Are Premium Acquired Direct Mail Donors Just As Likely To Become Regular Givers As Non-Premium Donors?

In my last blog, and in a recent article I wrote for 101fundraising, I mentioned that premium acquired direct mail donors have 'converted' to regular giving at about the same rate as non-premium acquired donors.

But in Australia charities are seeing lower conversion rates over time.  The rates are still brilliant - with return on investments (ROI) varying from 0.7 to over 1.0 in twelve months, but the decline is real.  At the same time these charities have invested more in premiums. So why the decline if it isn't premiums?

Two shifts in data that tell us why it could be...

1) Investing more in swaps and co-ops.

Swaps and co-ops get much better response rates and much better ROIs than other sources of data such as cold lists, subscriber lists and geo-demographic profile lists.  So they are good.

But the people who donate have definitely donated to charity before (which is why the lists work so well) and probably already been called by a charity and asked to be a regular giver. And they have already said no.  We know this because charities tend to not swap their cash and RG donors.

The obvious solution is to swap cash and RG donors, though I urge that you test this carefully and would be concerned that the volume is not sufficient to make this a viable tactic for most charities.

2) Donors are getting older (because of better targeting by charities).

There is a sweet spot for regular giving, and these three charts tell a great story.

The chart above includes face to face, but shows that basically, older people don't like regular giving as much.

When donors make their first cash gift they are around 63.

But older donors are better, and more likely to give again, so we see the average age on all gifts (ie most recent gift) they are much older.

As always, older donors are better.  But not as good as regular givers. But since regular giving only adds a bit onto the value of these donors (and should continue to do so) we like older ones anyway.

Finally, direct mail acquired donors have enormous potential value.

Us Europeans are obsessed with regular giving; we just need to come to terms with the fact that from direct mail cash acquisition is NOT step one of a two step regular giving program.

It is a multiple channel and multiple outcome activity where more value will come from further cash donations, major gifts, bequests and a little extra from regular giving.  Regular giving is the icing on the cake.

So it isn't directly premiums that are causing the lower conversion rates but many other factors, of which use of premiums is probably a minor contributor.

Soi Dog Foundation Facebook page reaches one million likes

Who cares? Lots of likes don't help a charity do good. But Soi Dog's do. 

It's not the most likes a charity has on Facebook, but this little Thai charity has the right likes.

This year Soi Dog will raise $6m, has over 13,500 regular givers (sustainers) and tens of thousands of donors from all around the globe.

And most of this success has come through Facebook marketing.

https://www.facebook.com/SoiDogPageInEnglish

Well done Soi Dog team. 

PS - if you are interested in the three secrets of fundraising on Facebook sign up for my latest webinar. I have two slots in different time zones. So, join people from around the world on either 7th or 10th Sept 2015.

You can book your place here for the 7th Sept - https://seantriner.leadpages.co/3-secrets-lead-7th-sept-2015/

Or here for the 10th Sept - https://seantriner.leadpages.co/3-secrets-lead-10th-sept-2015/

Ten reasons premium direct mail doesn't suck

Lots of questions about premium direct mail still abound. Premium direct mail is not for everyone.

But it should not be rejected because of a theory that we get worse donors non non premium. It is just a technique - and, with the right proposition, budget, skills and follow up - a technique which can help you achieve your mission by giving you more cash.

Ten reasons why premium based direct mail fundraising is as valid as any other fundraising mechanism.

1. It usually works better than non-premium direct mail in short term. The table below is based on real data.

	Non-premium	Premium
Acquisition mailing volume	100,000	100,000
Response rate	2.20%	7.50%
Prospects	2,200	7,500
Average first donation	$36	$31
Second gift rate	44%	30%
Average second donation	$60	$50
Total given	$137,280	$345,000
Income Yr 1	$1.37	$3.45
Cost (acq+warm)	$159,900	$263,750
1 yr ROI	0.86	1.31
Multi donors @1yr	968	2,250

2. It works better than non-premium direct mail in longer term - in the table above we have 2,250 premium acquired donors who have given twice and they are a lot more valuable than the 968 non-premium acquired donors who gave twice.

3. There are more potential bequestors (legacies) and major donors in a premium acquired file than a non-premium direct mail file.

4. Premium acquired donors don't only respond to premium mailings.  They are more likely to respond to premiums but because they were cheaper to get, and there are more of them, you can follow premium donors up with non-premium mailings and still get good results.

5. Donors who only give to premiums give to premiums.  But donors who give to non-premiums do give to premiums too! So premiums actually bring you in a new audience without losing the old one.

6. Direct mail is the largest volume source of bequests (legacies), and premium direct mail gets more donors. Direct mail donors are older; mean age is around 70, and in Australia modal age is 83. Great bequest prospects are in your premium donor file.

7. After the same filters have been applied (size of gift, contactable by phone use of credit card etc) premium acquired donors have been just as likely to become regular givers (sustainers) as non-premium acquired donors when telephoned. And there are usually more of them.

8. Premium direct mail is usually more expensive in costs - but usually a lower cost per donor. In other words, you may have to pay more upfront (or mail fewer) but you will likely get your donors cheaper.

9. Premiums are not at odds with donor-centricity or the brand of a cause.  Premium mailings should be story focused, donor centric just like any other mailing.  Putting a premium in the pack gets the letter opened; the cause still needs to work hard to get the donation. 

But most importantly...

10. Indigenous Community Volunteers, the Lost Dogs' Home, RSPCA, Cerebral Palsy Alliance, St John's NZ, Vision Australia, Seeing Eye Dogs, Guide Dogs, House with No Steps, Save the Children, Peter MacCallum Cancer Foundation, Diabetes Victoria, Cancer Council QLD, Bush Heritage, Children’s Cancer Institute, WWF Australia, Starship Hospital, Children's Hospital at Westmead....

…any many more all helped more people, more animals and more habitat because they have premium direct mail as part of their portfolio.

Premium direct mail is not for everyone.  

But the decision to do premium direct mail or not should be about your resources, skills, other fundraising options, database, budget and ability to get great propositions. 

For more on premium direct mail visit http://101fundraising.org.

More video conferences to reduce emissions & wasted time

There is no doubt that video conferencing is a good thing, on balance.  Of course, in person is the best but can be very expensive and time consuming with all that travel.

Teleconferencing is OK, but video gives you some tells - you can kind of get people's mood better, body language is visible and it actually makes all of you more focused because you actually look at the person speaking instead of playing solitaire or checking your Facebook ad performance.

I just finished an internal video conference using GotoMeeting.  But Google Hangouts is good too.

We were in Wanaka, Byron Bay, Sunshine Coast and Sydney.

It really worked well, and despite the issues illustrated below, it still saved everyone time compared to a physical meeting.

Please watch this video - it is worth it (and very, very funny).

(If the embedded Java doesn't work for you, you can watch it on You Tube here).

We in the charity sector are always on the lookout for money saving ideas and whilst I don't recommend dropping meeting in person or investing loads into camera gear I do think investing in decent internet, a few $100 Logitech cameras and speakers is well worth while.



Sean

Premium direct mail - everyone hates it!

Premium direct mail - those direct mail packs with 'gifts' to donors and potential donors get a bad rap. 

Quite a few commentators think they are BAD.  

Looking at years of data in Australia and New Zealand we see that sometimes a non-premium mailing will beat a premium mailing, but overall and across many charities, large scale premium direct mail programs beat large scale non-premium direct mail in every mathematical measure - even in the long term.

In other words, premium direct mail raises more net income, through higher net life time value than non-premium direct mail.

And if anyone says 'that is not the point' look at them incredulously and ask what is the point of fundraising if it is not to maximise net income to a charitable cause in the long term?

Any argument about how it undermines the sector, or loses confidence is easily countered by the fact that more people gave last year than any year before. Or, if in your market that isn't the case, I bet the trend is upwards.

And what of increasing attrition? Well a rule of sales: the more customers you have, the lower value of the average customer, but usually the more good customers you have too. 

Yes, attrition rises. But that is partly because we are fishing deeper to keep up with the demand for our services. 

For more check out my crowd blog:
http://101fundraising.org/2015/07/i-%E2%9D%A4-premium-direct-mail/

Sean