Is 99% Failure Acceptable? | npENGAGE

Is 99% Failure Acceptable?

By on Jun 4, 2009

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I am spending a lot of time these days looking at numbers. Lots and lots of numbers. Mostly because I'm working on a new book and exploring the wonderful and strange world of online fundraising metrics. (More on that in future blog posts)

One thing that has got my attention are some of the latest online fundraising benchmarks in the 2009 eNonprofit Benchmarks Study done by M+R Strategic Services and NTEN. I also had a copy of the 2008 study and did a mash-up of some of the findings. All good studies raise questions and this one begs the following question: Is 99% failure acceptable?

Email Results Dropping
The studies highlight the performance of email fundraising appeals sent by nonprofits. To be clear, the studies also look at separate metrics for email newsletter and advocacy alert messages. The three year trend for email shows a drop across the board with the exception of page completion rate. Open rates can be deceptive, but click-through rates and response rates are very telling. And what they are telling us is that 99.88% of these fundraising focused emails failed to result in a gift.

Why 99% Failure is Acceptable
Some nonprofit consultants will point to direct mail where a 2% to 3% conversion rate has people popping the champagne. Others will add that the sheer volume of spam dilutes the potential effectiveness of email. Organizations might also claim that using email is still relatively new for many of them and they can't be expected to outperform more traditional channels.

Why 99% Failure is Not Acceptable
Email is not direct mail. While many of the same strategies apply, it is like comparing apples and iPhones. Email communication has more robust segmentation and personalization capabilities. It has faster response cycles, is more cost effective to test, and combined with higher average gifts it can have better ROI than traditional channels. Email isn't perfect or the Holy Grail of marketing tools, but having success less than 1% of the time shouldn't be acceptable.

What is Your Success Rate?
Go ahead and pick your side in the debate. But make sure you know how you measure up. How do your results compare to these benchmarks? Where is it today? How has it changed over time? Where do you want it to be? What's the value of the difference? Welcome to the beauty and importance of benchmarks. They establish a point of comparison over a period of time and help you measure your own performance against it. Benchmarks don't set your goals, but they can absolutely help drive your performance measurement in meaningful ways.

Results May Vary
All statistical averages hide the reality that some organizations are well above the benchmark and others are way below it. Successful nonprofits have learned that better segmentation, message testing, and integrating their efforts with other channels yields the best results. These organizations also don't push the send button without having a goal for the campaign, a targeted audience for the email, a clear purpose for the message, a measurable call to action, and a plan to monitor the results. 99% failure is not acceptable for these nonprofits.

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