|I believe donor acquisition is one of the most difficult areas of direct mail fundraising to conquer.
Pressure to acquire new donors through limited budgets can result in stormy boardroom meetings. The sight of a revenue losing program on the bottom line pushes many organizations into a tail spin.
However, if you want a thriving, revenue producing direct mail fundraising program with long-term growth, new donors must be acquired every year.
I’ve talked with a few nonprofits who year after year wonder why they are seeing a drop in revenue, only to find out they decreased the mail quantity for their acquisition mailings. Many tell me, “It costs too much and we lose money.”
Making the mistake in believing a donor acquisition program is a failure because it’s not making money is detrimental to a nonprofits future. Direct mail donor acquisition mailings WILL lose money. However, direct mail donor acquisition mailings will GAIN new donors who will contribute to the future success of your program.
Instead of measuring how much was lost, organizations should measure how much money was spent to acquire a new donor. The old saying “You have to spend money to make money” rings true here. Think of it as a matter of cost-effectiveness, not cost. The key to success in direct mail donor acquisition is to acquire as many quality donors in the most cost-effective manner.
But it doesn’t stop there. An effective “welcome” appeal is needed to get your brand new donors to give a second gift. It’s crucial in getting them to become long term donors.Acquiring the second gift combined with an effective annual renewal series will essentially result in growth and net revenue to your direct mail program. By calculating donor lifetime value you can determine how much you need to spend to acquire and retain new donors.
It needs to be understood that people stop giving for a variety of reasons; financial hardship, loss of interest in the organization’s mission, illness, and of course death. It’s a given that some donors will stop donating no matter how strong a renewal program. Donor attrition must be replaced and replaced at a higher volume if the direct mail program is to grow.
Make no mistake, cutting back on a direct mail acquisition program will result in a decline in revenue and it will keep decreasing year to year. Cutting back on acquisition will make your donor file smaller and weaker as the years progress.
If you’re serious about the overall health of your direct mail acquisition program don’t cut back. Here are 6 tips you can use to make your acquisition mailings stronger:
- Lists: The most important factor in an acquisition mailing are the lists. Mailing to poor performing lists will not grow the donor file. Testing lists to find our which result in the highest percent response at the lowest cost will help build your donor file. Consider utilizing zip code modeling, demographic profile overlays, and cooperative modeling to ensure maximum performance of your mailing.
- Copy: Compelling letter and package copy are integral to program success. It is important to convey what sets your organization apart from the masses. What will compel someone to give to your organization over another? Make your case as to why you need support and give an example of someone or something helped by your organization. Emotional storytelling and donor centric copy will go a long way in showing donors how they can make an impact. Don’t be afraid to ask for a donation a few times.
- Gift Ask: Without donor gift history it’s hard to determine what your gift ask should be. Test a few gift asks to determine which one brings you the most donors in the most cost effective way possible.
- Test: Consistent testing of your acquisition program will provide you with important information. Don’t be afraid to test different package formats, new letter copy, a unique premium, or new teaser copy on the outside envelope.
- Package: Consider printing some of your renewal components along with your acquisition package components. Gang printing at higher quantities can lower your printing costs, making your acquisition program more cost effective.
- Invest in a New Donor Welcome Package: Get it out in the mail within two weeks of the initial donation. Make it personal … and not just the salutation.The welcome letter should thank the donor for their gift and be about how the donor’s gift has made an impact. Consider adding a certificate of appreciation, a survey, or a newsletter to increase donor retention.
We’d like to help make your acquisition program stronger. Whether by writing a new appeal letter, designing a brand new test package, or developing an annual strategy for your program, we are her to help. Email me today and I’d be happy to consult with you via phone or in person. Find out how we can assist you with increasing response rates, lowering package costs, and acquiring new donors in the most cost-effective way possible.
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President, Write Choice Marketing