Now that you’ve driven some costs out of your mailings with postage tips from yesterday, let’s talk about driving costs out your acquisition efforts.
One of the big costs of acquisition mailings is the lists themselves. Chances are fairly good that if a list works for you, your list works for them. Thus, make sure you have list exchange agreements set up with these nonprofits, as you can both save each other money.
(Note: if you have a source of names that are not traditional direct mail donors, you may want to take them off of both the rental and the exchange markets. Most donors are loyal to doing good works and perhaps less so to your organization. However, if you had a source of donors that are loyal specifically to your organization like your most loyal volunteers, you may not want to exchange these with everyone and their brother.)
Speaking of unique sources of names, another way to save on costs are to try to “acquire” your own names. That is, you have some lists of people who are constituents of your organization who haven’t yet donated – volunteers, advocates, white paper downloaders, service recipients, etc. These names may not all make money on the first go-around, but you can usually acquire these at a higher response rate and/or average gift than someone off the street and there are no list costs.
While it will be an additional investment, I remember customizing your copy for that person’s status with your organization. Indicating that you know they are a volunteer and thanking them for their service will not only cut down on your complaints; it will also very likely increase your response rate. After all, you don’t want to do business with someone who doesn’t know who you are – why would your donors?
Even if you don’t have these names in your active acquisition efforts, be sure to keep them in your database of record. When you rent or exchange a list with another nonprofit, it goes through a process called match back. This is where they run your names against the incoming list – any matches are returned to the origin nonprofit and you don’t pay for them since you already had them on your file.
However, that ping from an outside list can indicate to you that the person that you hadn’t been mailing because they only downloaded one white paper three years ago is giving to other organizations and could be a quality acquisition candidate. Thus, you can put them into acquisition at no cost.
Another source of “free” names are your lapsed donors. You likely have a list of people whose RFM analysis (or hopefully modeling or RFM+ analysis) indicates that they shouldn’t be getting donor pieces anymore. That’s fine and natural. However, that doesn’t mean you should stop trying to re-acquire them. Now they are in a limbo between donor and, as the song goes, just somebody that you used to know.
Mailing them with the same piece that attracted their attention at first can be a good way of getting them back into the swing of donating. And it’s likely a good investment – reacquired lapsed donors tend to have better retention rates than newly acquired donors. Just don’t take them for granted – they’ve told you with their behavior that they aren’t head over heels for you. Once you’ve reacquired them, make sure they get your love so that they won’t lapse again.
When you do rent or exchange with outside lists, look at the many variables you can select: recency of donation, amount of donation, demographics, location, etc. This is a case where you don’t want to scrimp on costs. If a list is not performing for you as it had, you may want to spend more on it (counterintuitively) by asking for more recent donors, larger donors, only females (if your organization skews this way as most do), or adding a ZIP code select (asking for only donors in your top performing ZIP codes).
On the flip side, if a list is performing very well, you may be able to relax these variables, helping you get additional productive names and saving on costs.
Also, remember that just because you bought the name doesn’t mean you have to mail it. If your analysis/modeling of an outside list name indicates that they won’t pay for themselves, don’t throw good money after bad money. The list cost is sunk; you need not be.
It’s important you have a good relationship with your list broker. They should know your strategy and whether you are driving for quality or quantity of donor. Chances are if they are doing a good job for you, they will already be optimizing for many of these things, but it never hurts to ask.