Best Practices - PowerPoint PPT Presentation

Loading...

PPT – Best Practices PowerPoint presentation | free to view - id: 16cd3-MGRiY



Loading


The Adobe Flash plugin is needed to view this content

Get the plugin now

View by Category
About This Presentation
Title:

Best Practices

Description:

Mother's Day. Religious Holidays. Seasons. Back to School ... The best prospect is someone who is older and on the file 5 years and with 2 gifts per year. ... – PowerPoint PPT presentation

Number of Views:56
Avg rating:3.0/5.0
Slides: 66
Provided by: MichaelR218
Category:
Tags: best | day | gifts | mothers | practices

less

Write a Comment
User Comments (0)
Transcript and Presenter's Notes

Title: Best Practices


1
Best Practices in Direct Response Fundraising
21st Annual Fundraising Day in Maryland Raymond
J. Grace Chairman and Founder Creative Direct
Response rgrace_at_cdr-nfl.com
2
What we will be discussing today
  • Should you exchange your donor list?
  • Are premiums a good idea?
  • How much/how often should you mail?
  • Other topics including questions youd like to
    discuss

3
Topic One Exchanging Lists
We would never exchange our list. That is our
most precious asset. And if we did, it would
only hurt our own revenue!
4
Lists
3 Ways of Obtaining Addresses
Rent names (not buy) for one time use
only Re-use names re-use a list from previous
merge/purge Exchange names exchange names for
one time use only
5
Lists - Costs
  • Exchanged Donor Lists
  • Price is approximately one fifth of the price of
    rental names because the only payment made is the
    brokerage fee.
  • Commercial lists of direct mail responders
  • Prices generally range anywhere from 70/M to
    130/M. Email lists are considerably higher.
  • Compiled lists
  • Price is approximately 35/M to 55/M, results
    vary based on list and whether modeling is used.

6
Lists
Exchanging Names
  • Organization A delivers names to organization B
    for Bs mailingOrganization B delivers names
    back to organization A for As mailing
  • same quantity
  • same selection
  • costs are only the exchange fee for the broker

7
Lists
Exchanging Advantages
  • Less expensive, only pay exchange fee (around 20
    of average list price). Will help reduce your
    overall list cost.
  • Donor names generally have a higher response rate
    than any other lists, but not necessarily higher
    average gift.
  • If you dont exchange names, you will be renting
    the names at a higher cost.

8
Lists
  • Wont we be diluting our list by exchanging with
    other charities?
  • Your list was built by renting names from the
    same lists that are available to everyone.
  • Almost every name is on more than one list.
  • You dont have exclusive rights to the name, only
    to the names on your list.
  • Extensive long term tests show no negative impact
    on future response.

9
Lists Exchange/Rental Results
  • Cancer Research Charity 5 year split test of
    own housefile comparing rented and exchanged
    names vs. not rented. Names that were rented did
    better.
  • American Lung 90 of names not
    rented/exchanged, 10 rented/exchanged for 10
    test chapters to see effect. Organization
    changed policy to rent/exchange names after the
    test.
  • Veterans Charity Tested and retested over past
    30 years. Rented/Exchanged names did better than
    non-rented or exchanged names.

10
Lists Exchange/Rental Results
  • American Heart Association Results
  • Year 1

11
Lists Exchange/Rental Results
  • American Heart Association Results
  • Year 2

12
Lists Exchange/Rental Results
  • American Heart Association Results
  • Year 3

13
Lists
  • In summary, exchanges are a good business
  • strategy for non-profits. The benefits are
  • List costs reduced
  • Quicker growth of your donor file
  • More net dollars for your programs
  • Studies have shown that most donors give to a
    minimum of three charities. Your donors are not
    unique to your organization.
  • Exchanging/renting names does not hurt
    performance.

14
Lists - Renting
  • Renting your names is another way to reduce
    acquisition costs.
  • AHA Rental Income
  • 2.7 million names on the market
  • Rented 19,000,000 names
  • AHA rental income for FY2003 was 1,100,000.
    Lowered acquisition name costs by this amount.

15
Everyone knows that premium donors arent as
good donors as mission based appeal donors they
just dont have a good long term value.
Topic Two Premiums vs. Straight Letter
16
Premium vs. Non-Premium
  • Some of the myths and facts surrounding premiums
  • What is a premium and how does it work?
  • Who uses premiums and why?
  • When should premiums be used?
  • What are rules for selection?
  • What pitfalls are there and how are they
    overcome?
  • How are premiums incorporated into successful
    mail plans?
  • What are the exceptions to the rule?

17
Premium vs. Non-Premium
  • Some of the myths and facts surrounding premiums
  • Premiums often have a negative response.
  • A sound look at some real examples and results
    could change your outlook.
  • Should your organization use premiums? Answers
    vary.
  • Premiums are not relatively new they have been
    around since 1926.

18
Premium vs. Non-Premium
Calendar
Key Chain
Examples of Premiums
19
Examples of Premiums
  • Address Book
  • Beans
  • Book
  • Bookmark
  • Bumper Sticker
  • Calculator
  • Calendar
  • Candle
  • Cards
  • Charms
  • Check
  • Clock
  • Coffee
  • Coin
  • Crayon
  • Cross
  • Flag
  • Grocery List
  • Key Chain
  • Magnet
  • Magnetic picture frame
  • Mass/prayer cards
  • Membership card
  • Mobile
  • Necklace
  • Notepad
  • Ornament
  • Paper flower
  • Pen
  • Pencil
  • Petition
  • Photo album
  • Photo of famous person
  • Picture frame
  • Pin
  • Postcards
  • Poster
  • Post-it notes
  • Prayer Book
  • Ribbon
  • Rice
  • Rosary card
  • Seeds
  • Sewing Kit
  • St. Christopher Medal
  • Stamps/Seals
  • Static Cling decal
  • Stationary
  • Stickers
  • Teabag
  • Tip calculator
  • Tissues
  • T-Shirt
  • Wallet calendar
  • Watch
  • Watch/Calendar Combo
  • Wooden cross
  • Wrapping paper

20
Premium vs. Non-Premium
  • Who uses premiums and why?
  • 75 of lists work with premiums
  • Premiums work!
  • Excellent name placement
  • Should try to relate premium to mission and copy

21
Premium vs. Non-Premium
  • Who uses premiums and why?
  • Higher response rate compared to those mailings
    without premiums.
  • Builds a donor file quickly.
  • Total net is higher than those mailings without
    premiums.

22
Premium vs. Non-Premium
  • When should premiums be used?
  • Depends on your organization
  • Tie into events and Holidays
  • ChristmasEasterMothers DayReligious
    HolidaysSeasonsBack to School

23
Premium vs. Non-Premium
  • When should premiums be used?
  • Examples of good tie ins based on calendar events

Mothers Day
Christmas
24
Premium vs. Non-Premium
  • What are rules for selection?
  • Use premiums that relate to the mission or
    program of the organization.
  • Select premiums that can be inserted by using
    vendors who can do large volumes of handwork.
  • Weigh the costs for extra postage, inserting,
    and the premium.

25
Premium vs. Non-Premium
  • What are rules for selection?
  • Use the magic word free in the copy.
  • Prevents misunderstandings.
  • The reply envelope should be smaller than the
    premium.
  • Test gift asks because the premium will usually
    return twice the percent return, but lower
    gift average.

26
Premium vs. Non-Premium
  • What pitfalls are there and how are they
    overcome?
  • Not all premiums respond equally.
  • Premiums rarely work with advocacy and political
    appeals
  • Look at the predicted results - Increased
    revenue offsets costs. - Higher response rate
    makes extra time worthwhile.

27
Premium vs. Non-Premium
  • What pitfalls are there and how are they
    overcome?
  • Examples of a charity which used various
    premiums with one outperforming the others

Coin
Cards
28
Premium vs. Non-Premium
  • How are premiums incorporated into successful
    mail plans?
  • Use a mix of premiums and non-premium mailings.
  • Audiences overlap

Audience A
Audience B
A B
29
Case History
labels
30
Case History
Acquisition/Prospecting Test
Pieces 50M50M
Package LabelsSt. Ltr.
Cost/M 727.31607.31
Return 5.832.39
Average 18.7621.21
Package LabelsSt. Ltr.
New names 2,9151,195
Net 18,302-5,039
Result 44 better return
Currency is in Canadian Dollars.
31
Case History
Projected LTV and ROI results
Labels 2,915269,30494,712174,591 60184
Straight Letter 1,19577,90555,47422,431 19
40
Donors from testTotal gross income Total cost
Total net income Long Term ValueReturn On
Investment
Values include results from acquisition and 6
years of renewal mailings.
Currency is in Canadian Dollars.
32
Case History
ABC Charity
Acquisition/Prospecting Test
Pieces 732M1,463M
Package PremiumSt. Ltr.
Cost/M 610580
Return 4.102.05
Average 8.7511.87
Package PremiumSt. Ltr.
New names 30,00030,000
Net -184,024-492,557
33
Case History
ABC Charity
Projected LTV and ROI results
Premium 30,0001,519,433965,471553,963
Straight Letter 30,0002,051,8911,468,910582,
980
Donors from testTotal gross income Total cost
Total net income
Note
The cost of the straight letter acquisition was
higher because more pieces were mailed to obtain
30,000 responses. The house file donation
averages and response rates are higher than the
acquisition results.
Values include results from acquisition and 6
years of renewal mailings.
34
Case History
ABC Charity
Projected LTV and ROI results
Premium 60,0002,889,0841,484,4341,404,650 1
8.4757.4
Straight Letter 60,0003,651,9742,089,2691,56
2,706 19.4339.7
Donors from testTotal gross income Total cost
Total net income Long Term ValueReturn On
Investment
Into which program would you invest the one
with higher LTV or the one which would make more
money, i.e., greater ROI?
Values include results from acquisition and 6
years of renewal mailings.
35
Case History
Break Even Points
36
Topic Three How Often to Ask
We would never ask our donors for money more
often than four times per year. To do otherwise
would wear out our welcome and anger our donors.
37
  • Donors need to be treated like part of the
    charitys family therefore, regular
    communication is necessary if your client wants
    them to remain a part of their family for a long
    time.
  • The donor mailing / newsletters job is to
    secure donations, whilst keeping the donors up to
    date on what their money has been doing. The
    more personal the details, the better your
    returns will be.

38
  • Mass marketing is a numbers game. When an
    organization starts mailing, costs are high
    because of small mailings, plus having to rent
    all of the prospect lists.
  • If a house file grows quickly, higher volumes
    will be mailed, making everything cheaper,
    leaving an organization to spend more on programs
    and less on mail costs.

39
Average life of a donor is three to six years, so
you are in a race to do a few thingsA. Keep
the file growing while attrition sets in (35
per year in the first three years, lower
thereafter).B. Secure as much revenue from the
donors as possible because many will leave after
several years. Donor fatigue.C. Get the donor
to donate at least twice per year. Many first
time donors never donate again, but donors who
donate twice or more stay with an appeal for
years, as well as leave money in their wills.
Convert as many as possible to monthly.
40
  • Net Dollars the strongest argument for mailing
    often is net dollars to the charity.
  • Mailing more often increases net revenue, not
    decreases it.
  • Dont fail to mail your monthly donors 2 4
    times per year they will become your best
    performing segment and you will see reduced
    attrition.

41
Example of a Response Curve
42
Frequency of Mailings
Effects of Overlapping Drops
Doubling day
Lost Revenue
Response
Days from mail drop
43
Miss a Mail Date?
Effects of Missing Mail Dates
Response
January
December
April
August
Month
44
Miss a Mail Date?
Effects of Missing Mail Dates
Response
January
December
April
August
Month
45
Miss a Mail Date?
Effects of Missing Mail Dates
Response
January
December
April
August
Month
46
Miss a Mail Date?
Effects of Missing Mail Dates
Response
January
December
April
August
Month
47
Thats 12 Mailings Per Year
  • Isnt That Too Much?

48
A Call From A Pastor In Texas
  • He called to express his concern about how MADD
    was wasting money with all these solicitations.
    I listened politely then asked him the following
    question
  • As a pastor, do you include in each service time
    to pass the donation plate?
  • His answer was yes!

49
If You Do Not AskThey Will Not Give
50
The Bucket Has A Hole In It
  • ? New Donors Acquired
  • ?Current Donors
  • ?Donors Cease Giving
    (Attrition)

51
How often you should ask depends upon your goals
  • MADD wants to get its message out to save lives.
    So does National Breast Cancer Foundation.
  • Others want to optimize net income.
  • Others want to reduce costs of fundraising.

52
Other Best Practices in Brief
  • Except for the very largest nonprofit mailers,
    for which charity response lists are not
    sufficient, the use of geo-demographic modeling
    has not generally proven useful in prospecting
    for new donors. For some medium sized and larger
    nonprofit mailers, modeling may be useful to
    improve upon RFM (Recency, Frequency, and
    Monetary) segmentation techniques and identify
    lapsed donors who may be worth mailing.

53
Other Best Practices in Brief
  • While you may want to reduce the number of
    renewal mailings to monthly committed donors,
    you should probably still mail them about four
    times per year rather than removing them
    entirely. You can insert a lift note that says
    we recognize you are a loyal monthly donor but
    we thought youd be interested in information
    about some of our programs. This is not in lieu
    of but in addition to any newsletters they might
    receive.

54
Other Best Practices in Brief
  • When looking for potential deferred giving donors
    the most important variables are not average or
    most recent gift or even some type of wealth
    index. The most important variables are age and
    frequency of giving. The typical bequest comes
    from someone who is older and has been giving to
    the charity regularly over a period of years. By
    far the most frequent deferred or planned gift is
    a simple bequest. The best prospect is someone
    who is older and on the file 5 years and with 2
    gifts per year.

55
Other Best Practices in Brief
  • Why should you look for potential deferred giving
    donors? Because there are literally Trillions of
    dollars that will be transferred by bequest over
    the next generation and fewer than 1 of
    charities even ask for money in the form of
    deferred giving.

56
Other Best Practices in Brief
  • There is some dollar average level for each
    non-advocacy charity and some advocacy charities
    where acknowledgement letters with reply devices
    will break even or be profitable. How quickly
    gifts are acknowledged is directly proportional
    to the response rate to an additional
    solicitation in those acknowledgements. The
    faster the acknowledgement the higher the
    response rate.

57
Other Best Practices in Brief
  • Whether to use a BRE (Postage pre-paid Business
    Reply Envelope) or a RAE (return, address
    envelope) is a testable question that varies over
    a period of time and for each charity. Just try
    each against the other in a head-to-head test and
    be sure to measure the additional costs per reply
    for the BRE but spread those costs across the
    entire mailing costs to determine your costs in
    the mail and your net income/1000 letters mailed.
    Generally the BRE works better for higher dollar
    donors and for Acquisition and not as well for
    donor renewal.

58
Other Best Practices in Brief
  • Try follow-up mailings to your regular appeal,
    particularly if your mailings are well spaced
    out. Often follow-up mailings will produce as
    much as a 50 or greater lift to the initial
    appeal. Follow-ups are mailed between 2 and 4
    weeks after the initial appeal, typically to the
    better donors who received the initial appeal,
    reminding them that they might have not yet
    replied and asking them to do so. The theme of
    both mailings should be identical or strongly
    related. The follow up works best when you
    follow up thick or lumpy original premium
    packages but cut the real low dollar names out of
    the process.

59
Other Best Practices in Brief
  • Upgrading individual donors is a good idea.
    Thus, for example, an upgrade test might be to
    take the most recent gift times 1.2 or 1.4 and
    include that in the personalized ask.
    Upgrading an ask string (10.00, 15.00, or
    _____ vs. 20.00, 30.00 or _____) is quite
    different from upgrading an individual donor.
    Such ask string upgrades should be carefully
    tested because often they gain a higher average
    gift at the expense of a lower response rate.
    Make sure your computer instructions have the
    ability to use different multipliers for higher
    dollar donors or to reduce the upgrade at some
    point. The general rule is you will eventually
    get what you ask for but dont push too hard too
    fast.

60
Other Best Practices in Brief
  • Try an action item or involvement device to
    increase response rates. This might be a
    bounce-back card to a victim or person
    suffering from a disease that the charity is
    trying to help. It gives the donor the
    opportunity to feel that they are interacting
    directly with the beneficiary on a one-to-one
    basis. Other examples would be petition
    mailings, surveys, and requests for certain
    prayers or remembrances.

61
Other Best Practices in Brief
  • Make sure your message and look are fully
    integrated. Do you use the same colors and
    artwork for your logo and put your web address on
    your letterhead, website, annual report, direct
    mail letters, and any other communications with
    others. Consistency in communications is the
    first step (though not the last) in integrating
    your marketing program.

62
Other Best Practices in Brief
  • Direct mail can be an element in both employee
    workplace giving and certain cause related
    marketing campaigns. Just use your imagination.
    For example, what about a payroll stuffer to go
    into the payroll envelope which contains a letter
    to the employee asking them to sign up for a
    payroll gift to a charity or to make a single
    gift? It doesnt require postage or a carrier
    envelope so it can be inexpensive. What about
    getting a corporate sponsor to allow you to put
    your brochure with a tear-off donor coupon into
    their monthly billing statement?

63
Other Best Practices in Brief
  • Attendees at special events put on by a charity
    rarely respond to a mail appeal for giving as
    well as your direct mail built housefile.
    However they often respond as well or better than
    a good prospect list. Therefore, capture names
    and addresses at your special events and it will
    help you build your housefiles. Lists of
    visitors to museums or charity projects will also
    work well in prospecting if you mail them soon
    after the visit.

64
Other Best Practices in Brief
  • For most charities, there is greater growth
    opportunity from direct mail and 15 donors than
    there is finding that elusive 150,000 or
    1,500,000 donor. There is also a longer term
    stability and predictability from the lower
    dollar donors. From the direct mail housefile
    come the majority of the planned gifts of
    tomorrow, especially if you are not a college or
    club. Remember the closer the relationship with
    the donor to the charity or its representatives
    the better your chances for any gift. Similarly,
    the more donations and the longer they have
    donated to your organization the better chance
    you have to secure gifts by other channels (e.g.
    capital, major donor) because they have built a
    relationship with the charity and you have
    already cultivated them by mail.

65
Questions or New Topics
The only bad question is the one which wasnt
asked. Electronic copies of this presentation
available to all. Simply leave your business
card and I will e-mail you instructions for
downloading it from our FTP website.
About PowerShow.com