3 Answers about Acquiring New Donors Through Direct Mail
Acquire new donors. It's a directive that every fundraiser has heard, especially in the recent era of financial instability for nonprofit organizations and donors alike. And it was the topic of a recent DirectMarketingIQ webinar entitled "Acquiring New Donors through Direct Mail: Best practices and case studies from leading fundraisers." (Click here to access the webinar, as it's still available on-demand.)
So, which direction to go with that directive? There seems to be so many more options, with the emerging channels of email, mobile and social media, but in truth, especially for donor acquisition, direct mail remains the dominant marketing medium.
Speakers Bob Merrigan — President of Merrigan & Co., a Kansas-City based firm specializing in strategy and messaging for non-profits — and Michael Rooney — a partner at Integrated Direct Marketing, a full-service direct marketing agency that partners with nonprofit organization — tackled how to go about acquiring new donors for 60 minutes before being flooded with questions from attendees.
Here were a few highly relevant questions, and then answers:
Question: Have you tested or have you seen a difference in response rate or retention between freemium-acquired donors and those who respond for the back-end premiums?
Merrigan: Generally, acquisition response rates are higher with a freemium (or premium) offer than with a straight appeal. One reason is that the package may draw extra attention, particularly if it's a "lumpy" envelope and the recipient wonders what's inside. Another has to do with Cialdini's principle (weapon of influence) of reciprocity; you've given the recipient something, and it's only natural to feel the urge to reciprocate.
This is not always the case. For a client who typically offers a calendar as a backend premium, we tested sending it out as a freemium (swaggeringly confident the test would win, I might add). In fact, donor response rates were about 75 percent lower for the freemium package than the control, both among prior donors and our acquisition list.
And, generally churn tends to be higher among premium-acquired donors than among respondents to mission-based appeals. While premiums are attention-getting, it's often difficult to create a "fit" with the organizations mission ... and the further removed that initial response is from the organizations raison d'etre, the more difficult conversion is going to be.
There are two tendencies (I don't know if we can call them trends yet or not, but I think they will become so) that seem to exacerbate this:
1. As organizations go to more and more expensive freemiums, they see an immediate increase in response rates that seems to be followed by an increase in churn. In part, I think this is because you create more of a "buyer mentality" than a "donor mentality" with the recipient.
2. I think younger donors have different expectations of accountability and are not as premium tolerant. They're saying "Don't send me that stuff. I want to support organizations that put my support to work ... not that use it to buy stuff to send out."
Question: Do you have any samples of various outside envelopes with test messaging that you could share?
Rooney: Remember the only function of the carrier envelope is to deliver the letter to the recipient and to get them to open it.
Having said that, teasers are very tricky. And, there are two critical characteristics of teasers you must keep in mind. First, they are context specific and very few translate across different packages.
However, there are a few. "Membership Renewal Information" is the most powerful teaser in direct mail. Donors respond very strongly to offers about renewing their annual membership. So, variations on this teaser are very effective. Of course, they can only be used in a renewal mailing, but every organization should have one. If your group does not, start one today.
A second teaser that can translate is a deadline which is date specific, i.e., "Please Respond by June 20, 2011."
Second, a "teaser" is not just words. It is everything about the carrier envelope. It can be postage. First class postage is incredibly powerful way of getting an envelope opened. If the budget does not allow for 1st class, then use a meter or indicia.
However, please stay away from the 3rd class non-profit stamps. Nothing screams 'junk mail" like a 3rd class pre-sort stamp. Teasers can also be graphics and artwork that makes the envelope look urgent, like an overnight gram.
Question: I noticed that many of your samples are addressed to a "friend." Do you find much benefit in using first names vs. general associations?
Merrigan: Preprinted letters are more affordable than personalized letters. (They also offer fewer data challenges; e.g., making sure you have the name right.) The challenge is to find a salutation that makes sense, and is still appropriate to the relationship. "Dear fellow veteran" ... "Dear neighbor" ... "Dear concerned citizen" ...
How do you set the stage for what is to follow?
This is a great area for testing, because it's a critically important question. Too often organizations use one salutation this time and another next, kind of "as the spirit moves them." But, how do you establish any learning from that? Do an A/B split and try two, to see if one works better than the other. Or, do an A/B split and see if personalization delivers a significant enough increase in response to pay for itself.
You have to start somewhere, and the reason you see so many "Dear Friend" letters is that it works. It provides an acceptable level of response. Now, your job is to find what's better than acceptable!
Ethan Boldt is the chief content officer of DirectMarketingIQ, the research division of the Target Marketing Group and publisher of special reports, how-to guides and books for the direct marketing industry.