The Salvation Army faced the classic charity challenge - rising costs and falling donor volumes.
In 2007, The Salvation Army faced the classic charity challenge - rising costs and
falling donor volumes. The 2007 campaign had cost 6% more year on year, yet recruited 15% fewer donors. It wasn't all doom and gloom; in fact overall the campaign was market beating. However, doing nothing would continue the gradual decline, but making a change could put the existing category leading results at risk.
The Salvation Army decided to do something. And they set four key metrics to guide
a clear and measurable strategy: 1) Volume growth of new donors was the primary objective.
2) A year one ROI of 1.0 or more for new donors, so recruitment was cash neutral. 3) The value of each new donor over five years had to continue the current value model. 4) Cost per new donor recruited was a key measure.
The Salvation Army made two major changes to the previously all print contact plan. They added TV and digital media. Simultaneously, the plan more than doubled investment in mail volumes over the same period, recognising mail as the core of the programme, with both addressed mail and door drops providing the primary media to drive donations. Cold mail volume increased +270% to 5.4m while door drop volume increased +158% to 9.6m. The Salvation Army was able to maximise the role each media played in the marketing mix.
The Salvation Army experienced an immediate increase in new donors and levels of giving in 2008, both off and online. And these grew year on year. Over the five years, 2008-2012, the number of new donors recruited grew by 262% up to 131k and total donations grew by 48%. £9.5m of immediate incremental income is projected to become an additional £24.8m over the next five years, as many new donors go on to give again. From 2008-2012, cost per new donor fell by 16%.
Mail remained the most cost effective generator and the largest volume source for acquiring net new donors in the expanded media programme. Other channels generated large amounts of donations from current donors. The individual level targeting inherent in the direct marketing channel meant that 97% of new donors recruited by mail were new to the organisation, compared with an average of 50% from the other media channels.