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1 CompanionBooklet 10/10/06 12:45 PM Page 1 COMPANION BOOKLET THE POWER OF DIRECT MAIL Developing your direct mail program... For more information, contact: 2819 Saint Paul Street Baltimore, MD USA T x10 F SPONSORED BY: SPONSORED BY: PROVIDED BY:

2 CompanionBooklet 10/10/06 12:45 PM Page 2 CONTENTS INTRODUCTION APPEAL TYPES AND RESPONSE OUTCOMES WHAT KIND OF A RESPONSE CAN YOU EXPECT? OTHER FACTORS THAT DRIVE RESPONSE YOUR TEAM - WHO WILL MAKE IT HAPPEN? Mail Manager To make sure the elements in your packages are personalized correctly and folded, stuffed and sealed, and mailed with the proper postage. You can save a lot of money by presorting your mail, and a lot of time by outsourcing to a mailing house or lettershop (some printers offer these services). Smaller nonprofits often use volunteers. A Workable Production Schedule Give yourself plenty of lead time by working backwards from your mail date. Here s a general guideline to follow: Stuffing and Mailing: One week Printing: Two weeks Final Package Review: One week (longer if you need board approval) Design Review and Revisions: One week Design: One to two weeks Copy Review and Revisions: One week Copywriting: Two weeks Concept Review and Revisions: One week Creative Concepts: One week Unexpected surprises: One week This adds up to about 12 weeks. Work this into your mail calendar for each package as soon as possible THE POWER OF DIRECT MAIL Now you re ready to harness the power of Direct Mail!

3 CompanionBooklet 10/10/06 12:45 PM Page 3 YOUR TEAM WHO WILL MAKE IT HAPPEN? Direct Mail Program Manager To oversee all aspects of your direct mail program, including the budget and mail schedule, and make sure the packages come together smoothly and get out the door on time. List Manager To source, clean (merge/purge) and update your mailing lists, and send acknowledgements as gifts arrive. If you re renting a list, this person will also coordinate with your outsourced list broker or manager. Creative Team To develop the creative concept, then write and design your packages. If you don t have experienced copywriters or designers on staff, outsourcing these responsibilities is a good idea. Printer To print the components that will go in your package. Prices can vary dramatically (and so can service), so get several competitive bids and references. Print brokers can do this legwork for you, and their fees are typically transparent. Chances are, you re already doing direct mail fundraising in one way or another. Your newsletters, event invitations, seasonal mailings, letters to friends asking for support all these are forms of direct mail. Applying what works You don t need a marketing degree to make direct mail fundraising work for you. You just need to know what works. Successful direct mail strategies and techniques are based on empirical fact, because just about everything can be tested and tracked. So all you need to do is apply these proven methods to your own organization. Then repeat the ones that work best for you. The Program and the CD This booklet walks you through the basics of putting together a successful Direct Mail Program. Use the animated tool on the disc enclosed to help you create your powerful and effective Direct Mail Packages. 13 THE POWER OF DIRECT MAIL 2

4 CompanionBooklet 10/10/06 12:45 PM Page 4 The Direct Mail Mindset It s simple: the more donors you have, the more funds you can raise... and the more good you can do. Direct mail helps you locate people who might be interested in supporting your mission. It keeps your donors up to date, motivates them about your mission and asks them for increasingly greater levels of involvement. And most importantly, it helps you identify potential major donors. Direct mail also helps you build your brand and educate the public. Which makes the first step finding people who will support your mission all that much easier. Step-by-Step Planning Before diving into your packages, take a look at your overall program. Do you have well-defined goals? Budgeting Direct mail is an investment. Be sure to determine the cost of printing, postage, work hours, outsourced services and other expenses before making any decisions. Nearly every step has room for budgeting options or economies of scale. (Note: self-mailing packages are cheaper to produce but generate fewer responses.) Acquisition mailings appear to be the most expensive because they get the lowest returns. For these donorbuilding mailings, you re shooting to break even. The saying goes: If you re making a net profit, you re not mailing enough. Donor appeals are a different story. These bring in your funds. Think of it as the difference between fishing in a lake and fishing in a barrel. But you need to keep restocking that barrel! Do you have what you need in place to reach those goals? What should you fine-tune before moving forward? 3 THE POWER OF DIRECT MAIL 12

5 CompanionBooklet 10/10/06 12:45 PM Page 5 Testing Maybe you ll get a better response if you include additional elements in your mailing, such as a brochure that highlights benefits or a lift letter from a different signer that offers a complementary point of view. Or you could try a different offer. See what works best for you by splitting your mailings in two and testing for one variable. Then test something different the next time around. (See the animated tool for detailed information on package elements.) Database Management Your direct mail program can only reach its potential with a good system for continually updating and tracking donor information. If you re already using a fundraising software program great! If not, there are many good options available, starting for as little as $500. Some companies offer on-line solutions, and manage your database for you. It s very important to show your donors you re professional and care about them by making sure names, addresses, salutations, gift amounts and dates are 100% correct. APPEAL TYPES AND RESPONSE OUTCOMES Who are you mailing to and why? Understanding different appeal types and audiences is the first step in developing a successful direct mail fundraising program. Acquisition Appeal (Cold Prospects) Mailed to strangers to recruit new donors. The goal is to engage them in your story and explain how they personally will benefit by supporting your mission. Be sure to explain how your programs are different from those of similar organizations and make it very easy to respond. Renewal Appeal (Annual Giving, Donor or Membership Program) Mailed to current donors to maintain their support. You want to generate excitement about your recent successes (and challenges) and your upcoming goals. Start mailing monthly renewals two months before donors anniversaries, and send up to six different reminders in all. Upgrade Packages ask donors to renew at higher levels. 11 THE POWER OF DIRECT MAIL 4

6 CompanionBooklet 10/10/06 12:45 PM Page 6 Lapsed Donor Appeal Mailed to donors who have not given for 12 months to ask them to come back. Remind them about the important work you re doing, how much you appreciate their past support, and all the personal benefits of supporting your organization. Consider offering a gift or discount. Year-End Appeal Mailed to donors, members and strangers to ask for an extra gift during prime giving season. Try to avoid sending renewals during the holidays. The Year-End appeals really should be extra. Special Appeals Mailed to ask donors and possibly strangers to become part of an elite group or a contributor to a specific goal or program. Send an Emergency Appeal when you re faced with a genuine crisis. OTHER FACTORS THAT DRIVE RESPONSE Creativity How your package looks and especially what you say has a major impact on your success (see the window-flap enclosures for details). Research shows that copy accounts for as much as 40% of direct mail fundraising success, and design for 20%. Timing Create a mail schedule that includes all your appeals, invitations and newsletters. If you bombard donors or, conversely, ignore them for long stretches, your results will suffer. Note: Acknowledgements are mailed yearround, as you receive your gifts. Frequency Often you have to ask several times before getting a response. New donors like familiarity, and current or lapsed donors may intend to support you again but have put it off. The key is to keep mailing! 5 10 THE POWER OF DIRECT MAIL Timing Tips especially for New-Donors Avoid July, August and the three weeks before Christmas. Shoot for January through March, and September through November.

7 CompanionBooklet 10/10/06 12:45 PM Page 7 Exchanged Lists If you want to reach out to new donors, consider trading your in-house list, or segments of it (such as lapsed donors), with organizations that have similar or likeminded constituents. Rented Lists You can rent names of likely donors from list brokers or list managers. They can tell you which lists are available from which organizations, how they can be segmented (zip code, income level, gender, etc.) and how much they cost to rent. Usually nonprofit direct mail donor lists cost between $75 and $125 per thousand names, and are available in multiples of 5,000. Segmenting Your Lists The more you segment (create subsets from) a list, the more you can target your appeals and offers. Often it makes sense to have two or more versions of the same letter, each targeting a different segment. Use a unique key code to track your results. (See the animated tool for details on offers and key codes.) Invitations Mailed to invite donors, friends, neighbors and other potential supporters to your fundraising event. Make it easy for them to donate right then and there, even if they can t attend. Welcome Packages or Acknowledgements Mailed to immediately thank new donors by officially welcoming them to the family (and providing additional information), or to thank established donors and remind them about all the good work they make possible. Newsletters Mailed to bring your constituents up to date. Always include a sidebar on how to donate, and tip in a reply envelope so they can send you an extra gift, if they re inspired. 9 THE POWER OF DIRECT MAIL 6

8 CompanionBooklet 10/10/06 12:45 PM Page 8 WHAT KIND OF A RESPONSE CAN YOU EXPECT? You re going to get a better response from people who are familiar with your organization, and a much better response from those who are currently supporting you. Current and Lapsed Donors The average response rate for a first-year renewal mailing is 30-40%. That rate increases by about 10% each year for the next two years, by 5% for the next four after that, and incrementally thereafter up to a 93% renewal rate for 10-year donors. Some donors stay all their lives. On average, 10 20% of your donors will send you a larger gift, or upgrade, if asked. Many give several times a year, and also attend events or volunteer. The quality of your direct mail communication is critical to maintaining strong relationships. Lapsed donors respond at a rate of about 4-12%. Gift Amounts The average gift amount depends primarily on how much you ask for. Usually you ll get a higher response from a lower ask. And you ll get fewer, but more meaningful, gifts from a higher ask. Keep in mind: the larger the initial gift, the better your chances of getting a second one. Mailing Lists Who, exactly, you mail to is no small matter. The quality of your mailing list can represent 40% of your success. In-House Lists Your database of names is your in-house list. When meticulously updated, it s your most valuable resource. It will likely include (and hopefully segment) your donors, volunteers, board members and people who have attended events or otherwise expressed interest in your organization. New Donors The average response rate for an acquisition mailing is %. When you think about the potential value of each new donor and how adding several hundred or thousand new donors each time you mail it s clear how those percentages tally up over time. 7 THE POWER OF DIRECT MAIL 8

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