Telephone fundraising agency The Phone Room has launched DonorConnect, a new method of recruiting donors that combines online marketing with the telephone. The agency says it will deliver a first year ROI of up to 10:1.
The Phone Room will then callback those people who register within 12 to 48 hours to sign them up to regular monthly giving or to qualify them as prospects for future campaigns.
DGM Affiliates’ network of website owners will be able to promote The Phone Room’s charity clients by carrying their banner/button adverts. Affiliate site owners are then paid a cost per action (CPA) when a valid action, such as a sale, order or application, is made at this site. In DonorConnect’s case it will be a registration to give regularly.
A number of charities have been using online affiliate marketing for various fundraising purposes for several years. Greenpace, Oxfam, World Vision and WWF all use DGM Affiliates. Indeed, E-consultancy’s Internet Statistics Compendium shows that the value of UK sales from the affiliate networks channel was between £1.1bn and £1.35 billion for 2005, having risen from around £600 million in 2004.
Rachel Hunnybun, The Phone Room’s business development manager, is confident that the integrated approach will work well: “we would expect to convert 30% of the people we call to monthly direct debits,”she said, “with the remaining 70% being qualified and profiled for future campaigns.”
The Phone Room is keen to demonstrate the effectiveness of this model, so it is looking for five contrasting organisations to test the new system. Those selected will be offered discounts on their costs.
The affiliate marketing approach is based on similar operations in Europe and Hunnybun predicts that DonorConnect will give returns on investment of up to, and even more than, 10:1.
“Donor recruitment through integrated online marketing and telephone methods in Spain, Germany and the Netherlands, based on banner advertising and pay per click, has achieved a first year return on investment of between 6:1 and 11:1,” she added.
“As we will be using a model that is similar to pay per click, we would expect charities using DonorConnect to appear in the top end of these results.
Charities using the service will be charged “a modest set-up charge”. They will then be charged at cost for the affiliate commission for each registration (between £1.20 and £1.40). Charges will then be made per donor converted to direct debit.
“The RoI is kept high because there is relatively little campaign set-up cost for the charities and the cost per action for registration is passed on at cost. The Phone Room will then only charge the charity for the conversions to the monthly direct debits we make, Hunnybun said. “We won’t be charging for cash gifts of under £250, quarterly direct debits and annual gifts.
One of the benefits of DonorConnect is that charities purchase registration information of unsuccessful conversions at cost, but they will also get the additional information picked up through the telephone call, which they can use for future marketing.”
Online affiliate marketing in general offers a low-risk method of generating sales or donations. Christian Panayi, head of marketing at DGM Affiliates, said: “This is particularly relevant for the charity sector which depends on close-monitoring of spend and maximising return on investment. Our partnership with The Phone Room represents an exciting new approach, combining the affiliate marketing model with telefundraising to drive donor acquisition for multiple charity clients, to the benefit of all parties.”
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