I was astonished one day earlier this year when my wife Peggy showed me an envelope with the following teaser in a demure blue handwriting font:
Mr. Hatch, make one gift and we'll never ask for another donation again.
In my opinion, this is a Nutsy Fagan business model—like the mythical bird that flies in ever-decreasing circles until it disappears up its own cloaca.
About Direct Marketing
"As direct marketers, we're not here primarily to make a sale; we're here to get a customer," wrote the late direct marketing guru Joan Throckmorton. "Sales are important, of course. (Where would marketers be without them?) But the name of this game is repeat sales rather than one-shots."
Having cut my teeth on copy and design creating dry tests for start-up magazines, I was acutely aware of the basic direct marketing arithmetic: expect to lose money on getting a subscriber and start making a profit on renewals.
Throckmorton's rule is true for all direct marketers—consumer, business, nonprofit and cataloger. A 10-word mission statement for every business in the world should be: "Acquire a customer and then create CRM (Customer Relationship Magic)."
The aforementioned envelope came from SmileTrain ("Changing the World One Smile at a Time"), whose ubiquitous space ads are brilliant. Thumbing through a magazine, you cannot help but be moved when you come across photographs of babies and young children with grotesquely deformed faces and pleading eyes.
The immediate reaction of any thinking, feeling person: GUILT. The idea that this could be my child is too awful to contemplate. "There but for the Grace of God ..." You send cash, hoping your financial help will make the world a little better place.
Check out the box on the SmileTrain order form (in the media player at the right). SmileTrain's CMO Brian Dearth told Chronicle of Philanthropy that "the 'one gift' offer, as the solicitation is called, proved so effective in 2008 tests that it's now used in all of SmileTrain's mailings to recruit donors."
A Competitor's Outer Envelope
Consider the outer envelope of another nonprofit, Save the Children:
YOUR ATTENTION IS URGENTLY NEEDED
In the next 24 hours, almost 30,000 children under five will die—most from preventable diseases.
Save the Children is in the guilt business just like SmileTrain. But the nonprofit is absolutely clear what it is about: saving children and making the world a better place.
SmileTrain does soft extortion: "We're a pain-in-the-neck fundraiser that will continue to fill your mailbox with crap. But give now and we'll go away."
What's the difference? SmileTrain has $93 million in annual revenue whereas Save the Children's revenue is $446 million.
Which business model makes sense?
Denny Hatch is a freelance direct marketing consultant and copywriter, and author of the Business Common Sense e-newsletter. Visit him at www.businesscommonsense.com or www.dennyhatch.com, or contact him via email at email@example.com.