Thursday, September 13, 2012

BIG’s Blog: Can Fundraising Really Change?

Not only can fundraising methods change, they absolutely will change, and dramatically within the next five years.

However, since it’s Friday, I thought I would share a story of mine that will make the point. And I think those in fundraising will relate to it.

In the late 1980’s, most retail banks… not their credit card operations… were essentially advertisers. The bank marketing directors typically came from the world of advertising agencies. It was very common for marketing people to move back and forth between what they called the “agency side” and the “client side” in all sectors of business, not just retail banking.

As such, these marketing directors’ expertise was in broadcast, print, billboards, and public relations. Direct marketing or direct mail advertising was a scant percentage of their advertising mix and typically for banks, it was a bank brochure sent through the mail.

All this changed with the arrival of database programs that could run on personal computers in the 1980s. This new tool allowed bank marketers to create a database of the bank’s customers by household, with all the accounts and account balances for every bank customer. More to the point, the opportunity for bank marketers was to see households that were already customers of the bank but didn’t have certain bank products. Those households then became the most likely prospects for cross-selling additional bank products and services.

The bank marketing directors were some of the smartest folks I have ever worked with. They remind me of a lot of Development Directors. Bank marketing directors began to allocate more and more budget to direct marketing because it delivered a return on their marketing budget that they could prove to their CEO and the bank’s Board of Directors was driving growth and profitability for the bank.

And, of course, the major direct marketing media in the 80s and 90s was mail.

I understand the irony in the story I have just told you of the situation many Development Directors face as their direct mail fundraising… the transformational savior for bank marketers in the 80s and 90s as well as being the growth engine for nonprofit fundraisers from the late 1970s through about 2005…is now in terminal decline. But nothing is going to suddenly change and bring back direct mail fundraising to the profitability levels of 10, 15, or 20 years ago.

As direct mail marketing took more and more of traditional advertising budgets for retail banks in the 1990s, so too online and mobile will inevitably displace direct mail fundraising budgets into the future.

Although for fundraisers there is a caveat.
And what is that caveat?

The caveat is that this shift to online and mobile will happen much faster.


Welcome to BIG's Blog!  Please feel free to forward this post to your friends and coworkers...and email me a comment at:

No comments:

Post a Comment