Four Tips for Acquiring Donors With Premiums

Four Tips for Acquiring Donors With Premiums

August 18, 2005

By Peter Schoewe

Mailing premiums in acquisition is a great way to double or triple your response rate. But it's important to recognize that a premium-acquired donor will behave much differently on your file than a non-premium-acquired donor. It's critical to measure the long-term value of the donors you are acquiring, rather than basing decisions solely on initial results. If you keep this principle in mind, and constantly test both package and list, premiums can play a valuable role in your acquisition program. Here are four tips we've learned at Mercy Home as we've striven to build an integrated acquisition program:

1. Don't measure success based on the cost to acquire a name. Instead, calculate by package how much you can afford to invest in a new donor. At Mercy Home, we've found that it typically costs us $6 to acquire a name using a greeting card package, while it costs more than $20 to acquire a name using a non-premium package. However, the one-year value of a non-premium donor is almost three times greater than that of a card-acquired donor. That means we're willing to invest much more upfront to acquire non-premium donors, knowing that the investment will pay off in the long run. Premiums are still an important source of donors for us (because nonpremium donors are much harder to acquire), but we're very careful not to invest too much in getting them on the file.

2. Make sure to match your acquisition package to the appropriate audience. Some lists will only work for premiums -- while others will work great no matter what you mail. For the latter type of lists, we make sure to maximize acquisition of high-value donors using a non-premium package before we begin to mail premiums.

3. Be sure to test even your most firmly held beliefs about your control package. We had always assumed the letter mailed with a premium should focus on the benefit of the premium. We tested more mission-focused copy and nearly doubled our results. This is only one example -- to ensure that we are mailing the strongest package, we constantly test both refinements to our existing controls and entirely new packages against our controls.

4. Don't be afraid to renew premium-acquired donors with non-premiums -- and non-premium-acquired donors with premiums. By far, our highest-value donors renew using both premiums and non-premiums, regardless of their acquisition source. In fact, we gain almost no net revenue from premium-acquired donors who renew only with premiums. We always attempt to inspire a donor's second gift by using the same type of package as the acquisition package -- but, after that, we make sure our high-value donors are exposed to a multitude of different packages with which they can renew.

Peter Schoewe is director of direct marketing for Mercy Home for Boys and Girls and was a speaker at the session "Beyond the Mailbox: Strategies for Successfully Utilizing Premiums" at the DMA 2005 New York Nonprofit Conference yesterday, Aug. 17.