A Multi-Level Approach to Lists

For the Heritage Foundation, a conservative public policy “think tank” based in Washington, D.C., a typical budget is to mail 4 million to 5 million pieces. “We have a rough budget, but how much we mail depends on the year. For this year, plans are to mail 6 million pieces, looking to build on the opportunities created by the economy and the election year,” says Carsten Walter, director of membership programs for the organization.

In mailing, Heritage follows a multi-level approach, the key determinant of which is the initial gift size, Walter says. “The higher initial gift size is obviously more desirable,” he explains. “We look to build lifetime value, so with larger initial gifts we can work to establish a longer-term relationship.”

In looking at lists, the flip side of that higher gift size, of course, is volume. “Volume is important to watch, as well,” Walter says. Sometimes, to get higher gifts, you might give up some volume on a mailing. But it has to be a careful balancing act. Give up too much volume, and your new donors will slip to too low a level.

To address these concerns, Heritage uses a number of creative strategies. For example, Walter says, “When we prospect, we literally measure in bottom line net income. We don’t dismiss the low-dollar donor, but that might be cycled into a package that’s less expensive. With some annual donors, we try to convert to an EFT [electronic funds transfer] program where they become monthly donors.”

Constant list testing requires a balance of, “about one-third core lists, one-third just on the fringe of our universe and one-third testing outside the box to try to break into new lists,” Walter says. “We’re always trying outside-of-the-box lists, and occasionally we’ll get a hit off of one.” But when looking for prospects, it’s the tried-and-true lists of donors to like-minded organizations and subscribers to like-minded magazines that are Heritage Foundation’s mainstays.

With the goal of improving response on its own housefile list, Heritage has tried a number of strategies to bump up the effectiveness of its annual campaign. Says Walter: “We’ve always come back to two primary factors as being key: 1) the size of the initial gift needs to be beyond the $20 to $25 price break; and 2) new members need be brought into annual giving through a new-member program.”

That Welcome Program includes a thank-you note, a call thanking them and then a new-member package, which includes a survey and some in-depth information on the organization.

“The reason we’ve found this step is so important is it forms a bond with the new donors whereby they are more likely to become regular annual donors. It institutionalizes them,” Walter says. As he explains it, often that first new-donor gift is for a specific reason -- perhaps in response to a particular issue or emotional cause. It becomes necessary, he adds, to tell these new donors more about the Heritage Foundation and what it stands for, “So they can support it for the long term, and that’s what this Welcome Program does and why it’s a part of the first-time donor renewal.”

Both telemarketing and e-mail play some role in Heritage Foundation’s donor cultivation efforts. “Telemarketing works,” Walter says, noting the organization uses the phone primarily for renewals but also for donor cultivation such as thank-you calls. In fact, a telemarketing thank-you program led to a dramatic 30 percent increase in first-time donors becoming repeat donors.

E-mail also is growing in use at Heritage -- especially for existing donors and as a cultivation tool. This past year, Walter says, Heritage took in $400,000 in income off one of its Web sites. Even though Heritage Foundation’s average donor is 72 years old, and has been for 17 years, Walter believes further Web potential exists.

Alicia Orr Suman has been covering the direct marketing industry as a writer and editor for 15 years. She can be reached at aorrsuman@aol.com.