more income from direct mail!

This week we’re talking about 5 steps for producing direct mail fundraising that work! And by “work,” I mean that it brings consistent net income for your ministry or non-profit.

Gone are the days when it was easy to raise money in the mail. In spite of my pronouncements that mail is dead (maybe “on life-support” is the right description), most organizations still depend on mail as a consistent channel for donor cultivation. Speaking of that, in this series we’re focusing on cultivation—raising money from your existing donors. Acquisition of new donors is a very different animal (a dangerous, crazed, rabid animal). We’ll talk acquisition another time.

One more thought before getting down to business. Direct mail is a relationship tool. Everything you do must be about building relationships with your donors. You will not be successful with a “mailing more” attitude.

And since I brought it up, if you’re working with a vendor or an agency that helps you with your direct mail, think carefully about their pricing structure. If they make money per each piece that they mail for you, do you really think they are EVER going to suggest mailing less? More on that another time, but we continue to see situations where agencies mark-up the printing and mailing. Ummm…that’s a profit center for them. They have to protect income by mailing more—they have bills to pay. So, think about the structure of those vendor/agency relationships. Sorry, I’ll put my soapbox away for now. Back to Direct Mail…

Step 1 to improving your direct mail results:

1. Gather Data
You can’t just dive in. I’m usually a “plunge” kind of guy, but not here. Before you start thinking about what the letter will look like or what you’ll write about, figure out what the past has looked like. Kick over the rocks, dig deeply. What are the results from your past efforts?

Do your best to get at least 2 years of data. (5 years probably isn’t worth the effort to find since so much has changed culturally and technologically during that time.)

Some of the key numbers you’ll want to gather are:
number mailed
number responding
gross income
expenses (all the expenses including internal costs)

With these key numbers you’ll do basic calculations to determine:
response rate
net income
average gift
ROI (return-on-investment)

You’ll need a spreadsheet like this. These aren’t exactly rocket science but it might help to have a starting place and to be sure you’re calculating correctly.

If you can’t manage to find all of this, get what you can.

Let the sorting begin. The first places to sort on are ROI (Return on Investment) and Net Income. Gross income can fool you. Response rates can be seductive. But you can’t write checks on gross, and response rate, while a nifty number to look at, isn’t tied directly to income, which limits its usefulness.

We could spend hours and hours talking about how to read this basic response report, but we’ll save that for another time.

Now for the fun stuff:

What were the winning appeals by net income?

Are they the same by ROI?

If not, why not? What caused the variance?

What were the losers?

Do you see some topical themes? Did the winning impacts have similar topics or subjects?

This is important. try to avoid comparing only a 12-month period. Your ministry will certainly have seasonal swings in income. Because of that, you’ll want to compare winners and loser by season or month—December 06 to December 07 to December 08. A great January appeal might look terrible when compared to a December appeal.

Get all of your numbers together, do your sorts and think about what did well and what didn’t. Use what you’ve learned (and will continue to learn) to inform step #2 which is the next topic in this series: Strategy.

Steve Thomas
Partner, Oneicity

(photo credits: amagill, 23522713@N05 and alexkerhead)

Steve Thomas

Steve Thomas

5 thoughts on “more income from direct mail!”

  1. I love using direct mail as a tool for fundraising and building donor relationships. In my work with small nonprofits, I’ve found that too many times, organizations expect the donor to take the initiative to send in a gift. By sending a letter through the mail, you can remind a donor that you still need their support and offer them a way to make a gift. If you include a reply envelope, then you’ve made it convenient to give, too.

    Even in these “bad” economic times, I’m seeing small nonprofits do well with direct mail.

    Sandy Rees
    Fundraising Coach

  2. Gathering data and reviewing appeals is important and you should give yourself enough time to make wise decisions. I usually do this research before telling others that I am even thinking of decreasing a mailing. Because it might turn out that all your appeals are giving you a good ROI. Also get someone else to review your spreadsheets just to make sure you didn’t miss anything. In fundraising – if you decrease a mailing in one area you’ll need to make it up somewhere else.

    Thanks to Steve’s eye on my reports he has helped me make wise decisions and stopped me from dropping an appeal that really did well.

  3. @Carol, Thanks so much. You are so right about the linkage of analytics and strategy. You’re singing our tune. Funny how so much of this work involves a balancing act–strategy and analytics, income and expense, expectations and reality, faith and experience… our next visual for the website should be a tightrope walker!
    As always, ‘appreciate your insights.

  4. Pingback: oneicity // income solutions for non-profits » ask your agency #3

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