Direct Response Television.

Just another donor acquisition tool

The depictions of starving children, abandoned animals, or other shocking images combined with hard-hitting commentary are merely donor acquisition tools.

According to Graham Knope, president and producer of Eagle-Com, a full service direct response agency based in Toronto, direct response television (DRTV) fundraising is strictly just an other method of capturing donors. And, he explained his top 10 rules of DRTV fundraising at the recent Association of Fundraising Professionals International Conference on Fundraising in San Diego.

"(DRTV fundraising) really is nothing more than that (donor acquisition vehicle) and that's, I guess, the point I want to make," said Knope. "It's another way for a charitable organization to acquire donors, and to acquire monthly giving donors."

First, nonprofits often use television, and television fundraising vehicles, in a manner that they shouldn't, Knope said. "This is not a corporate video; this is not an audio-visual version of an annual report; this is just a donor acquisition vehicle," he added.

It's, not unlike a direct mail piece where the organization conveys a certain aspect, but not the entire operation. "You don't try and get across everything in a direct mail piece, and you shouldn't try and get everything across in a television program."

Knope said his second rule (Why do you do DRTV?) deals with garnering monthly giving donors, not onetime-only givers.

"People have tried it, it's been tested (to encourage one-time donors). People have said, 'Well let's just get the lead, let's get them signed up and then we can convert them to long term donors.' It doesn't work that well," said Knope.

The DRTV formula is driven by monthly donors, and while one-time gifts are certainly going to occur, the focus should remain on increasing monthly giving.

Another reason to implement a DRTV fundraising program is organizational awareness and brand building, explained Knope.

"Obviously there's an awareness/brand-building component to TV," he said. "That's not why we do it; but when you produce an infomercial and it airs hundreds of times over and over in a number of markets there is without a doubt an awareness-building component to it."

So what type of organizations should consider DRTV?

Knope advised that only financially stable, national or internationally mature 501(c)(3)s delve into DRTV fundraising.

This is not a vehicle that's going to work for a lot of organizations," he said. "It's quite often restricted to the large organizations."

Organizations seeking short-term revenues should not try DRTV fundraising, Knope added, and those that do try it shouldn't look to break even for 18 to 24 months. "This is not a fundraising vehicle for short-term profitability without putting in significant investment early on," he said.

Other questions Knope said nonprofits should ask when considering DRTV fundraising are:

* Does the product demonstrate well on TV;

* Does it have an emotional appeal;

* Is there an urgent, life-threatening problem with a simple solution;

* Is the mass market willing to buy into the offer on a monthly basis;

* Do the offer and benefits demonstrate well on TV?

An old television fundraising credo was, "If you make them cry, then they will give." But, according to Knope that stereotype has changed over the years.

"We used to believe that if we could produce a telling story, emotionally driven, and get people to cry then we could probably get people to give," he said. "And we went along, quite naively, for a number of years feeling really proud about what we're doing and that we had conquered this -- and all we had to do was tell great stories."

But, a few years ago Eagle-Com had what Knope called, "a great show with high broadcast quality, and lovely stories, and lots of emotion... Made people cry."

And nobody gave. It was back to the drawing board.

"There probably isn't a better TV offer than the child sponsorship model. That has worked historically so well for 30 years and continues to work well -- that's the place to start," said Knope.

In addition to tugging on the emotional heartstrings of the television viewer, Knope said that pledge breaks (if done correctly) are just as essential in a successful television program.

Some of the primary and secondary production elements Knope cited were:

* Stories. While they're the cornerstones of the program (taking up 50 percent of the on-air time), they must appeal to ones emotions. It needs to express feelings, not facts, and balance the need for contributions and the simple solutions to a difficult problem. Also balance must be achieved between hope and desperation, and victims and champions.

* Pledge Breaks. Must be consistent with specific details on what the donor receives with a pledge. Not to mention what actually happens when they phone in to make a pledge.

* Celebrity Endorsements. Create "stopping" power for viewer, said Knope, while adding credibility to the organization. Most will donate their time, which is also another financial benefit to using celebrity endorsers.

* Donor Endorsements. Using donors also lends credibility to the organization and reaffirms that revenues generated from the TV program are actually going toward the organization's mission. Donors also let people know that they are "satisfied" with where their donation is going.

* Music, Graphics and Packaging. Music tells people how to feel and is needed throughout the program, according to Knope. It must be emotional and evoke sympathetic feelings. The packaging and graphics of the program must be current, but reasonable.

* Media Campaigns. There must be considerable media time potential and they must be able to ramp up or down in a hurry. Media campaigns are inexpensive and although they are a smaller audience, they tend to work best, Knope said. Just like with direct mail packages, DRTV programs must be tested, analyzed carefully, and revised.

* Fulfillment. The telemarketing end of the program should be relationship driven, not cost driven, according to Knope. It also must be sensitive, understanding, and a well-oiled machine, he added. Both effective and efficient daily reporting and data transfers must also be provided to ensure success.

* How to measure success. Knope said success is measured through cost per lead (CPL). The industry standard CPL is $40 to $100. Organizations are "less and less looking at this and more and more looking at monthly donors," said Knope.

The cost per donor ranges from $80 to $200 (or 30 to 60 percent); the fulfillment rate (40-70 percent); the attrition rate (12-25 percent) and the lifetime values range from $1,500 to $3,000.

The Typical, Long Form DRTV Show

* Cost Per Lead: $50

* Cost Per Donor: 40%

* Attrition: 20%

* Production: $250,000

* Media: $1,000,000

* Break-even: 16 months