17/11/ Things You Should Know Before planning your next direct response campaign. 20 Quick Things. What is Direct Response?

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1 Association of Fundraising Professionals Greater Toronto Chapter Congress Things You Should Know Before planning your next direct response campaign 20 Quick Things 4 minutes per thing, so 1 or 2 questions per slide 10 minutes for discussion at the end This presentation is available online Rhafund.com What is Direct Response? A marketing or fundraising vehicle used by organizations to generate a measurable action from individuals or other organizations in direct response to that vehicle. 1

2 What is Direct Response Really? Direct Mail Telemarketing Television Communications Door to Door Peer to Peer Direct Mail Still Leads the Pack Primary driver of individual giving Primary source of revenue Primary fundraising vehicle Primary base for Organizational support Monthly giving Major gifts Planned gifts 7 Reasons Why You Should Know These 20 Things 1. Save time 2. Save money 3. Improve efficiency 4. Improve effectiveness 5. Maximize revenue 6. Build effective relationships 7. Practice good donor stewardship 2

3 1. All Roads Lead to a Planned Gift Treating every donor like they have the potential to make a planned gift will cultivate: Donor Respect Donor Commitment Donation Stewardship Donor-Centerd Fundraising 2. Data is King Begin with a clean and well organized data base Honorific First Name Last Name Address Postal Code Telephone Number Address Last Donation Amount Last Donation Date Last Donation Motivation/Source Last Donation Designation Tax Receipt Information Previous Donation History Donor Preferences/Requests 3. Know Your Key Segments Active 1 Last gift within 6 months $10 - $249 $250 -$499 $500 -$999 Active 2 Last gift within 12 months $10 - $249 $250 -$499 $500 -$999 Active 3 Last gift within 18 months $10 - $249 $250 -$499 $500 -$999 Active 4 Last gift within 24 months $10 - $249 $250 -$499 $500 -$999 Lapsed 1 Last gift 24 to 36 months $10 - $249 $250 -$499 $500 -$999 Lapsed 2 Last gift 36 to 48 months $10 - $249 $250 -$499 $500 -$999 Lapsed 3 Last gift 48 to 60 months $10 - $249 $250 -$499 $500 -$999 Prospect One segment per file 3

4 4. How to Measure Success # Responses by Mail $ by Mail # Responses Online $ Online # Monthly Donations $ Monthly Gifts Response Rate $ to Acquire a Donor Gross Average Donation $ to Acquire a Donor Net Profit Margin Gross $ to Raise a dollar Measure each of these by segment 5. Targets to Shoot For Active 1 Last gift within 6 months 10% to 20% Active 2 Last gift between 6 and 12 months ago 15% to 25% Active 3 Last gift between 12 and 18 months ago 10% to 15% Active 4 Last gift between 18 and 24 months ago 6% to 10% Lapsed 1 Last gift between 24 and 36 months ago 5% to 8% Lapsed 2 Last gift between 36 and 48 months ago 4% to 6% Lapsed 3 Last gift between 48 and 60 months ago 2% to 3% Prospect One segment per file 1% to 3% 6. What You Should Spend #10 Window Envelope Two-page letter with reply Insert BRE Strategy and Concept Creative and Copy Art & Revisions Print & Production Postage QUANTITY COST PER PIECE 1,000 3,000 $ $4.00 3,000 5,000 $ $2.00 5,000 10,000 $ $ ,000 20,000 $ $ ,000 30,000 $ $ ,000 50,000 $ $ ,000 75,000 $ $1.20 4

5 7. The True Value of Incentives Labels, Calendars, Key Chains, Tote Bags and other Swag EXPENSIVE: Measure their value properly 1. Response rate and average donation compared to non-incentive packages 2. Cost of acquiring a donor or raising $1 compared to non-incentive packages 3. Compare incentive donors with non-inventive donors in future campaigns Don t get hooked before knowing the impact on future giving 8. The True Value of Monthly Donors One of the best investments you can make! (Monthly Gift X 12) + (Previous year 10%) + (Previous Year 10%) + (Previous Year 10%) + (Previous year 10%) + Previous Year 10% 10 per month 100 per month Year 1: $1,800 Year 1: $18,000 Year 2: $3,420 Year 2: $34,200 Year 3: $4,860 Year 3: $48,600 Year 4: $6,120 Year 4: $61,200 Year 5: $7,200 Year 5: $72,000 Year 6: $8,100 Year 6: $81,000 And still generating $900 per year And still generating $9,000 per year When do you ask a donor to join monthly giving? At every opportunity! Within weeks of their last donation With a thank you letter & tax receipt In almost every appeal By mail, phone, online, peer to peer At special events At board meetings At staff meetings 5

6 9. The Outer Envelope One Job: Get Opened If it fails, guess what? KEY FACTORS Postage Message/Teaser Open Weight Size/Style Imagery me! Colour 10. Components of a Great Letter Ensure the reader knows what they will be funding The Ask: up front, in the middle and at the end Looks inviting to read optically pleasing Blend of imagery and copy Small paragraphs short sentences Conversational and informal A story that personalizes the cause or mission State your achievements and the plans you have Try to relate a donation amount to an outcome P.S. support the ask! 11. Variable Copy & Donation Matrix Options A Letter and reply device for every segment One or two paragraphs that refer to primary segments Unique donation options relative to donation history Relate to an active $500 donor Relate to a lapsed $30 donor Relate to a new donor prospect Relate to a potential monthly donor And everything in between 6

7 12. Does Length Really Matter? Longer/four page letters pull better IF You have something compelling to say Short pages, wide margins, brief paragraphs A one page letter can pack a punch Reminder Two page letters work well balanced with an insert One works the emotional angle, the other presents the factual 13. The All Important Insert Incentive Newsletter Personal Note Brochure Monthly Giving Leadership Giving Supports the ask Works on its own Augments the appeal Diverse giving options 14. The Impact of a Good Reply Coupon Can generate a donation on its own A strong giving line Giving options that reflect past donation history A side dedicated to monthly giving Collect valuable information address Telephone number 7

8 15. The Lowly BRE Don t forget it One colour is enough Postage paid Don t worry about the stamp 16. A Word About Newsletters A great information vehicle about your organization Also needs to be optically pleasing and easy to read 2 to 4 pages with photos and graphics Content should support the appeal and ask Borrow from an existing news letter No cheque presentations please Consider content that is helpful to the donor 17. An Ideal Direct Response Schedule TIME LINE CONTENT Jan/Feb Annual Appeal: The year in review & the year ahead Monthly Giving Telemarketing Call Mar/Apr Reminder to Annual Appeal May/Jun Special Topic/Need Appeal Sep Special Topic/Need Appeal Nov Holiday Season Appeal Dec Reminder to Holiday Season Appeal Lapsed donor reactivation call 8

9 18. I Hate Telemarketing! But it Works! Monthly donor conversion Lapsed donor reactivation Major appeal support Advocacy call to action Membership renewal Survey your donors 19. Why Bother With Social Media? Engagement is the new acquisition Followers can become donors Speaks to a new generation of donors Boomers are jumping into social media Don t get left behind Develop a social media strategy Facebook Twitter The Double Edge Sword An effective and inexpensive communication vehicle An emerging source of charitable contributions A great reminder to a direct mail appeal BUT it still needs to be supported by Direct Mail Even when a donor responds to an Easy and pleasing to read Ensure your donors have opted in 9

10 21. Why Direct Response? Planned Gifts Major Contributions Monthly Contributions Repeated Donations Annually Renewed Donations from Donors First Time Donations From New Donors Yours Sincerely, Thank You! Peter Hoppe RHAFund.com 10