Cover Story: Prospecting for Smiles
In the fall of 2010, Smile Train implemented the program on half of its 98.9 million pieces of direct mail sent to prospects and saved 40 percent on list costs for fiscal year 2011. What's more, Ma says "a significant portion" of the 300,000 donors acquired during that timeframe resulted from using the prospect database.
"When other nonprofit direct marketers come up and ask me, 'Well, who should really be considering doing something like this?'" Ma adds, "I say, 'Well, if you're a nonprofit that's highly dependent on direct mail, like we are—70 percent of our fundraising revenue comes from direct mail—and you're also a high-volume mailer with increasing costs, this is a great opportunity to test a prospect database concept."
Being a high-volume mailer, because so much revenue depended on the channel, Smile Train was using a wide variety of lists and managing numerous campaigns each year. "As a result of mailing so much," says Ma, "we were netting less than 40 percent of names coming out of a traditional merge/purge environment."
Building a Database
"The organization was trying to think creatively about how it could more efficiently operate its acquisition program to lower costs, so it could reach a greater number of potential donors, but also the right potential donors," says Gretchen Littlefield, president of Infogroup Nonprofit, the marketing agency within data provider Infogroup that serves nonprofits.
"So it was those two factors that were coming in: How do you reach the right ones, but how do you do it also in a really cost-effective way so that they're able to save money and put it into other things?" says Littlefield. "It is a very different way of thinking than I have seen other charities focus on their acquisition efforts, because it's very much something that you see commercial mailers do."