Since our email message earlier this week that the National Catholic Development Conference had joined The Alliance of Nonprofit Mailers in opposing the Postal Service's plan to eliminate nonprofit preferred mailing rates, our email box has been flooded with questions. Many NCDC members and others were completely shocked that the fund raising work horse of direct mail--as we have known it--could be at risk. We found no fund raisers who said they could take a 100% + increase in postage.
In one of my seminars last year, I told the group about a situation I saw play out in the 1990s that I find very similar to what nonprofit direct mailers are facing today with their direct mail efforts.
In the 1990s, I owned a database marketing agency that only dealt with large banking companies. And more particularly, we only dealt with what they called the “retail” sides of bank business, meaning individual customers of the bank. So, if you as an individual opened a checking account, you would fall into the retail side of the bank.
Speaking of checking accounts, all through the 1990s, the banks were issuing bank debit and credit cards as their customers asked for them since A.) they were more convenient for their customers to use rather than writing checks, and B.) it was less expensive for the bank to process.
My company had 13 of the top 25 largest banks in the country as clients, so we could clearly see the huge number of customers that were signing up for debit and credit cards. By the late 1990s, almost 95% of all bank customers had bank-issued credit and debit cards.
Seeing this trend, every year from 1995 on, we would expect that the companies that printed checks would finally see their check printing volume begin to decline. Right? But every year through 2000, we were proved wrong as check volume went up; maybe only two or three percent, but up nonetheless.
But then in 2001, the volume slid 4½%. In 2002, the volume slipped another 7% from the previous year. And in 2003, it fell another 14%...and then it just plunged!
Today, check volume is a fraction of what it was in 1999. The ease and convenience of debit and credit cards PLUS the change in behavior finally caused the “worm to turn.” And when it turned – it was a huge fall-off.
The point of my story is that we can’t predict when the “tipping point” will come for direct mail...but it will come.
Start planning for it today!
-Mike
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