Monday, June 27, 2011

How many times to mail?


Last week the UK Fundraising Group on LinkedIn began a thread about how often to mail people.

So how often should you mail?

At Pareto we look at data and try to work out what the optimum communications program should be to maximize lifetime value from donors. Donors are very expensive to get on board, and it is imperative that you look at your data to maximize return on that initial investment.

The most important factor for whether someone will give to you is whether they gave to you previously. Then, the most important variables are how recently and how many times. The more recent someone gave, the more likely they are to give again.So, mailing, emailing or phoning more often means that you are constantly communicating with donors more recently, and therefore more likely to get gifts from them.

Also, the biggest cause of attrition is not giving for a while (!). Fewer communications mean that the gap between giving is greater. If you don't communicate very often your attrition goes up, not down. Unless your communications are not very good.When it comes to asking donors for a monthly gift we also note that there is an optimum time. It does vary slightly, depending on cause, channel of solicitation etc but it is always going to be within a couple of months of a gift.

Four to six weeks is the right place to start. We are not alone with this approach, anyone else who measures life time value and optimum 'conversion' timings finds the same answer.

And this does not appear to vary between countries. We took that learning from data in the UK and applied it in Australia to find the same. Analyzing data across other countries gives us the same result.This approach is not aggressive, and is not subjective or an opinion. It is maths. Across any given data set, increasing communications tends to increase the lifetime value of that data set. Not just short term income, but overall giving.

Managed well it should also increase your number of bequestors.Jeff Brooks of the best fundraising blog, Future Fundraising Now advocates at least thirty asks per annum. That seems a lot, but he says that he has never seen increasing the number of asks decrease the total value given.The limit on the number of communications is likely to be forced on you for internal reasons - your capacity to produce multiple communications.

Also, increasing the number of asks is likely to increase total given, and increase retention but each time it also increases costs and reduces the amount given on that occasion. Consequently an initial increase in ROI as you go from say four to eight communications will reverse and you will probably begin to see a decline as you go from say eight to sixteen.

Even so, net income is the best measure - not ROI - from warm mailings to your own donors. It is better to raise $700k at a cost of $300k than $500k at a cost of $100k. More donors, more security, more room for error, more legacy potentials etc = more money in the end.

5 comments:

Carrie Sheppard said...

What about now, given the changing economic circumstances?

'Sean is always learning' said...

I imagine the rule still applies. Either people can give, or not. Would love to see if there is any data anywhere that contradicts this. I mean transactional data - not opinion.

Jill Ruchel said...

I agree with Sean. I have heard organisations that get 2 or 3 million dollars for a mailing say that the reason they can't mail more than 4 times a year is that they don't have the resources. Surely if you're going to make a minimum of an extra million or two from two additional mailings you can afford to add resources. It's limited thinking not to give your donors more opportunities to support you.

cnukus said...

I doubt if it's making economic sense and long-term beneficial to burn the additional $2 million to raise $2 million?

It creates job opportunity, but it's not green, not bringing positive cashflow. You are expanding the donor base yes, but the quality of the additional costly donors are uncertain.

cnukus said...

The 2 million donated could have gone to other charities, that would be more efficient (as they aren't spending $2 million to recruite), and those charities likely cover areas yours don't cover.

How about spend your own $2 million somewhere with more impact?

And the cost for campaign will be a little lower as well, because less campaigns demanding resources in market.

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