The Obama Effect: 10 Takeaways for Multichannel Fundraisers

Originally Published in Direct Marketing IQ in April 1, 2009. Another fun post from the archives!

by Britt Brouse

There’s no question that the Obama for America 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 and in part two, to be published in our May issue, 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 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 e-mail addresses … and then try and communicate to and cultivate those people online,” he adds.

4. Multichannel Donors 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 that 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 e-mail 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 e-mail addresses is the first step to successful online strategy—but then what? Sending a generic e-mail 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 e-mails. Then it placed the 99 percent who did not respond to the e-mails 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.

The next 10 takeaways are  featured in part two of this article.

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