Tuesday, May 4, 2010

Benchmarks. Don't Leave Home Without Them!


This is a guest post by my frolleague, Catherine Algeri, Senior Account Executive, InfoGROUP Nonprofit.

I spend a good amount of my “free time” time working on the board of a small, local, grassroots nonprofit.  It’s 100% volunteer driven and each board member is recruited for her own area of expertise.  Usually we respect each other’s skills but when it comes to email marketing – the opinions roll-out!  Our last online marketing discussion went a little like this: 

  • “I’m afraid to send another email because people unsubscribed to the last one.”
  • “I think we’re emailing people too much.”
  • “If we don’t update people often enough, they’ll become disengaged!”
  • “Do people even like e-newsletters?” 
 
Without benchmarks, or a guide to best practices in email marketing and fundraising, it’s tough to chart a smart course.  Luckily, the annual eNonprofit Benchmark Study by M+R Strategic Services and NTEN helps put an end to these drawn-out conversations.

    The 2010 eNonprofit Benchmark Study was released last week and can be downloaded here.  That said; let’s review some key stats from the report and what they mean for your nonprofit.

    Open, Clicks, Unsubscribes and Churn

    1. Annual email file churn, i.e. the rate at which email addresses go bad, was just under 17%.

    What this means for your nonprofit: You have to replace 17% of your email addresses annually!  Make it a part of your plan or your list size will shrink.

    2. There is NO correlation between the number of emails sent and the unsubscribe rate.     

    What this means for your nonprofit: You know that conversation “I’m afraid to send an email because some people unsubscribed to the last one?” You can stop having that.  There’s no evidence to back it up.  Besides, the point of your email list is to communicate with people. Take this finding as a license to keep fear out of your communications planning.

    3. Smaller nonprofits (organizations with 100,000 email addresses or less) have:

    • The highest open rates at 19.80% vs. the average of 14.09%.
    • The highest click through rates at 4.10% vs. the average of 2.55%.
    • The highest unsubscribe rates at 0.41% vs. the average of 0.23%.

    What this means for your nonprofit: If you work for a small nonprofit, like mine, people may opt-out more quickly.  On the other hand, you may have a “more attentive list," which is positive.

    4. The average nonprofit sends 4 email messages, per subscriber, per month.

    What this means for your nonprofit: Don't be afraid to send email! However, the report also segments message volume by type of organization and size and you should be sure to follow the benchmark for your type of organization.  For example small organizations average 2.38 emails per month and health organizations average 2.07.  In the case of my nonprofit, we’ll stick to 2-3 as the sweet spot, for now.

    Email Messaging: What You’re Talking About Impacts Results

    1. Advocacy:  Click-through rate is more critical to your campaign’s success then open rate.

    What this means for your nonprofit: In campaigns with high action rates, click-through rate was seen as the key factor.  Make sure that you focus on testing copy that compels people to click through in addition to worrying about the subject line.

    2. Fundraising: Depending on your mission, your donors are more likely to make monthly or one-time gifts.  Again, be sure to follow the benchmark for your organizational mission.  For example,

    • For Environmental Organizations 95.67% of online donations are one-time gifts.
    • For Health Organizations 39.79% of gifts are event-driven.
    • For International Organizations 25.58% of online donations are monthly gifts.
    • For Rights Organizations the large majority of gifts are one-time only, but 9.32% are monthly gifts.

    What this means for your nonprofit: Be sure that your fundraising asks and tactics match your mission! In our case, our mission is a combination of health and human rights.  According to the study, health organization receive about 40% of their donations from “other” categories like events and walk-a-thons.  My organization used this information to set up a bowl-a-thon; the event rose more than all of our FY 09 monthly revenue and one-time gift revenue combined!

    Are You and Apple or An Orange?

    As mentioned above, organization type impacts your fundraising and advocacy performance.  It's all about context.

    What this means for your org: When setting goals for your organization, use benchmarks with an eye to performance for your mission.  Otherwise, you'll end up patting yourself on the back for a sub-par performance or flogging yourself when you're actually doing well!  

    Benchmarks give us an opportunity to assess our strengths and weaknesses and provide a gauge for what we can expect from our online fundraising and advocacy programs. Most important, they help us chart a course BEFORE we launch a campaign.  Thanks to NTEN and M+R Strategic Services for providing us with the 2010 eNonprofit Benchmarks Study!

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