What Natural Gas and Email Have in Common
	Posted by Miriam Kagan at Apr 25, 2012 01:14 PM CDT Categories: Fundraising, Nonprofit Trends

Confession time: when I am not thinking about everything fundraising, I am a part-time energy economy dork. Meaning, I spend a lot of time thinking about carbon consumption, energy mix, whether it will be resource scarcity or technological progress that might one day wean humanity from carbon…

As a direct marketer, I’ve spent a large portion of my career in traditional marketing (Direct Mail (DM), Telemarketing (TM), and a little direct response TV). Early on, my inner tree hugger had to reconcile the millions of trees that it took to get DM campaigns with 5% response rates out the door with the cold reality that it was this sort of marketing that was the lifeline of many organizations’ revenue.  I secretly hoped that at least those other 95% recycled….And I couldn't help but draw parallels in my mind about marketing channel mix and energy. 

In my mind, the comparison works this way:
DM=oil
TM=coal
DRTV=Nuclear
Email= Natural gas
Mobile, social, geolocation= solar, wind, geothermal

In the energy marketplace, coal and gas are still king. Get rid of either one of these and most of our houses won't have electricity, most of our cars won't drive.   Over the years, both energy sources have become more efficient—gas mileage for cars has improved, coal power plants have been forced to implement all sorts of clean coal technology, but we may at some point run out of both while complete non-reliance is years, and likely decades away.  Sure, there are the outliers: people living “off the grid”, whole villages in Africa using solar cookers, but largely, we all sigh and agree that while progress is made toward other forms of energy, coal and oil are in our lives. 

Starting to sound pretty familiar? So direct mail and telemarketing  (offline) for the large part rule the roost. Perhaps not the cleanest or most glamorous, but they power the revenue engine.  And sure, there are also the nuclear believers—folks who've made DRTV work on a sustainable basis, but like the Frances of the world, they tend to be the outliers in the traditional revenue power equation.

And then there is the current energy industry darling, email, ahem, I mean natural gas…. The cleaner, cheaper,  newer kid on the block, with the potential to replace some of the older sources, and in some instances, doing so quickly.  It is also the one folks who are used to coal and gas are most comfortable with. Traditional marketers have for the large part embraced email as part of their marketing mix and are recognizing this channel as increasingly the driver of growth in revenue, donors, and reach for organizations. 

What about solar, wind, and hydrogen?  They are the energy gold rushes of the modern century, with folks thinking there are millions to be made, but turning out to be more complicated, slower to take off, and requiring huge economies of scale.  And the reality of these industries is even they will never be truly independent--we need to account for what might happen on non-windy days, or cloudy ones. Under the right circumstances (disaster fundraising for example) there is money to be made, and the technologies are evolving, but for most organizations they still constitute a very small percentage of the revenue mix and are mainly a constituent engagement tool for now.

How do countries (and organizations) approach energy (channel) mix in an environment that seems more in flux than ever? I am not going to claim to have the answer, especially because for the largest countries (organizations), this is the more difficult to navigate with so many stakeholders involved.   But a few thoughts:

• A wholesale abandonment of investment in the sources powering the economy isn't the way to go in the hope that the other sources will become scalable “soon enough.” From a direct marketing perspective, this means to me that if DM and TM are a large chunk of your revenue, some level of investment and maintenance has to continue.  Many organizations learned this the hard way during the acquisition cuts of 2008-2009 trying to save money during the economic downturn. Organizations are still digging out from the impact this had on their houseflies and the lasting impact on their revenue.
• Invest at a faster rate in the new channels and allow for the learning curves. New technology is going to be more expensive. Campaigns aren't going to work like you thought they would.  But, if reliance on a source whose growth potential is diminishing is not the goal, then not only must programs, but also channels diversify at a faster rate than might be comfortable.  I am not saying jump into say mobile head-first, spend a lot of money, and hope something happens. In fact, the strategist in me would kick you if you did. But plan for the investment you will have to make in these channels and the systems and technologies that will be required to support them.
• To reinforce the two points above, "conservation" alone is not the solution. As a colleague put it: "you can't conserve your way into infinity with energy plans, just like you can't cut all marketing to 'save' money. It will in fact do the opposite. Ultimately, for both, you have to expand the options not reduce them to continue to grow."
• You don't have to keep up with the Joneses. Try to stop looking at what your neighbor is doing. I mean, if she just installed some solar panels, go on over there and find out what they are, but think about whether they are right for you before rushing to install them. Maybe the city is planning to install them for you anyway?  Or maybe your house isn't facing in the right direction. Maybe you are a great candidate for geothermal heating!  The best example I can think of this is the rush to “communities” a few years back where lots of folks invested in “closed” communities, only to have it turn out that folks were elsewhere, say Facebook, and had no desire or impetus to join others. And most organizations that spent money developing their own have had to let go of those and focus on herding their sheep in someone else's social pastures.

Bottom Line:  Not everyone (or organization) has the same access to, or need of, the various fuel types (channel types).  So it is important to understand what is necessary and achievable within your own environment, and not rushing to be a fast follower just because everyone else is doing it.  In the end, it will take a blending of each to establish energy (fundraising) equilibrium, and the recipe could be quite different from one nation (organization) to the next.