(Richard A. Viguerie and David Franke) – Most people think that the sole purpose of direct mail in political campaigns is to raise money. That’s important, of course, but direct mail is also an advertising tool, as we explain in this excerpt. As you will see, it’s a cheaper and more efficient form of advertising than the political campaign ads you see on television.
Direct mail is also the advertising medium of the underdog and the non-establishment candidate—and most true conservatives still fall into that category. It enables organizations or causes not part of the mainstream to get funding.
Finally, the advertising concept of the “lifetime value” of a customer is of critical importance to the success of businesses—be they small neighborhood stores or something as huge as Jeff Bezos’s Amazon.com. A smart candidate or campaign manager will understand that lifetime value is just as important in politics, where the “customer” is the voter.
Direct mail: more than fundraising
Imagine how you would become a credible candidate for federal office without the help of direct mail. One possible route would be to serve as a toady of your local GOP or Democratic organization for years and hope to get their support; presumably that party support would then bring in enough funds to pay for those expensive television ads to get your message to the public. Alternatively, if you have enough money – if your name is Steve Forbes or John Kerry, for example – you can take a shortcut around the party organization and spend your excess millions on TV ads, hoping that the TV ads alone will generate workers for your campaign as well as general public support.
Thanks to direct mail, those are no longer your only options. You don’t have to be a multimillionaire or an ideological agnostic to run for office.
To this day, too many people persist in thinking of direct mail only as a fundraising method. It’s really mostly advertising – and usually the most efficient form of advertising.
Raising money is always one purpose of a direct mail campaign – but it’s only one of several purposes. A letter may ask you to vote for a candidate, volunteer for campaign work, circulate a petition among your neighbors, or write letters or send faxes to your senators and representative. To encourage you to take action, a direct mailing will tell you about some of the compelling issues in the campaign and where the candidate (and his opponent) stands on those issues.
That is advertising, and it is far cheaper than television advertising – in both the initial outlay required, and the net cost. Television ads cost so much because the message is going to everyone who turns on the tube, whether they’re interested or not (and most won’t be, instead using your ad as an opportunity to channel surf or quickly grab a snack). Political direct mail advertising, in contrast, through wise list selection goes almost entirely to people who are predisposed to agree with you on the issues or candidates, people who are open to persuasion to support your cause.
That’s not all. Direct mail is the form of advertising that is most effective at paying for itself. In effect, the people whom the campaign mails to will pay for the advertising themselves, by responding with a check. With TV, in contrast, the outlay cost is much higher (for reasons we’ve already given) and it’s not likely that any of that cost is going to be underwritten by the people watching your commercial. A 30-second or 60-second spot simply is not enough time to convince a person to write a check. A good eight-page letter will beat a TV spot every time because it gives compelling reason after reason after reason for someone to part with their money. So, if you want to go the expensive TV-ad route, you have to foot the bill yourself or find some rich folks to fork up the money. And you know the saying about paying the piper.
These are some of the reasons why direct mail is the advertising medium of the underdog and the non-establishment candidate. It enables organizations or causes not part of the mainstream to get funding.
The irony is that so few self-styled “consumer” groups or publications understand how direct mail works or appreciate its importance for the underdog. In most cases, the “consumer advocate” tag is a means for getting subscribers and then most of the funding comes from the big-bucks advertisers who take out ads in the publication to reach the subscriber. The publication’s real allegiance is to those big-bucks advertisers. In other cases, the explanation is ideological – you can safely bet your milk money, for example, on the proposition that any time the liberal AARP talks about conservative direct mail, the operative word will be “expose.” But even a generally sound consumer publication can get confused.
Kiplinger’s Changing Times, for example, once wrote about conservative direct mail efforts in an article entitled “Dear friend, Send money”: “Using the mails is an expensive but increasingly popular way to raise money for political causes and candidates.” This statement begs the question: If it’s so expensive, why is it increasingly popular? The answer, of course, as we’ve shown, is that direct mail is the cheapest form of advertising and fundraising, and that is why it is “increasingly popular.” The times indeed were changing, but Changing Times just didn’t get it.
The two main reasons some otherwise smart people didn’t “get it” then and still don’t get it now are (1) they don’t understand that direct mail is as much advertising as fundraising, and (2) they don’t understand another critical marketing concept: the lifetime value of a donor or customer. We’ve paid attention to the first misunderstanding. Now let’s take a look at the concept of lifetime value.
Any successful business has to take “lifetime value” into account. This simply means that your first contact with a customer is likely to be a loss; you start making money when the customer is pleased enough to return and do business with you again and again, many times in the future. If all your customers patronize you only once, you’ll soon run out of customers and will have to close shop.
A successful small business owner recognizes this imperative by providing friendly, helpful customer service, convenient hours of operation, and competitive prices. With a big business manager, the experience may be less personal, but the lifetime value concept still holds. When Marriott builds a hotel for $10 million, it doesn’t check the receipts for the first night the hotel is open and say, “Well, we only brought in $10,000 and it cost us $10 million, so let’s blow it up. It doesn’t work.” Management recognizes that it may take six, seven years to recover its investment.
People generally understand this principle when it’s practiced by high-profile businesses. Jeff Bezos of Amazon.com understands the lifetime value of a customer – that he may have lost money the first time you bought a book or CD from him, but over time you may spend thousands as a customer. Steve Case of America Online floods America with those “1000 free hours” disks. He’s prepared to spend a dollar and bring in 20 cents at first, losing 80 cents, because he’s buying a share of the market and he’s buying (he hopes) your lifetime value as a customer.
We go into the concept of lifetime value in detail because some people seem to think that marketing rules change when the “business” is a nonprofit cause. But the rules don’t change if you desire long-term success for your cause or movement. When The Viguerie Company applied direct mail to ideological politics, it also applied the business concept of lifetime value to politics. Neither had been done before, so some people simply didn’t understand what was going on. And of course some people had a vested interest in spreading misunderstanding – such as the TV behemoths and big-city papers, which were losing advertising money to direct mail, and the liberal media gatekeepers, who were losing their political vetting clout.
In politics, as with business, of course, the more long term your outlook is, the more important lifetime value becomes. If you are selling Christmas trees by the highway, or setting up in a vacant space at the mall to sell new year’s calendars, you don’t worry much about lifetime value. In a month or so you’re going to be out of there. It’s the person who wants to stay in business come January 1 who should be concerned about lifetime value.
The political equivalent of the Christmas tree stand, you might think, would be a candidate’s political campaign – here for a couple of months, then over. But the analogy only partially works. First, the candidate naturally hopes he will win, so he’ll want to get his “customer” (the donor) to support him again in his future re-election efforts. Even if he loses, he may have campaign debts to pay off, and he may plan on running a larger, more effective race in the next campaign season, so current donors still have lifetime value.
When dealing with short-term political campaigns, it’s important to remember that you generally don’t make money with your first mailings, but rather with repeat mailings. It is, therefore, critically important that the candidate start his direct mail campaign as soon as possible – before the formal campaign launch date, with a “draft” or “exploratory” direct mailing that can be rolled over into the campaign effort after launch.
In direct mail parlance those initial mailings are called “prospect” or “acquisition” mailings: You are mailing to lists assumed to be sympathetic to find the good folks who will actually contribute. They always constitute a relatively small portion of the list, which is why these “prospect” or “acquisition” mailings will likely “lose” money. But you then add those donors to your campaign “house list,” and when you mail to your “house list” in a few weeks you are mailing to people who have already demonstrated their willingness to support you. That’s when you make the money with which to run your campaign. Today a 2 percent to 3 percent response may qualify a prospect mailing as a success, whereas a mailing to your “house list” can generate a 10 percent to 20 percent response, or even more.
In politics, the lifetime value concept is most important, of course, for organizations, groups, and causes that hope to be around for a while. Conservative organizations recognized this early on, and used direct mail to build a long-term political movement. Since liberal organizations, as well as the Republican and Democratic parties, learned from the success of the conservatives, it is fair to say that the “lifetime value” concept has now been firmly established in the realm of American politics.