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Amazon & the Melting Iceberg of Direct Mail Fundraising

Recently, I said to someone that direct mail is a "melting iceberg". By that I mean that it's big, but continually shrinking due to people's habits changing. So instead of still building around direct mail CRMs that can output postcards to different households, NPOs need to focus on different inputs feeding a single CRM. (I'm not going to explain why. Just believe me or read my other blogs on the data goldmine.)

The person said to me that the term "melting iceberg" might offend nonprofits since so much of their income is still tied to direct mail.

At first I felt bad that it may have come across dismissive. But then I thought about Amazon.

Do you realize that today if you want to buy a book in a store you have almost no options?

Five years ago nobody truly realized bookstores would die. We didn't recognize just how much they were a melting iceberg - big but with no growth. However now, other than Barnes & Noble, where would you go for a book? Better yet, if you were to invest $1000 in a bookstore hoping it will grow over the next five years, where would you invest it? Exactly. You wouldn't.

My 70 year-old mom reads books downloaded on her Amazon Kindle. And forget just selling books - my wife gets toys, shoes, clothes, shelving units, and diapers shipped to our door from Amazon.

Amazon figured out what people want, care about, and need and figured out the easiest way to bring together, in a central location, millions of buyers and tens of thousands of sellers. They didn't say "Well, books are still bought way more often in stores so we shouldn't do this." They realized they were five years from people getting used to doing everything online.

You need to bring every possible customer to one central location

The point is, direct mail will eventually just drive online. It will all be about transacting online or on the phone. Whether they do it immediately after opening a mailer, when theysee a banner ad or friend's Facebook post, or whether they are reminded when a TV spot comes on, direct mail will be just one more way to get in front of people. The trick is having every action based on those channels feed into one concentrated database.

Don't get hung up on the channels. Data is the only thing that matters. Again, I am not going to explain here why. I'm just saying, you will not grow if you don't aggregate data.

There was a great line I heard at NTEN, which is the reconsidered version of the Einstein-credited definition of insanity. This time, they stated "The new definition of insanity is doing the same thing over and over and expecting the SAME result." Banking on Direct Mail will not provide the return it has in the past.

If you want to be headed in the right direction over the next five years, then right now, DM should fund your transition opportunity. Keep doing DM but get this multi-channel thing right ASAP.

The iceberg could melt faster than you realize.  Or even worse, while you sit there trying to collect money from people on a shrinking iceberg, some NPO competing for the same dollar is going to have built them a network of floating pods that expand in sunlight. Essentially, the exact opposite but exactly what they really need.

It's a different world. And that direct mail-centered iceberg is shrinking faster than a book store revenue sheet.


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