Despite the sometimes negative reactions elicited by telemarketing, Mel Jenkins says the practice is thriving.
Despite the sometimes negative reactions elicited by telemarketing, Mel Jenkins says the practice is thriving.
There is no denying that telemarketing gets a bad rap from many people when brought up in conversation. Boards and management frequently reject it as being an inappropriate way to communicate with supporters as it is too intrusive or because they personally do not like being ‘called during dinnertime.’
In spite of this the telemarketing industry (across all sectors including banking, retail, not-for-profits etc) is growing at a rate of between 15%-20% annually.
While there is no formal research available on the actual numbers of not-for-profits undertaking telemarketing, industry insiders believe there are well over 100 organisations involved in the practice.
Further evidence of the growth of telemarketing amongst not-for-profits comes from our experience that the number of organisations embarking on test programs has doubled. Many of our existing clients have also recently doubled their spend on telemarketing.Telemarketing involves a wide gamut of applications from donor acquisition and upgrade, to selling merchandise and art union tickets, or to simply updating supporters on a charity’s activities.
There are two key drivers for the growth of telemarketing in the not-for-profit sector: the maturation and increased professionalism of fundraising in Australia; and aggressive acquisition strategies currently in use by a number of not-for-profits – especially face-to-face (F2F) supporter recruitment programs.
When it comes to the “maturation” aspect, many not-for-profits are being proactive about diversifying their income streams. The competition is on for “share of wallet,” and the competition is being won by organisations that innovate and implement a wide range of fundraising strategies.
On the F2F front, around 30-40 of the largest not-for-profits in Australia are conducting programs and many have implemented a telemarketing strategy in support of them. Telemarketing is being used as the primary vehicle for development and retention of F2F supporters because they respond much better to phone contact than to traditional methods of communication such as direct mail.
However, it is not only large not-for-profits or those pushing F2F programs that are engaged in telemarketing. Many are choosing to rely on a combination of telemarketing and direct mail to augment their income and are doing this with resounding success.
There are three general donor-type telemarketing programs: conversion (or acquisition), upgrade and reactivation. The return on investment (ROI) for each of these varies between organisations and is contingent on a number of factors, however a general range of results that can be expected from these activities is shown below.
Program Type ROI Year 3*
Conversion 200% – 700%
Upgrade 900% – 1600%
Reactivation 200% – 450%
*Based on the returns for supporters remaining at that giving level for an average of 3 years.
According to the Department of Gaming and Racing, supporters signing up as regular givers have an average lifetime of three years. However some organisations are achieving supporter retention rates of 7-10 years. Upgrading a donor’s annual gift using the phone produces, on average, an increase of 35% in the monthly gift value.
There are some trends emerging in the way various not-for-profits approach telemarketing. Local organisations typically do one-off campaigns such as appeals, and cold calling for donations and raffles.
International organisations are more likely to undertake programs that support regular giving, eg, upgrade, conversion and reactivation. Many not-for-profits are still doing one-off asks to supporters, but the trend is increasingly to promote regular giving.
The best results are achieved by organisations which:
Regularly and consistently provide information to supporters. Ensure messages and information between all fundraising activities are complimentary. Have well-maintained, accurate databases. Are prepared to take advice and test new methods of marketing. Deliver follow-up materials to supporters in a timely manner.
Those not-for-profits that have not always been vigilant in marketing to their supporters or keeping their database in top shape are not precluded from telemarketing.
Spend some time cleaning up your database and try some small test campaigns to get a feel for how your supporters respond to telemarketing. Some not-for-profits are conducting telemarketing programs in-house, but many also choose to use a specialist consulting firm and external call centre.
As well as generating income, other advantages of telemarketing include: significantly reducing attrition rates, increasing supporter loyalty and building brand profile.
When evaluating telemarketing against other forms of direct marketing it is important to consider this: it costs most organisations upwards of $200 to recruit a new supporter through face-to-face and even more through direct mail. Why not retain that supporter by investing $10-$30 annually to update and upgrade them via the phone. In doing this, you are maintaining your hard-won donors and guarding against losing them through attrition.
Who’s calling
Some organisations currently or recently engaged in telemarketing:
• Australian Bush Heritage Fund
• Christian Children’s Fund
• Epilepsy Association
• Children’s Cancer Institute
• Sids and Kids
• MS Society
• The Heart Research Institute
• The Royal Blind Society
• The Spastic Centre
• The World Society for Protection of Animals
