a specific piece of direct mail to an action. You need to know who your donors are, and what different channels they use so you can maximize your response rates.”
When you know what groups are most responsive, you can allocate your direct mail budget to the areas where it will have the most impact.
Transition Offline Donors to Online Donors
In addition to including your online fundraising campaign URL on direct mail appeals, Colleen suggests including a section for supporters to write in their email address when they mail a donation. This way, you can begin to transition donor segments off your direct mail list and onto your email appeal list.
This is important, especially if your direct mail budget is stretched thin and you have to send fewer pieces due to the postage price increases. Once someone respond to a piece of direct mail with a gift, and the email address written in, add them to your email distribution list.
When the time comes for your next appeal, send a piece of direct mail to these people and send them an email appeal. As soon as they respond to your online appeal over the direct mail appeal, and make an online gift, you can remove them from your direct mail list.
The hope is that when someone donates online, they won’t go back to offline donations. This can free up money in your direct mail budget to double down on the people who choose not to donate online and prefer to send donations in response to your direct mail only.
Leverage Matching Campaigns
“A matching campaign is one of the best ways you can encourage donations to your nonprofit, regardless of online or offline.”
To encourage online giving, you can tweak the incentive of the matching gift period. More people give when there’s a match, especially if it’s from a reputable source. Like taking your link one step further with source codes, you can extend the power of a matching gift period as well.
That is, maybe you have a one-to-one match for donors who give offline through your direct mail appeals: $50 gets $50. When it comes to online, though, you can have a two-to-one matching gift to incentivize people to give online: $50 gets $100.
This is a great way to encourage more online donations while simultaneously increasing your online fundraising revenue. That increase in online revenue can potentially help offset the cost of your postage as well.
Keep Your Offline and Online Branding Consistent
A lot of nonprofits who send direct mail work with third-party firms or mailing houses. If you do, it’s crucial you clearly communicate your vision, mission, and branding with them so that your online and offline efforts are consistent.
“Part of why you pay a direct mail firm is to oversee strategy and messaging, but it’s important to maintain a consistent brand across the materials you create and what they create for you. Be direct: tell them what you want and expect.”
If your nonprofit’s message is one of hope and prosperity, it could be counterintuitive to let these third-parties send pieces of direct mail that emphasize negative elements your team is combatting, like images of suffering children. Without this brand cohesion, you risk a disjointed and confusing message, especially if you’re linking someone to an online fundraising campaign that prioritizes positive messaging.
It all boils down to the donor experience you provide for your audience. When your branding and imagery looks and feels the same across direct mail, social media, email, and online campaigns, it can help drive donations.
Hyper-Segment Your Mailing List
If you’re unable to send the same number of direct mail pieces due to the proposed price increases, you will likely have to hyper-target and segment your direct mail audience. All of the above tactics can benefit from aggressive segmentation of your customer base, and a personalization mindset from your nonprofit.
John gives us the example of a wildlife conservation nonprofit that has a specific donor who supports the protection of elephants from poachers in Africa. This nonprofit may have countless other programs focused on other wildlife, but they’ve got to target this supporter with elephant-related appeals.
“You have to know what a particular person is most interested in and what got them to donate. This has a huge impact on your direct mail outreach.”
When you know what your audience likes, down to the very program they support, it’s less of a gamble when you send them a hyper-targeted appeal. The chances are high that someone who previously supported an elephant-related program will support an elephant-related program again. With this strategy, your direct mail budget has a potentially higher return than if you simply mailed appeals for an elephant program blindly.
Despite the fact that the USPS has proposed postage price increases, it’s not the end of the world for your organization. Direct mail can still play a central role in your fundraising, but there’s a major opportunity in augmenting those efforts with online fundraising.
When you integrate online and offline fundraising successfully, you can potentially increase your fundraising revenue and maybe even offset the cost of these postage price increases. In any situation, Classy has you covered and can help in your journey. Reach out below and talk with our team today for even more insight and strategy.