Premiums are vital to many direct-mail, donor-acquisition progams. But address labels alone might not do the job.

By Amy Koop

Optimize performance
The key to optimizing performance of premiums in the future will be a combination of these factors:

Frequent and consistent testing into fresh, new creatives, including systematic package rotation;

A deliberate match of incentives to particular sub-audiences; and

The disciplined use of LTV information in a true donor ROI analysis.

The last point cannot be made too strongly. We are entering a new era in donor acquisition, one in which a complete ROI analysis must be done on every prospect group. Increased access to LTV information is shaping the argument over premium use. Organizations are developing an evaluation system that accounts for the LTV of donors acquired by premiums versus those by non-premiums (and other non-direct sources).