Two Common Direct-mail Production Issues

Two Common Direct-mail Production Issues

April 18, 2006

By Abny Santicola, editor, FundRaising Success Advisor

There are two perennial direct-mail production issues, according to Stephen Hitchcock, vice president for client services at Berkeley, Calif.-based full-service fundraising firm Mal Warwick Associates. They are:

1) The timeliness of mailings, i.e., trying to get them out as quickly as possible; and

2) Finding what Hitchcock calls that "sweet spot" of cost effectiveness.

In terms of the timeliness of mailings, Hitchcock says there's always a desire on the part of the direct-mail production staff and the printers to have a certain amount of lead time. Balancing this with the need for staff to agree on things like the text of the letter is where the challenge is. Hitchcock says timeliness also is a factor for some clients that deal with emerging issues or breaking news, whose challenge is to keep the production time gap as narrow as possible.

One way around this challenge is using laser personalization, which allows you to have form letters where you can insert a person's name in the salutation, have an "original" signature or input any other data your organization wants. The costs for laser personalization continue to decline, Hitchcock says, and production of laser-personalized direct mail is much faster.

Organizations can even use laser personalization to respond to urgent issues by having a generic outer envelope and reply envelope that can be printed ahead of time.

As for cost effectiveness, Hitchcock says, postage is the most significant variable in cost for mailings to an organization's current members or current donors. "The decision of when to use First Class postage and when to use nonprofit standard postage is a big one," he says. "It makes a big difference in the cost."

Another dilemma is whether to put a live stamp on the reply envelope. Hitchcock says probably the most effective way to influence response rate is to put a live stamp on a reply envelope, but when you do that you're talking about a 39 cent investment per mail piece. "In general, when you're mailing donors who give $25 or less, for most of them, it's very, very difficult to raise net revenue if you're mailing that out at First Class. Unless they're very, very responsive $25 donors. Conversely, if you're mailing donors who have given $100 or more, it's almost always worth investing in First Class postage and also investing in putting a live stamp on a reply envelope."

Hitchcock adds that another way to control costs is to mail larger. "The larger the mailing, the lower the per-unit cost. So large-quantity mailings are the place to put lower-dollar donors and donors who haven't given as recently to the organization," he says.

In order to keep testing costs to a minimum, Hitchcock says, organizations should always test things that will make a difference and avoid tests of things like different color combinations. The most influential test is the gift amount, he advises. It's also usually the least expensive test from a production standpoint, he says, because you can alter the reply device and keep the other package components the same.

Another test that has low production costs and can make a lot of difference in the cost of your mailing is business reply envelope vs. a "Place Stamp Here" reply envelope. "The cost to the organization of using business reply envelopes can be significant over time," he says. If the use of the business reply envelope doesn't increase gifts, then the organization can stop using BREs, which can result in significant savings over time.

All in all, Hitchcock says its important for organizations to develop a relationship with their printers or letter shops. "On-site visits to the printer and the business mailer or the letter shop is really important to develop that relationships," he says. "It's worth the visit and worth spending time with those people so that they become partners and colleagues and even friends. So that they become your allies in this process because there is a great deal of variability both in terms of cost and quality, and the depth of that relationship will influence both of those."

Stephen Hitchcock can be reached via http://www.malwarwick.com