Navigating the Stormy Supply Chain Seas

Who could have imagined several years ago that the term “supply chain issues” would become such an integral part of our vernacular that you hear not just in business meetings, but in the aisles of the grocery store and in our day-to-day conversations?

According to Accenture:

• 94% of Fortune 1000 companies are seeing supply chain disruptions from COVID-19.
• 75% of companies have had negative or strongly negative impacts on their businesses.
• 55% of companies plan to downgrade their growth outlooks (or have already done so).

As fundraisers, it was a challenging fall season in 2021, and while theories abound regarding improvements on the horizon, there does not seem to be any relief coming soon. This could have big consequences for your direct mail program, where a significant amount of your fundraising budget depends.

By now we have all seen how supply chain issues are impacting the following industries key to direct mail delivery:

• Paper production
• Raw material shortages
• Shipping and trucking delays
• Fuel cost skyrocketing
• Staffing shortages particularly in manufacturing industries
• USPS delivery delays

What conversations should you be having with your fundraising partners to determine how you can work together through these challenges? How are they responding to protect and support your direct mail strategic goals? Specifically, ask these 4 questions:

1. How far in advance are materials being ordered?

At TrueSense Marketing, we have been ordering paper and materials not only in large quantity, but also well in advance. Currently we are ordering materials approximately 9 months in advance. We know that there are risks in this approach, but it is more important for us to be able to do whatever we can to execute our clients’ direct mail campaigns on time.

1. What happens if a component is not available?

Advance ordering helps to mitigate this problem. But if a component (for example: labels, plastic cards) is not able to be delivered on time, our Strategy, Creative, and Production teams quickly determine an alternate course of action. Can the piece be mailed without the component without jeopardizing strategy, or is a pivot to a completely different approach necessary?

1. How nimble are your print/lettershop partners?

If a pivot is necessary, can they adapt? Or is the only option to eliminate the campaign? If a specific paper stock is not available, for example, we are able to quickly adjust by accessing our extensive in-house inventory to protect the mail date. Changing stock color or texture has less negative impact than completely losing a touchpoint with a donor. Having access to our own print and lettershop means our clients’ work is always priority, versus it being one of many obligations of an outside partner.

1. How will you measure the impact of adjusted tactics?

Any significant adjustment to a direct mail tactic that has not been tested always causes concern. Direct response fundraisers are always wary about making changes that deviate from the control. But in today’s environment, those concerns must be weighed against the prospect of not communicating at all to loyal donors.

In the event a major adjustment to a direct mail package is necessary, it is imperative that results are carefully monitored (admittedly difficult with the pandemic-influenced performance of the last two years) and that permanent decisions are not made based on a narrow range of data points.

For example, if labels had to be dropped from a direct mail package in order to meet a mail date, the review of the results must be thoughtful. If performance at first looks “improved” over the original control, make sure that your conclusions go beyond simply response rate and net revenue. Analyze the impact on average gift, lifetime value, and audience/segment performance. Subsequent testing should be considered, if possible, to validate the decision.

While no one knows exactly what the future holds, or when things will return to “normal,” working with your partners and asking the right questions now will go a long way to navigating through this difficult time. A strong strategic plan and transparent communication will make your partnerships even stronger.