By
Eric Beans CEO of Texting Base, Inc./www.textingbase.com
Fundraising
has been around as long as politics itself and it has become vital in the
current political landscape.
In
2008, 5.3 billion dollars were spent on federal elections. Barack Obama spent 730M and John McCain spent
333M. The average winner of a house seat
spent 1.4M on his or her campaign. In 2012 that federal election number jumped
to over 6.3 billion dollars. Obama spent
985.2M and Mitt Romney spent 992.5M. The
house number jumped to 1.5M to win a seat. The numbers are rising fast!
As
political battles become more expensive, political fundraising becomes more
important to the success of these campaigns.
It is nearly impossible to win a race without outspending your
opponent. Outspending your opponent
means raising more money. The traditional methods for campaign finance include
hosting events, direct mail, email blasts and telemarketing. With the meteoric rise in the usage of mobile
devices, texting is starting to change the way organizations target donations.
You
may be surprised to hear that direct mail is STILL the single biggest marketing
expenditure. In 2014 email was the most effective form of
fundraising. This is in spite of more
than 70% of emails worldwide being reported as spam. Text messaging was not widely used for
fundraising in 2014.
In
2012 for every dollar spent on direct marketing, the expected return was $12.18
(across all industries). Those are great returns, but where should you spend
your money?
The
following numbers are averages across all industries. Sources are listed at the end of the article. Below is a breakdown of the various means used
for fundraising:
READ RATE:
1)
TEXT:
98%
2)
MAIL:
66%
3)
EMAIL:
22%
4)
PAY
PER CLICK: 3.81%
5)
TELEMARKETING:
N/A
Text
messages have 148.5% read rates over direct mail. Pay per click is the impression and click
through. Telemarketing has no ability to
brand your entity. Either people pick up
the phone or they don’t. If you want
people to receive your message, there is nothing better than texting.
RESPONSE
RATE:
1)
TEXT:
19%
2)
TELEMARKETING:
8.21%
3)
EMAIL:
4.2%
4)
PAY
PER CLICK: 3.81%
5)
MAIL:
3.4%
Again,
text messaging comes in at over double the effectiveness of telemarketing. Keep in mind though that the “response rate”
for text messaging, email and pay per click involves clicking on a link. The response rate for telemarketing and email
involves sending in money.
CONVERSION
RATE:
1)
TELEMARKETING:
8.21%
2)
MAIL:4.2%
3)
TEXT:
1.68%
4)
PAY
PER CLICK: .22%
5)
EMAIL:
.21%
Direct
mail and telemarketing are so popular because they are consistent with high
conversion rates. Fundraising campaigns
love that they can count on consistent numbers when they start a campaign. The challenge as you will see in our next set
of data, is that there are massive costs associated with direct mail and telemarketing.
COST PER
MESSAGE:
1)
EMAIL:
$0.01
2)
TEXT:
$0.04
3)
MAIL:
$0.49
4)
TELEMARKETING:
$0.64*
5)
PAY
PER CLICK: N/A
Email
has a cost when sending through a service (as you should for compliance). Texting costs can be as high as 10 cents a
message and as low as 2.5 cents a message.
This is why email was the number one tool last year. With response rates that are around 8 times
as high as email, texting could cost up to 7 cents a text and still be a better
option.
*Paying
telemarketers $9/hour.
COST PER CUSTOMER
ACQUISITION*:
1)
TEXT:
$2.49
2)
EMAIL:
$4.98
3)
MAIL:
$51.40
4)
PAY
PER CLICK: $99.47
5)
TELEMARKETING:
$309.28
STACK
RANKING THE MARKETING SOLUTIONS:
|
MARKETING
TYPE
|
READ
RATE
|
RESPONSE
RATE
|
CONVERSION
RATE
|
COST
PER MESSAGE
|
COST
PER CUSTOMER ACQUIRED
|
AVG
|
|
TEXT
|
1
|
1
|
3
|
2
|
1
|
1.6
|
|
EMAIL
|
3
|
3
|
5
|
1
|
2
|
2.8
|
|
MAIL
|
2
|
5
|
2
|
3
|
3
|
3
|
|
TELEMARKET
|
N/A
|
2
|
1
|
4
|
5
|
4
|
|
PAY
PER CLICK
|
4
|
4
|
4
|
N/A
|
4
|
4
|
The
clear winner is text messaging.
These
numbers should make Campaign Finance Managers and Executive Directors all over
America take notice. It should come as no major surprise that email and texting
have a lower customer acquisition cost.
Staffing telemarketers takes space, resources, software, phones,
management and per dial costs. Direct
mail takes paper, ink, stuffing envelopes, management, space and postage.
The
cost of acquisition for texting is half that of email, which has the second
lowest cost. Texting is also 124 times less expensive per customer acquisition
than telemarketing and over 20 times less expensive than direct mail, which
again was the number one expense last year for direct marketing.
SO WHAT DOES
IT ALL MEAN?
Fundraising
has a new weapon. Mobile fundraising is
just scratching the surface in this arena.
At any given moment, 91% of people in the United States have a cellular
phone within arms reach. This is power
and effectiveness that should be making Campaign Managers, Finance Directors
and Executive Directors perk up.
Email
was the most effective tool for fundraising in 2014, and texting has response
rates up to 8 times higher, a 50% reduction in customer acquisition cost and a
read rate over 4X higher. Perhaps the
most amazing part of this story is how little texting base been used thus far
for politics and fundraising.
Much
like telemarketing, there are certain rules and regulations that need to be
implemented. One of the first things an
organization interested in using mobile marketing would be to change their
contracts (online and other) to allow for the usage of cellular phones. The second step would be to start collecting
more mobile phone numbers. The third
step would be to look into regulation.
More
information can be found here:
Texting
is significantly more effective when compared to other marketing techniques in
terms of cost per acquisition, read rate and click through rate but it does not
mean it should replace every other type of marketing. To the contrary, the more effective
fundraising campaigns incorporate multiple methods of contact and use the
various tools to complement each other.
For
information on 12 ways to reduce risk and stay within compliance for texting
campaigns, please visit:
For
more information, please visit:
Sources:
Eric
Beans is CEO of Texting Base, Inc., out of Orlando, Florida. Texting Base is a cloud-based software that
adds efficiency and power to business texting communications. Combining the
efficiency of a “mass text” and the effectiveness of a personal text message,
Texting Base uses patent pending software to allow businesses to build
relationships with their customers like never before. Prior to Texting Base, Eric Beans owned
Premier Mortgage Capital, Inc., a nationwide state charted mortgage company.
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