The Check’s In The Mail
November 3, 2015 The NonProfit Times
Don’t tell fundraisers direct mail is dead: Member-focused mailings at both WOSU, a Columbus, Ohio public radio station, and The Philadelphia Zoo are being aggressively reconfigured with the goal of boosting donor bases, retention efforts and revenue streams.
For WOSU, focusing on direct mail-based member acquisition as opposed to on-air solicitations was a no-brainer. “Direct mail donors are more highly valued,” Debbie Merlino, president of DMW Fundraising, which coordinated WOSU’s efforts, told an audience during the recent conference of the Direct Marketing Association’s Nonprofit Federation. Those donors tend to have better retention rates, greater first-year retention rates and higher long-term value, she added.
In contrast, donors acquired as a result of on-air pitches tend to be more transaction-focused. They’ll spend a bit more to get, say, the Downton Abbey DVD set, but after they’ve acquired a premium for their initial membership it is harder to retain them with altruism-focused pitches.
WOSU’s broadcast footprint is regional. As a result, the station has a finite number of potential members it can solicit. According to Merlino, the radio station weighed two strategies: Mailing a greater quantity of solicitations, which management thought would depress the response rate, or keeping the mail-out volume consistent and adjusting the offer with an eye toward bringing in more responses.
In an August 2014 test, the station evenly split a 30,000-piece acquisition mailing. Half of the targets received a control package with the station’s standard offer of an $85 membership for $60. The other half was sent an open ask. Prospects were permitted to give whatever they believed membership was worth, with a minimum donation of $5. Other than that, the memberships were identical.
As one might expect, the average gift among the open ask crowd was substantially less than that among those sent the full-price offer — $28 compared with $55. But the volume of respondents jumped by 122 percent and the average cost to acquire a new member was cut in half.
Even better, when the open ask donors were solicited to renew at the $60 rate, they did so with only a slight drop-off from the renewal rates among those who received the control package, according to pre-expire renewal rates.
WOSU is continuing to experiment with its solicitations. Next month, the plan is to flip the traditional process of creating sustaining members — those who sign up for automatic regular donations. New members will be asked to sign up as sustainers in its initial solicitation. Merlino hopes the tactic will increase sustainer member presence above the 20 percent level most public media donor files contain.
It is risky because that test will seek a greater up-front commitment from people who don’t have a pre-established relationship with the radio station. Sustainer members are traditionally cultivated from the pre-existing donor base.) The rewards could be quite handsome, both in terms of greater annual donation amounts and a reduction in renewal expenses.
The Philadelphia Zoo is tweaking an aspect of its mailings — list selection. Until 2012, the yearly request for gifts to its annual fund targeted around 30,000 people within its files. There was, Merlino noted, no attempt to apply segmentation to the file.
The general membership file was reviewed and those donors who had previously given a gift to the annual fund were isolated. While the overall response rate for the entire file was less than one half of 1 percent, with an average gift of $26, the response rate jumped to more than 5 percent with an annual gift of $110 among those who had previously given to the annual fund.
In subsequent mailings it was clear that there was a big difference between people becoming members because they wanted a comparatively inexpensive trip to the zoo and those seeking to contribute to the zoo’s mission. Fundraisers began mining the zoo’s contact files for other individuals who demonstrated a greater commitment to the zoo, such as those who had given to its animal adoption program or a restricted capital campaign.
The Philadelphia Zoo is testing another hypothesis this fall: Are people who signed up for a membership but who didn’t visit often looking for a way to make a donation? Are their memberships a proxy for philanthropic gifts? These donors will be solicited with tailored requests to contribute to the annual fund.
When recommending radical changes to mail solicitations, Merlino suggested that strategists brace their clients with worst-case scenarios and ask the clients whether they are willing to realize those results. She also suggested conducting more radical tests earlier in an organization’s fiscal year. Should the test completely flop, the organization will still have time to make up any shortfall.
Richard Levey is a New York City-based freelance business and marketing writer who frequently contributes to The NonProfit Times