July 2006
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In this Issue:
Spotlight on Success: Know thyself... and thy donor
Answerman: Should recent donors be mailed?
by Peter Schoewe
Donorspeak: Is Lifetime Donor Value still relevant?
by Dirk Rinker
Online: 10 steps to a great email
by Rachel Allison
Hands On: Create your own online benchmarks
by Karen Matheson
What's Working: Nothing phony about this one!
Copy Corner: Looking for ideas?
by Deborah Block and Paul Karps
Know thyself . . . and thy donor
WITH THE proliferation of conferences on direct response fundraising, new techniques are being shared far and wide. But to Diane Bernardini, Direct Mail Manager for Maryknoll Fathers and Brothers (Maryknoll NY), there’s an important caveat:
“Sometimes you go to seminars and somebody will find something. And it’s almost like it’s too gimmicky. You have to be careful with those gimmicks. Because what works for somebody else may not work for you. And I think it’s important to know what your organization is, what kind of donors you’re looking for, and stay right on target.”
Because, she adds, “with some gimmicks, you can end up getting donors, but they just won’t respond again.”
At Maryknoll, Bernardini is able to practice what she preaches. Because “leadership here at Maryknoll doesn’t want ‘buyers.’ It wants people who are into our mission. So we’ve stayed with things that are mission-driven and have to do with the core of what Maryknoll does.”
A Catholic organization, Maryknoll sends its foreign missioners throughout the world to, in the words of its Web site, “serve people and places most in need... among the oppressed, abandoned, and poorest of the poor.”
Sarah Paine, Maryknoll’s Account Manager at direct mail agency Amergent (Peabody MA), adds that while the goal is “to teach about God, obviously, it’s more to teach people how to do things for themselves. It’s going in and building and strengthening communities.”
A MISSION-BASED PROGRAM
Both Bernardini and Paine stress that Maryknoll’s direct mail program does indeed revolve around staying true to this purpose—which, according to Bernardini, is “not just about God and the priests. It really is how they help people out in missions. It’s not only the religious aspects. It’s about helping each other.”
Such an approach manifests itself, says Paine, by focusing less on scripture and more on human interest, person-to-person storytelling. “I think more people are giving to Maryknoll for what they do as opposed to being just a Catholic organization... so here’s my gift.”
EMPHASIS ON ACCOMPLISHMENTS
Maryknoll tries to shy away from the heavy-handed, emotionally gut-wrenching style of telling a story. “That isn’t doing it anymore,” concludes Bernardini. “People who now give are also interested in accomplishments. They want to know their dollars mean something and that we’re actually doing things with the money. People want to see results.”
Especially given the notoriety of the scandals within the Catholic Church, Paine notes that public perception is key. So establishing accountability is important for Maryknoll.
A TWO-TRACK ACQUISITION PROGRAM
The Maryknoll acquisition program has evolved into two different tracks with two different controls: one features a premium and the other doesn’t, though both are mission-driven.
Over many years, tested premiums included greeting cards and other items. The eventual winner proved to be a “spiritual enrollment card,” which the recipient then sends to somebody else—telling Maryknoll on the response device who the card is going to. (Maryknoll then places this new name into its acquisition universe.)
This package clearly pulled better. It also improved long-term retention compared to packages with premiums that didn’t revolve as much around the mission.
Even so, in 2003 Maryknoll started a separate non-premium track with the idea that removing the premium completely would increase the retention rate for new donors over time. After testing numerous non-premium packages, Bernardini has found a control. As expected, the response rate drops for the non-premium donors, but the average gift is higher. Plus, the “amount of money and number of gifts they bring in over time is bigger than the premium people.”
In last November’s mailing, for example, the two different control packages saw these numbers: The premium package got a 1.67% response, the non-premium 0.59%. The average gift for the premium side was $12.03 and for the non-premium control, $27.69.
ANALYZING OVER THE LONG TERM
After they enter the housefile, all donors go into the same mailing pool and receive the same appeals. Then, once they’ve gone through at least two years of the mail cycle, Paine analyzes how these two groups—and other subsets of donors—have performed.
“We look at how much it costs to acquire the person in the first place,” she says, “and how much is spent on subsequent mailings. And how much money is received back from them. So it helps determine long-term list plans.”
As she explains, you may get a great initial response from one particular list, but after three years you’re still at negative dollars. “So you might decide that even though you’re getting gangbuster results in the beginning, over time it’s maybe not worth taking as many from that list.” On the other hand, there might be a list which over time makes more money from fewer people.
Click here to see Maryknoll’s premium-based acquisition control package, the non-premium control, as well as one of the organization’s successful housefile mailings.
Should recent donors be mailed or suppressed?
By Peter Schoewe
A QUESTION I often hear when I’m planning a mailing is, “Shouldn’t we suppress the group of donors who just gave to our last campaign?”
On the face of it, it makes all the sense in the world to hold your most recent donors out of your next mailing. After all, these are the people who just did a wonderful thing. They reached out through the mail and offered you their support. And most likely they sent as much as they felt they could afford at the time.
As a fundraising professional, you’re probably subject to anecdotal information from friends and family reinforcing this belief. In fact, when you show your face at a party or cook-out or get-together and mention you work in direct mail fundraising, I bet you’ll hear at least once, “I hate it when I get another mailing right after I sent a gift.”
But before you suppress your most recent donors from a mailing, you should look at your results. Contrary to common sense, the most recent donors almost always respond at the highest rate. In fact, donors who gave their last gift in the past three months can respond at double or triple the rate of donors who haven’t given in over six months.
If you think about it, this makes sense. Donors who have just given to your cause are showing they believe in your work—and they want to help. If you write to them again with an urgent and compelling need, the same stew of emotions and beliefs that caused them to open their checkbooks a few weeks ago has a great chance of inspiring them to respond again.
And this isn’t only true of those donors who support your cause with gifts of $10 or $15. A quick way to knock a large portion of the net revenue out of your direct mail program is to mail your high-value donors less frequently than your low-value donors.
Here are some actual results that illustrate this point. Last September, Mercy Home for Boys and Girls (Chicago IL) mailed a Thanksgiving appeal. First, let’s look at the response pattern for $10 donors. For these low-value donors, the response rate was 16% if the donor had given her last gift in the previous three months. But if the donor’s last gift was from six to 12 months ago, the response rate declined to 5%.
The same pattern holds for donors whose highest previous gift was $100 or above. If their last gift was in the previous three months, the response rate reached 13%. But if the last gift was six to 12 months ago, the response rate was 3%.
Of course, this doesn’t mean you should mail every donor each mailing you have in your schedule. First and foremost, if a donor requests to receive less mail—or no mail—you should immediately honor that request and let the donor know it. Oftentimes, you can build a lifetime of commitment to your cause by telling a donor you’ve heard her concerns.
As your direct mail fundraising program grows, you may want to start a separate mailing stream for higher-value donors—with personalized mailings that make the case for significant gifts. But again, be wary of any high-value donor strategy that promises less mail and the same amount of revenue. Before you reduce mail frequency, you should be sure (through thorough testing) that you’re protecting the critical net revenue you need to keep your organization strong.
And when you hear at a party, “I hate getting another appeal right after I sent a gift,” you have two choices. You can look at your shoes—or talk about the weather.
Peter Schoewe is Senior Consultant
Mal Warwick Associates
2550 Ninth Street Suite 103
Berkeley CA 94710-2516
phone (510) 843-8888
fax (510) 843-0142
e-mail peter@malwarwick.com
Is Lifetime Donor Value still relevant?
By Dirk Rinker
MOST NONPROFITS that pursue fundraising through mass media rely on basic analysis to measure the effectiveness of acquisition programs. Straightforward ROI computations (e.g. cost per dollar raised, cost per new donor, etc.) might be compared to a Corolla—not flashy, but reliable. Such measures as Lifetime Donor Value (LTDV) analysis are like a Prius hybrid—taking you farther, but with a higher initial investment.
Quite simply, LTDV compares lifetime income with long-term costs, before you know what the lifetime income will actually be. Where ROI can only provide an immediate assessment of whether an acquisition or renewal effort makes money, LTDV offers a more complete picture of the donor’s potential lifetime value. It accounts for such impacts as the cost to acquire a donor, the cost to maintain the relationship, and even inflation—forecasting two-, five-, and even 10-year lifetime values.
With the intense struggle for donor dollars, the need to identify the best acquisition sources is even more vital to success. But we’ve seen or heard little about LTDV in recent years. Do nonprofits still use LTDVs or have they been replaced?
IS LTDV STILL IN USE?
Many nonprofit and fundraising agency executives still support LTDV, though several of those interviewed admit they haven’t done one in quite a while.
One agency executive said that an LTDV analysis performed on acquisition lists yielded results very similar to a more traditional cost-per-dollar-raised analysis. So his firm uses the traditional approach these days. My company has seen similar results that suggest LTDV’s greatest strength is in discriminating between acquisition sources, rather than acquisition lists.
Other organizations, such as World Vision (Federal Way WA) and Childreach (also called Plan International, Warwick RI), say they now use provisional values or models similar to LTDV, but shy away from projections longer than five years. Still others use calculations from past LTDV efforts to approximate current results, saving time and analysis costs.
DRAWBACKS OF LTDV
However, charities must be cautious when adapting past LTDV curves to current acquisition efforts, since not all sources perform the same over time and most algorithms don’t factor in the present value of a dollar. Also, LTDV curves should be frequently adjusted with recent data to help increase accuracy.
Perhaps the most telling sign of LTDV’s current impact is that few of the executives we talked to could name any firms that offer LTDV analysis. Most of them said they were sure the major direct marketing firms offered it, but few could be specific.
Given that few nonprofits use LTDV analysis or even know where to get the analysis done, is LTDV still relevant? The answer is a resounding, “Yes, but...”
Donor loyalty experts Adrian Sargeant and Elaine Jay write in Building Donor Loyalty (published by JosseyBass) that lifetime value can help nonprofits know which media deliver higher-value donors, identify donors for relationship, calculate how much the organization may profitably spend, and determine the level of care extended to donors in different value classes.
WHAT USE IS THIS INFORMATION?
Of course, there’s a hitch: The organization must be willing to act on the results. If LTDV analysis reveals a long-favored acquisition source is unprofitable, will the organization be gutsy enough to minimize or terminate the source altogether?
If your nonprofit is looking for a way to determine the lifetime value of your donors, take heart. Firms like Campbell Rinker, Masterworks Associates, Merkle/Domain, and StrategicOne still offer this service. But if your staff is skilled in statistics and modeling, you may be able to conduct the analysis in-house using Blackbaud, SPSS, or SAS, all of which have some level of forecasting ability.
Dirk Rinker is President, Campbell Rinker
25600 Rye Canyon Rd.
#202, Valencia CA 91355
phone (888) 722-6723
fax (661) 775-5926
e-mail rinker@campbellrinker.com
10 steps to a great e-mail
By Rachel Allison
1) Get in the inbox.
When sending e-mail, use a consistent, informative “From” address that clearly identifies your organization. To ensure deliverability, it’s also good practice to ask your subscribers to add this “From” address to the list of addresses that bypass their spam filters. Such an ask is most appropriate within welcome messages, e-newsletters, automatic thank-you messages, and thank-you pages that appear after a user completes an action or donation.
2) Get them to open it.
The combination of your “From” address and your subject line is what will determine whether or not people read your e-mail. Make sure your subject line is short enough to show up (fewer than 50 characters) and punchy enough to get noticed.
3) Give them a sneak preview.
More and more people will be judging your e-mail on what appears in their e-mail provider’s preview pane. To maximize this space, include a short sentence of text at the top of your e-mail that explains what the e-mail is and a link.
4) Back up your beauty—with alt tags.
HTML-designed e-mails still outperform text hands down—but with more and more e-mail providers blocking the automatic download of images, you have to adjust your e-mail practice accordingly. How? Start by making sure all HTML images have “alt-tags.” Alt tags are the way you name your images within HTML code. These alt tags (image names) show up when you mouse over an image, and also show up in place of your image when your images are blocked.
5) Lead them on . . .
The issues we write about can often be dense and hard to explain, but don’t succumb to the urge to explain the entire issue in the first paragraph. Remember to optimize the space in the preview pane by piquing their interest first and then back up your argument with more detail later in the message. Begin e-mails with a quick, interesting lead.
6) Get them to click first and ask questions later.
Along the same lines as above, make sure you have a link to the action of your e-mail within the preview pane area (or as close to the top of the e-mail as possible). Again, don’t feel like you need to explain every detail about your call to action before you give the link—there’s time to do that in the later paragraphs of your e-mail.
7) Ask yourself: Is your e-mail all F-ed up? It should be!
Eye-tracking research shows that people don’t really read your e-mail—they scan it, and generally in an F-shaped pattern. You can capitalize on this trend in your own e-mails by scanning the top and left-hand sides of your e-mail. Does your use of logo, headers, bolded text, and images give a clear, compelling idea of your call to action without having to read the entire letter? It should.
8) Include a text-based link.
No matter what you do or how perfect your HTML is, a certain percentage of people will have trouble clicking through your links. Make it easy for your readers. Include a text-based link to the page you’re directing traffic to somewhere in the e-mail.
9) Give them your number before you go!
Unless security reasons prevent you from doing so, it’s best practice to always include your organization’s contact information (name, address, city, state, phone, URL, and an e-mail address) at the bottom of each e-mail.
10) If you love them, let them go.
The simple truth is that unless every one of your e-mails gives the reader a way to unsubscribe from your list, you’re veering into spam territory. Do this by including a link to the list member’s subscription management page or a page where they can unsubscribe.
Rachel Allison is a Senior Account Executive at Donordigital
182 Second Street, San Francisco CA 94105
phone (415) 278-9444
fax (415) 901-0112
e-mail rachel@donordigital.com
“You've just written a great letter—be it acquisition or an appeal. But have you written an equally great lead?
“The lead is critical. If it isn't a “grabber,” the prospect will stop reading and you will have lost a contribution. Of course, getting the envelope opened is the most important first step. But getting the prospect to actually read your appeal is critical.
“I suggest that the very best lead can be found elsewhere in your letter. This is not to discourage you from getting started, because we all know that you should just start typing.
“But just because you wrote it first doesn't mean it's the best lead. The same advice goes for the postscript, because the best P.S. is not necessarily what you thought up last.”
Thanks for this tip to Kay Partney Lautman
1730 Rhode Island N.W. 301
Washington, DC 20036-3119
phone (202) 296-9660
fax (202) 466-2312
email klautman@lautmandc.com
Send your own Tip or Timesaver by e-mail to mal@malwarwick.com.
If we publish your tip, we’ll send you a free copy of Mal Warwick’s Testing, Testing, 1, 2, 3: Raise More Money with Direct Mail Tests (Jossey-Bass, 2003), an indispensable tool for direct mail fundraising (one that explains what you can and can’t test!)
Create your own online benchmarks
By Karen Matheson
YOU HAVE a list of online subscribers, and you’re sending them e-mails—perhaps a mix of advocacy alerts, fundraising appeals, and updates on your work. Congratulations, you’ve got an online communications program!
The question is: How successful is it? How effective is your messaging? And how can you find out? What internal benchmarks are useful?
To begin, develop a template (i.e., an Excel spreadsheet) that will help you collect and calculate the data you’ll use to evaluate your messaging approach. The easiest and most common pieces of data to track are message open rates, click-through rates, response rates, and page-completion rates. Each of these metrics will tell you something different about your message—and paying attention pays off!
Open rates generally indicate (1) how engaging a subject line is, (2) the quality of your list, and (3) the strength of the relationship between you and your subscribers. To calculate the open rate, divide the number of people who opened the message by the number of recipients.
Click-through rates are a good measure of the persuasiveness of the e-mail and the saliency of that particular topic. The click-through rate can be calculated in various ways, but it’s most useful to calculate as the number of people who clicked at least once on any link in the e-mail divided by the total number of people who received the message. If your message contains two or more links, you may want to calculate the click-through rate for each link separately. Make sure you’re aware of exactly which clicks you’d like to track!
Page-completion rates give an idea of how well you’ve designed your advocacy or fundraising forms. Calculate the completion rate by dividing the number of people who clicked at least once on a link that sends subscribers to a form by the number of people who completed the form.
Response rates give you the overall success rate of an e-mail message. To calculate this metric, divide the number of people who completed the form by the number of e-mail recipients.
Now that you’ve mastered messaging metrics, what’s next? Tracking the type of communication and the topic of the e-mail adds a new layer of reporting sophistication — and, admittedly, some complexity. There are ways, however, to make the process significantly easier for yourself, and you’ll find the extra effort is worth it. Tracking message types and topics allows you to determine what has the greatest resonance with your subscribers, and you can adapt your messaging accordingly.
First, develop a laundry list of message types that are sent to your list. Depending on the scope of your program, you might consider forming a committee of your colleagues to identify the categories. Examples of e-mail types include: Action Alert/E-mail Advocacy, Offline Advocacy, Newsletter, Fundraising, Survey, and Welcome.
Now you know what you’re sending, but who’s receiving your message? Segmenting your subscriber list can push your online program to the next level, making your messages more successful. Send messages that are as highly targeted and localized as possible. Depending upon how you’ve built and used your list, you may want to segment by geography, activity history, issue area interests, and source. The more closely your segmentation aligns with your list members’ preferences and the way you utilize your list, the more successful it will be.
After understanding the basics of how your larger database segments perform, try segmenting messages based on transactional data. For example, you may want to send alerts more frequently to your core activists, or appeal to your multiple-gift donors differently from supporters who haven’t yet donated.
Karen Matheson is a data analyst at
M+R Strategic Services
phone (206) 447-9089
fax (206) 447-9092
web www.mrss.com
e-mail kmatheson@mrss.com
Nothing phony about this one!
IT HAPPENS to all of us. Every now and then, you tear open that envelope to find something truly surprising inside. And while you were hardly expecting it, you’re delighted just the same.
A case in point is this donor “thank-you” package mailed by Stanford University (Stanford CA). The closed-face Monarch envelope is fairly unassuming—with its logo of The Stanford Fund, live first-class stamp, and standard “THANK YOU!” teaser.
But inside, well, that’s another matter entirely.
The contents consist solely of a two-page personalized letter handwritten on two sheets of high-quality Classic weave stock.
Not a computer-generated “handwritten” font, mind you. But really written by a living, breathing person—using what looks to be your basic BIC black medium point Round Stic pen. (We’re guessing the original draft was then printed offset for mass distribution. But then again, that doesn’t explain the personal salutation, which has been blurred to protect the donors’ privacy.) The “mistake” at the bottom of page one is also a nice touch, isn’t it?
What’s more, the letter is penned by a real, live Stanford student: Dana Peralta, “Class of 2007, Human Biology.” (Cynics that we are, we even looked her up... and there she was. Just as she says.)
Dana’s heartfelt letter says “thank you” in the truest, most meaningful way. Because she explains how the donor’s gift has personally affected her life at Stanford. As you can read for yourself, she describes how The Stanford Fund’s “financial support was a big factor for my family.” And she goes on to talk about her involvement with a student group whose activities are supported by The Stanford Fund.
More than any fancy brochure or official letter possibly could, this has the look and feel of one real person saying “thanks” to another. No attempt to resolicit. No reply envelope. Just plain old relationship building of the highest order.
It’s all great stuff!
Click here to see the entire package.
Looking for ideas?
By Deborah Block and Paul Karps
WHENEVER WE GET ready to write a direct mail fundraising package, we gather and review all the background provided by the client. What’s more, we make a point of doing our own research on the topic or issue at hand to supplement the information we’re given.
But we’ve found it also pays to be proactive—to keep a constant eye out for material that may, at a later date, prove valuable. After all, you never know when some nugget of information you read in a newspaper a few weeks back could be the hook you need for your current job.
As we see it, it’s all part of the creative process of developing a fundraising package. In effect, you want to build a reservoir of ideas that you can tap into at a moment’s notice... giving you inspiration, a clever technique, a story, or just a certain angle that you can then incorporate with the other background information you’ve already gathered for a specific project.
So where do these ideas come from? Let us count the ways:
PERSONAL EXPERIENCE
Clearly, if you’ve been writing fundraising packages for awhile, you’ve got a leg up on someone new to the profession. Your bag of tried-and-true strategies that you’ve used over the years can provide a steady stream of ideas.
However, if you’ve really been doing this sort of thing for a long time, individual packages tend to blur into one other. So don’t rely on your memory for ideas. Instead, keep meticulous files of past jobs. In fact, you should try to get a live sample of every package you’ve ever written... and a system that affords you easy access to these mailings.
SOMEONE ELSE'S EXPERIENCE
That’s fine and dandy, you may be thinking, but this is the first package I’ve ever had to write—and my experience is nada. No problem. Just use the experience of others as your source of inspiration.
Start collecting direct mail from fundraisers and commercial mailers alike. Make a few donations if you need to get on some key lists—whatever you have to do to get some mail you can sock away and later refer to.
In our own case, we keep everything (even though we’ve been writing copy for 20 years now). Because, once again, you never know when you’ll find some bright idea you can play off in your next package. Remember: They don’t call it a “swipe file” for nothing!
READ AND CLIP (OR PRINT)
With so much information now available, it’s easy to read something one day and forget about it the next. So what we do is save the potentially helpful stuff, print it up, and physically stick it in a file. Then, it’s sitting there... available whenever we need it.
If we find an article that includes a quotation, statistic, or poll result we find interesting, we’ll save it. Or an op-ed piece or news item on an issue related to one of our clients.
Needless to say, try to read as much as you can. Your local newspaper(s). National papers like The New York Times. Web site portals that can bring you newspapers, magazines, and other sources from around the world. And subscribe to as many of the myriad e-mail listservs and e-newsletters you can stand. Because they can then send you to sources you might otherwise miss.
Managing Editor Deborah Block and Paul Karps are partners in BK Kreative
1010 Varsity Court
Mountain View CA 94040
phone (650) 962-9562
fax (650) 962-1499
e-mail bkkreative@aol.com
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