Once upon a time (OK, it was back in May; time moves pretty fast in the direct marketing world), I wrote that quantity of mail volume is not the problem that some people thought it was. Basically, if you had a magic box that you put $1 into and got $1.10 out of it, you should take that deal.
Yes, there were storm clouds on the horizon. There was a study that I cited that said that increased donor mailings lead to increasing irritation among donors. But that one seemed to say that people gave the same amount, regardless of whether they were irritated, so it passed.
Well, there’s some new research out and it turns out I was wrrrrrrrrrrrrrr….
I was wwwwwwrrrrrrrrrrr….
OK, I’ll just say it: I was wrrrr… not right.
The study that proved me wr… incorrect is here. It was published in June so at least when I was … mistaken… I didn’t have access to the study.
The difference is that the study looks at how irritation affects the interrelationship among mail pieces. After all, if you add a mail piece, you would already get some of the revenues from that piece, whether they would have come into the piece before, the piece after, online, in telemarketing, or what-have-you.
What I didn’t count on is how much of those revenues would have come in anyway. The researchers found that each additional mailing generated 1.81 Euro in revenues, but that 1.21 Euros of that was cannibalized from future mailings. Thus, only 37% of the revenues that are “new” when you add a mail piece are actually from that mail piece.
What are the implications of that? I’ll let the authors tell the story:
“A charity maximizing its own revenues will stop mailing once the marginal additional revenues – the direct revenues minus revenues lost through cannibalization – exceed the costs of sending out the mailing. Cannibalization is estimated to be about 63%, so mailings are profitable for the charity as long as the costs are lower than 37% of the revenues.”
How many times in my career did I mail a piece where the costs exceeded 37% of revenues? Probalby about half the time. I was looking at marginal net revenue, which is a good measure, but I wasn’t testing the alternative – what do I get if I don’t mail the piece?
That cannibalization is massive.
But it is not the only reason I was wwwwwwrrrrr… I mean, it’s not the only reason I had some flaws in my thinking. The other is the long-term effects of irritation from mailings. Another study found that donors who have increased frequency to direct mail have increased irritation, decreased goodwill, and decreases likelihood of giving, quarter over quarter. Here again, I’ll let the researchers speak for themselves:
“[Donors] who donate frequently are less likely to donate in the near future. These findings are not only stable over time, but also replicate across two large data sets.”
Between the fact that mail pieces rob from each other and the long-term negative implications of overmailing, it seems that it is wise to try to get mailings out of the mail stream when possible. Here’s an area where my original post, while… mistaken in some aspects… has some good tips to reduce mail volume.
But another good way is to give donors what they want: control. In our recent opt-in webinar (which is free and available here), Dr. Kiki Koutmeridou (and, to a far lesser extent, I) talked about how the most important behavioral science influencer on getting a supporter to actually opt-in is providing them with control.
This is not a slippery slope to a database of ‘only contact me once’ donors. It turns out donors prefer being given channel control over the seemingly more direct route of number of contacts per year. This results in flexibility for both charity and donor.
Getting the complete, evidence-based answer on volume is comforting. But volume isn’t this is the end of the story; instead, it’s the starting point for the even bigger realization that merely fixing the volume problem is no solution at all.
You can get the rest of that story here and you can hear how the ‘rest of the story’ is playing out for charities who are in-market with pilots that go well beyond ‘sending less to make more” by signing up for our newsletter below. And you can see an example of an in-market success in our multi-gift webinar.
Of course, if you are interested in testing out of the volume business, let us know – we’d love to help.
As long as you are OK getting advice from someone who was previously wrong.
There. I said it.