In 1985 the charity I worked for didn't have the resources it desperately needed. In 2001, after introducing elements of CRM, one direct mail campaign broke all records with an unprecedented return on investment. This article is copyright 2005 The Best Customer Guide / Lawrence Stroud / 49th.NET T/A The Best Customer Guide.

In 1985 I was the general secretary for Botton Village (in the UK) - a community which provides homes, work and a meaningful life for adults with mental disabilities. The village is one of the seventy Camphill charity communities throughout 17 countries. The community was short of money for maintenance and was literally falling apart.

From a cold start...
I went to a lecture in London where a man named Ken Burnett was speaking on "Direct Mail – the last unexplored media'". He had written a book on the subject, Relationship Fundraising, and his ideas made a lot of sense, so I asked him to help establish a new direct mail fund-raising programme for the village. As a computer programmer, I quickly set up the systems to put his ideas into practice.

From the start it was a great success, and even our cold mailings were returning a profit for the first few years, enabling a rapid expansion of the supporter database from almost nothing to some 70,000 in five years. People liked our "We're happy but just short of money" message, and identified strongly with our village, even to the point they would arrange their holidays around our village open days.

Good relationships
In essence, what we did was simple. Today it's a large part of what's called CRM. Yet even now, despite its success, many charities and companies do not put these customer relationship management principles into practice:

  • Be honest and truthful. Even if you make a mistake.
  • Project a happy place. Don't try to raise funds from suffering and misery but from positive images and success stories.
  • Ask supporters for their preferences. Do they want to be mailed every few months, or just once at Christmas? Do they want to be asked for money, or just be given up-to-date information? Do they want to get off the mailing list? How else can you help them?
  • Answer complaints and queries promptly. Don't delay or try to process queries in batches to save money. Each supporter is an individual with whom you have a one-to-one relationship.
  • Acknowledge donations immediately. Let supporters know that their money has hit the target, within as few days as possible.

The net result of this is a group of very loyal supporters, with more than 50% choosing to be contacted only once a year at Christmas time. The cost savings on wasted mailings just from asking them that one question was unbelievable. The results of each direct mail campaign are more astonishing every year. Botton's supporters are generally the over 50's, middle class, and have disposable income. Gender distribution is roughly even.

Overcrowded market
Every charity is basically competing with all the other charities for support from an individual. The charity marketplace in the UK is crowded and competitive: charities are finding it more and more expensive to acquire new supporters, and it is becoming much harder to keep them loyal afterwards. Apart from donors receiving increasing amounts of direct mail from charities (and their tendency to make their donations in an informed way), charities also know that donors are becoming cynical about feeling 'marketed to', and they're more distrustful of charities in general than ever before.

The problem is that, if more than half of the supporters only hear from you once a year, you need to make them feel 'in touch' with the charity. Our mailings do this by including highlights of the year's news from the village. It would be a mistake to think that there's no real relationship just because you only talk to them once a year.

Nearly ten-fold ROI
The Christmas 2001 campaign broke all records. It targeted all existing supporters, sharing the year's news with them, explaining current needs (the focus of the appeal) and asking them to donate some money toward the appeal. The appeal was sent to 20 different mailing segments from Botton's own supporter database, segmented by relationship information including:

  • the supporter's giving history.
  • materials they had previously received.
  • the communication choices they made.

Although only one basic letter was designed, it was adjusted accordingly for the various segments and personal communication preferences of individual supporters.

The mailing was sent to 78,864 people - from which the charity received an amazing 27,775 donation-laden responses (along with even more 'white mail' and enquiries). Here's the results summary:

Christmas 2001 Results
Mailers sent 78,864
Donation responses 27,775
Response rate 35.21%
Total income £1,024,720
Average gift £36.89
Costs £104,810
ROI 9.77:1 (977%)

The results were good, particularly because the appeal in question - the needs of older people in Botton - had been dubbed "difficult, and not very strong". As Botton's population of villagers ages, their needs change and they need more special care, equipment, and building adaptations. This is a much more vague subject than, say, adapting or expanding a house. Yet that one appeal achieved the highest ever income for a single mailing despite having mailed 12,000 fewer supporters than the previous year.

Cross-selling, too
And so the regular communications continue to raise funds for various appeals. We've also been talking to donors about the needs of other similar Camphill communities in the UK, of which Botton is just one. Because Botton now feels that its own needs are lessening while those of other communities increase, we are tackling that major challenge: to cross-sell the other communities to our own supporters. To do this, we are renaming the existing Botton Village Life magazine to Camphill Family Life, which will cover the news, views, successes and needs of all the Camphill charity communities.

Technology plays its part, too. To aid our transition to a wider charity business model, we are writing a new donations application which puts donors into 'tracks' that record and make use of segmentation and customer relationship data to manage supporters throughout their lifecycle within the charity.

For more information about the charity, visit its web site at click here