Telefundraising income skyrocketed by 67% between 2010 and 2013. Keith Elliott looks at what is behind the growth and gives the key trends in this channel based on analysis from the 2014 Pareto Fundraising Benchmarking Project report.

Telefundraising continues to grow in importance as a crucial channel for charities to engage supporters and it remains an excellent way to upgrade, reactivate and convert potential donors. In 2013-14, income generated from telefundraising activities fell just shy of $60 million. This marks a 20% increase compared to 2012-13 and a massive 67% increase since 2010-11.

What is driving the growth?

Regular giving and child sponsorship income has continued to grow year on year via telefundraising. However cash income generated through phone campaigns has plateaued. This is backed up by our practical experience where we have seen drops in income generated through phone cash campaigns across our client base.

We believe the reason for this drop is continued industry shifts towards regular giving and market saturation of available data list names (making it more expensive to acquire cash supporters), coupled with recent changes in Privacy Policy laws, meaning that acquiring donors via cold calling is even more difficult than before.

Upgrading cash, raffle and long-time supporters

Many charities have, or are now, focusing their attention on converting raffle and cash donors to regular giving. The critical success factor here is in selecting the right donors to call as not all raffle and cash donors are viable phone conversion prospects.

2013-14 also saw a trend in the number of charities developing an ongoing bequest strategy by selecting and targeting long-term cash supporters through a combined mail and phone communication campaign.

Online lead acquisition and conversion escalate

The big story of 2013-14 was the exponential growth in online lead acquisition and conversion by phone. Online surveys, petitions, social media and traditional online marketing are now generating sizeable volumes of weekly leads for many charities. These leads are then converted through phone conversion campaigns.

Online leads provide a valid alternative to the current issues facing Australian charities wishing to emulate international success from SMS acquisition campaigns. In the main, they allow for cheap hand-raising with sustained conversion results by telephone. They also let charities “dip their toes” into the online space prior to developing a broader online strategy.

For many charities, these new sources of supporters provide an ongoing stream of new regular givers which can supplement shortfalls in face-to-face or facilitate an opportunity to diversify regular giving acquisition channels.

For some charities unable to fund or find capacity to conduct face-to-face, the creation of online lead conversion via phone has meant charities can now have a viable ongoing acquisition stream of regular givers. When we exclude non-starters, our analysis shows attrition rates for online lead acquired regular givers are on average 30% compared to 45% (benchmarking average) for face-to-face, making online lead acquisition a very viable channel to acquire regular givers. 

We expect this trend to continue, and as charities become more skilled at engaging their supporters through creative digital strategies, the need for well-planned and effective conversion using the telephone will grow.

Keith Elliott

Keith is chief commercial officer at Pareto Phone, where he has worked for three years after an earlier career in digital and offline advertising. With his account team, he has created and delivered successful phone campaigns and strategies for some of Australia’s largest charities including World Vision, Cancer Council New South Wales, CanTeen, Médecins Sans Frontières and WWF.

For more on what’s happening in telefundraising, see Fundraising and Philanthropy Magazine’s special annual update on the channel in our June-July issue, out June 10.

Featured are: tips on the 7 conversations to have before engaging an agency; expert advice on what’s new in raffles; and case studies on the successful regular giving phone-conversion programs at Greenpeace Australia and The Shepherd Centre.

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