The Value of an Email Address
Last week, we talked about advocacy as a way of building your file (and I was called out, correctly, for discounting the potential of paid advocate acquisition). So how much should you spend to get one email address?
There’s new data from Steve MacLaughlin and Blackbaud (that you can get from his Data Driven Nonprofits newsletter) on how having an email address on file is related to increased donor retention, even if that donor doesn’t give online.
They found first-year donor retention was double (25% versus 12%) for online donors if you have an email address versus those for whom you don’t have an email address. But this holds true for offline (37% versus 30%) and multichannel (65% versus 60%) as well.
It’s not certain that this relationship is causal. That is, it could be that donors who like you more are also more likely to give you their email address. (I’d argue that email is almost certainly the driver for online donors, where email is a primary means of getting the person to donate again, but can’t prove that from these data.)
Or it could be that having an email address allows you to do online co-targeting display advertisements and it is that, not the extra email you are sending, that drives additional retention.
Or it could be that wealthier people are more likely to have email addresses and more likely to retain. As this isn’t 1997, I’m skeptical of this, but it’s a possibility.
Or, it could be that email is the easiest way to get more information about a donor. Yes, some paper surveys have strong response rates. But you are only likely to send a paper survey to someone who is an active donor or one too valuable to lose. Online surveys, on the other hand, have little marginal cost to send, can engage people who haven’t given in a while, and have advantages like skip logic to make taking a survey easier.
Thus, maybe it’s not the email communications, but rather the additional information you are getting from surveys played out in your other communications, that is increasing your response.
(You are using the additional information you are getting from your surveys in your other communications, aren’t you?)
The mechanism could be all, some, or none of these. But it may not matter for your purposes: if this is a consistent indicator for your organization that holds steady as you do email acquisition efforts like content marketing, online advocacy, e-appends, etc., you have a powerful indicator of retention.
(Yes, you heard me – powerful. Increasing retention by more than 20% among offline donors? Decreasing donor burn by more than 10% of multichannel donors? Those are big jumps for us.)
These data also scream the need for an attribution discussion. Too often, we get in our last-touch attribution silos – an online donation goes into online revenue, a mail donation goes to that piece, and the major donor team who just closed a big gift gives the direct response team zero credit for acquiring or cultivating that person. Roger has a dandy rant on “false attribution” here.
But it could be the emails that remind a donor you exist in between mail packages that cause or help cause a person to give when that mail package is in front of them. The mail package could be driving the click-through rate on your display advertising. And everyone knows those major donor fundraisers would be nothing, NOTHING!, without we direct response folks laying the groundwork.
That’s why we advocate not just testing one communication versus another, but one program versus another. While certainly more complex, the only way to determine what lift a communication actually had is when it isn’t there (and how that ripples through your entire donor ecosystem).
10 responses to “The Value of an Email Address”
Behavioral Science Q & A
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For all the reasons you suggest, I would argue completely against the very concept of attribution. Development is a team sport. It’s why I hate it when the CFRE recertification folks ask you to list how much YOU raised over the preceding three years. Meaningless. I didn’t raise anything. People give because of what the program staff do. Development and communications staff are philanthropy facilitators.
Sorry if I’m ranting off on a tangent…
Crucial discussion. I see it all the time, small, mid-size and large organizations are struggling with this. Some are more rigid than others. This is an excellent overview to share with them, it is a team sport, totally.
Last year I worked with an NPO that increased income for an annual appeal by $15k thanks, in part, to an email campaign that we ran concurrent with the mailing. We sent a note that the mailing would be arriving, another one that it should have arrived, and another to say we hoped it had arrived and that they would give. Now, was the increase all due to the email, who knows, but I suspect it mattered.
I do wonder as well if people signal greater interest or trust in you if they are willing to provide an email.
I absolutely agree with the “we are in this together” ethos. Can’t agree with you on leaving out attribution, however.
The problems with not doing attribution are at least threefold (in my mind):
1. Not having an attribution plan doesn’t mean you aren’t attributing in your mind – it just means you are using the heuristic of last-touch attribution.
I had the privilege of working with the US Olympic and Paralympic Foundation on their January and February appeals. Those appeals did better than appeals sent out at the same time last year. But rather than saying it was any credit to them or to me, you would logically say that there was something that happened, probably in February, that cause the Olympics to be more salient to people. That’s a better and more sophisticated attribution that correctly assigns credit.
Failure to break out of last-touch attribution can make for some odd decisions. I talked to one organization who just got a large bequest, so they are focusing on planned giving… by cutting their donor acquisition budget. Someone needs to have a “where do donors come from?” birds and bees discussion here.
There’s also some evidence that efforts like DRTV that increase visibility can increase other channels like mail acquisition (but mail is that last touch). A person could say “mail is doing so much better; let’s cut DRTV” if they don’t know that connection.
2. Attribution is important for organizational decision-making. Let’s say that (to make the math easy) it costs $.20 per name to do an e-appeal. That email address is worth $.15 to the mail team (because of how email lifts mail response rates) and $.15 to the online team in LTV.
If you don’t see the impact of having an email address to the mail team — an attribution analysis — that’s not an investment you are going to make. And even if you know it, no siloed team member is going to invest in it because it hurts their silo.
So, yes, you definitely need the team spirit to break out of that silo, but you also need the attribution analysis to figure out when and how you work together. To Sophie’s point, you can get people to work together on a year-end campaign by letting people know that the things they are doing (that aren’t perhaps for their personal goals) are making a difference.
3. You don’t know what isn’t working. Let’s say you have a cultivation mail piece. Folklore says it doesn’t raise any money, but it is the reason that major and monthly donors donate.
Is it? Perhaps it is and absolutely needs to be done. Perhaps it isn’t and needs to be retooled or scrapped. But you don’t know unless you do the attribution.
Thoughts?
Totally agree you must attempt to measure what works/doesn’t work. And then, of course, invest more in the former and less in the latter. That’s attributing value to a strategy (one component to the whole of your strategies that work, together, to move you towards your shared fundraising goal), as opposed to assigning “credit” to a single department for those results.
OK, sounds like we are on the same page. Attribution to strategies and tactics: good and necessary. Using that to pit one department/person against each other in a nonprofit version of the Hunger Games: bad and destructive.
Hello,
Could you point me in the direction of Steve MacLaughlin’s original report?
Thanks!
Katie, I must confess I got it from the newsletter, so I’m not sure where to get it in original form. I’ve reached out to Steve to try to get a full source for you – thanks for asking!
Katie, I talked with Steve. It’s from Blackbaud’s DonorCentrics group. He gets to publish aggregate results and medians (like the above), but there is no larger report behind it (like for the anonymity of the organizations that participate). Sorry!
Got it. Thank you for looking into Nick!