Tuesday, February 20, 2007

direct mail intro

Throughout my career, I've done a lot of fundraising through direct response vehicles, especially the mail. Direct response does exactly what it says - goes to the donor to get a direct response to a request for a donation. Most of my experience is with direct mail, although I'm also familiar with direct response newspaper advertising (used to great effect in Europe where newspapers have distinct reader demographics and a tradition of newspaper "asks"), and a little with the emerging field of internet giving.

The wonderful thing about direct response is that we can collect lots and lots of data about who responds to what, over what period of time, with how much, at what time of year, etc. The first time a direct mail package is used, we mail to a fairly small set of potential donors in order to see what the response rate will be. An excellent response is that 1 to 1 1/2% of those who get a mailing actually send in a donation. At City Harvest, we once did a new donor acquisition mailing and got a 2.5% response rate - almost unheard of and quite celebrated in the non-profit direct mail universe (and much copied).

If a package gets a successful response, then you "roll out" the package to a much bigger group of potential donors (usually comprised of lists of donors to other charities). That becomes a "control package." It will remain the control package until another donor acquisition package exceeds its average response rate.

Testing new packages goes on all the time, always with small groups of potential donors. Other tests also are done, with potential and with current donors - envelope size, real stamp versus machine stamp, celebrity signer versus CEO, enclosing pictures or not, the list goes on and on. Only one thing is tested at a time, though - it's the only way to isolate what works or not.

One example: We tested whether to include a business reply envelope (with the organization paying for return postage) or provide an envelope that required someone to put on their own stamp. We found there was a slightly higher response rate to the no-stamp envelope - not statistically significant but enough to let us know that we could stop using BREs which cost us a lot of money. (Charities pay the postage AND a handling fee - it really does matter when you add your own postage).