FundClass Archives:
Direct Mail
Edited Digest of FundClass Topic #03, June 1997
Judging from the responses and questions on this topic, direct mail is a huge issue for many fundraisers, both veterans and newcomers; issues raised ranged from the technical-on-mailing to the general-what-is-it.
Some basic thoughts about direct mail
What should go into a DM piece? . . . a clear statement of need, perhaps a testimonial of some kind, and a BRE (business reply envelope), at the very least. /// Another response: use "courtesy reply" (donor pays postage) instead of business reply (you pay the postage), with the words "Thanks for paying postage" in the upper right corner of the return envelope. Testing indicates that response is the same no matter who pays the postage.
How often should I mail? . . . good question . . . twice a year to already-donated, and one or two large mailings to 'suspects' in order to build your list, might be a good place to start. See below for more discussion on this. . .
How long should a letter be? . . . conventional wisdom says one page . . . but see below for more discussion on this issue
What kind of response rate is reasonable to expect? . . . 0.5-1% is usually considered good response to a "cold" mailing (i.e. to a list you've never mailed to before) more on this below.
When should I mail? . . . one respondent quoted the Chronicle of Philanthropy on when fundraisers mail out appeals: November was first choice; October second; August and September tied for third; and March was fourth. Some logic says you should mail when everyone else does, in order to get "your piece of the pie"; others say mail when everyone else isn't, to get undivided attention from readers. . .
What makes for a good appeals letter? . . . a picture or photo is a great attention grabber; use indentation, bold type, and lots of white space to make it easy to read; include a PS restating a fundamental purpose, leaving the reader with the main thrust of your message. . . . hand addressing envelopes is great, if you have volunteers to do it . . . use stamps instead of a postmark to make your envelope look more like personal mail . . . and, of course, as much personalization in the text of the letter as you can include!
Length of letters
Conventional wisdom, and one respondent, insists that an appeal letter should never exceed one page in length . . . the premise is that most people won't read more than a page. However, several people responded with a different opinion. . . one quoted Mal Warwick's (a direct mail 'guru') theory that a letter should be as long as it takes for you to get your case across effectively. If you can write a good, clear, effective letter in one page, great. If it takes more, then go ahead, as long as you don't ramble and bore readers to death! And don't fall into the trap of using smaller type and thinner margins and no white space, just to fit it all on one page . . . that trick isn't going to fool anyone, and making a letter hard to read won't get you the response you want. Remember, our population is aging quickly, and larger type size is probably better than smaller.
Another opinion included the observation that while you may be able to write a one-pager to donors who've already given and basically just need to be reminded that you still need funds, it's probably not realistic to think that you can explain your cause and all the reasons why giving to you is good in one page to people who you've never contacted before.
What to include
A successful DM fundraiser says: a brochure or picture depicting a child in need (the organization raises fund for childrens' medical needs), because emotions do more to encourage a donation than reason; a cover letter telling the story of the child; a pledge card with amounts ready to be marked: $50, $100, $500, $1000, other (I find it to be true that the second item is the one most people fill in; I receive more $100 donations than the one marked 'other'); a postage-paid return envelope, and believe it or not, pink will get a higher return than white . . . no idea why. And for best returns I place a first-class stamp on each envelope . . . not so costly as you might imagine; my returns determine the cost and I get very high returns. . . my experience shows that using a plain business envelope (no color 'handwritten' notes, or other gimmicks) and a normal, first-class stamp, gets best results . . . the premise is that the more important and personal a letter looks, the more likely it is to be opened AND read. Keep the bulk-mail permit for newsletters! It doesn't pay to be penny wise and pound foolish . . . if you expect/want a high return, you have to spend money to get it.
The next message indicated agreement, and added: we have taken to mailing ink pens with our name, address and phone number on them to donors who haven't given in a year or so, and also to regular donors as a thank-you. The pens cost us pennies, and no extra postage, and are a continual reminder of us.
One respondent's experience indicates that including a full-color brochure tends to suppress response, rather than increase it. The reason many nonprofits send out a package consisting of letter, reply device, and return envelope is that it works! Several other particpants agreed with the idea that for renewals a letter worked best, but felt that using brochures and newsletters are good ways to boost interest and response; perhaps being mailed at different times, or use the color brochure for new prospects, or to pique the interest of donors who have not given in several years.
How often should mailings go out?
"As often as it pays to mail" . . . most truly successful DM fundraisers mail more often that you would think possible, according to one respondent. Once or twice per year to best donors is too little . . an old adage says: if you're not mailing to your donors, someone else is. The answer is, there is no simple answer to this question. It depends on the recency of your last mailing, the amount of previous giving by donors on this list, and other factors. Testing is important; record keeping of results is important. DM fundraising is a constant learning experience. . . . And one participant suggests that worrying about offending donors with too many appeals is overdone . . . that it makes more sense to keep appealing until you get a donation or a "get lost" message, than to let names lapse into an 'inactive' list.
Response rates
Percentage of responses from a mailing is not really the important point here . . . money raised is. Most fundraisers measure cost per donor acquired, for acquisition mailings; and cost per dollar raised, for renewals. Most acquisition mailings lose money, but generate donors (at a cost of $10 to $100 for each) that pay for themselves in subsequent mailings. Of course, if you don't measure that subsequent revenue and tie it back to the acquisition effort, you'll never know (or be able to control) whether the donors you get pay for themselves or not over time.
Direct mail as a prospecting tool
One respondent sees DM as a tool to move people thru these steps: suspect, prospect, donors, special long-term donor. The first mailing should be to a large group of 'suspects' (possibly a rented list) of people who've never given to your organization; you might mail to these people several times. As they respond to your mailings, they move into the prospect and donor categories, and go onto different, more qualified, mailing lists, and get a more personalized and targeted mailing. At least once a year, they get a letter which thanks them for previous donations, tells them the impact of that gift on your program, and asks them to continue giving, and consider an increase over last year's gift. And, as the donor becomes a long-term giver, it is appropriate to send them more educational material as well as appeals.
This last list, of long-term givers, has evolved out of your larger 'suspect' list, and these people become targets for your larger annual gift list, and special gifts such as memorials, bequests, and estate planning. This process will take from two to four years. A key to success here is to nurse donors along the line, with special mailings to the various levels of donors, and gently urging donors to give more every year.
Newsletters
There were several questions about using newsletters as DM appeals and educational tools. Some tips and ideas:
- Don't lose sight of the cost-effectiveness of your campaign. If you spend too much money on the newsletter concept, you risk turning off potential donors (who want to see as much money as possible go directly to programs and services).
- One questioner mentioned sending out a newsletter about every 8 weeks; a response was to limit newsletters, even 4-page ones, to quarterly at most, especially if it is unsolicited, as everyone seesm to be overwhelmed by information overload these days.
- Combining a newsletter with an appeal for funds can work, but this shouldn't be the point of newsletter mailings. Use a direct-mail letter for direct fundraising, sent to every newsletter recipient (plus others), with a clear appeal and an ask for a specific amount.
- One respondent's experience that worked: when you're starting with a prospect list (as opposed to people who have already given), do two or three letter-mailings; then mail a newsletter which includes info about your program/services, donor and volunteer acknowledgement, and an implicit ask by reporting on fundraising activities and including a return envelope.
- One questioner is planning to have different newsletters, for fundraising/education, donor recognition, and for volunteers. A respondent suggested that combining them into one might make more sense, save time and money, and eliminate waste since there's likely to be a lot of cross-over among those groups.
Bulk mail questions
Q: Does personalization disqualify letters for bulk mail rates?
A: Depends. . . . an invoice or single letter does not qualify for bulk rates, but check out presorted first class mail rates to see if that would help. But substantial personalization in an appeals letter will not disqualify the solicitation from bulk rates. The Post Office has a document (a book, actually), "USPS Domestic Mail Manual", which will tell you a lot about mailing, tho it's not always easy to understand. There is a 'bulk mail acceptance' manager at your regional postal headquarters who should speak plain English and be able to help you understand this stuff.
Q: I need help understanding how to use "Address Correction Requested" properly. . . . how often? what does it cost?
A: Some people use it on every envelope they send out, feeling that whatever the cost, it's worth it to keep track of people. Others disagree, and find other ways to keep lists updated. One person warns: do not put 'address correction requested' on mailings you do with a rented list . . . when I did that it cost us a fortune!
Another respondent tells us that the USPS is changing their language, and will accept the old only thru the end of 97. This would be a good time to check with your local postmaster for new information, and be ready for changes the next time you have envelopes printed, for instance. A quick summary of mail services:
- Address Service Requested: mail forwarded for 12 months at no charge, separate notice of new address provided for a fee, and different options for months after the first 12.
- Forwarding Service Requested: mail forwarded for first 12 months, no fee; months 13-18, mail returned with new address, different options after that.
- Return Service Requested: mail returned with new address or reason for nondelivery, return postage charged.
- Change Service Requested: separate notice of new address or reason for nondelivery provided; address correction fee charged, and mail disposed of by USPS.
- If no endorsement, mail disposed of by USPS. (in other words, if you don't say request one of these services, the mail will be tossed out if it's not deliverable!)
One respondent tells of using a USPS BBS to get address corrections electronically and at a much reduced rate . . . check with your postmaster about this.
Mailing list maintenance
Q: Can someone give me a quick lesson on keeping my mailing list current?
A: Sure . . there are four ways to use the USPS to help keep your list up to date:
- Mail a first-class letter or postcard (double postcards go at the postcard rate, and the reply portion can be pre-printed with the donor's address, for them to correct and return to you) . . . first class mail gets forwarded at no charge to you.
- NCOA, a cheap way to get addresses corrrected before you do a mailing. (see below for more specifics.)
- Address Change Service: see above; the benefit of getting your corrections electronically is that you save time/keying errors by not having to key in corrections at all.
- Endorsement on the piece itself: this is the slowest and most costly way to keep lists current. If there's no endorsement, pieces are trashed, unless you endorse it "or current resident", but that's not likely to get you a donation, and won't do a thing to find the person you were looking for.
You'll have to work out for yourself the best way to do this, based on the cost of the mailing piece, the value of a donor receiving it if they have moved (maybe out of your service area?), the costs of setup, programming, NCOA, etc, and most importantly, the cost of losing a donor (what did it cost you to add that donor to your list in the first place, and what will it cost to replace him with a new donor?).
NCOA (National Change Of Address)
For those of you not familiar with it, this stands for National Change of Address program. The USPS licenses private businesses to process mailing lists for a fee. You send your list to a processor (on disk or mag tape or via the Internet); they process it against a master copy of all address changes reported to the USPS for the past three years, and update your database with new addresses. Some also provide address standardization and Zip+4, and CASS-certify the list so you can qualify for the lowest bulk mail rates. The cost is low, around $2--$5 per thousand names, depending on the processor and the level of service.
Not all processors will bother with small lists (100,000 or less). Two who work with lists of any size at a good rate:
Lorton Data, 2125 E. Hennepin Ave, Ste 200, Minneapolis MN 55413-2717; 800-347-1574; www.lortondata.com
MAILnet Services, 701 Murfreesboro Pike, Nashville TN 37210-4521; 615-742-1368; www.listcleanup.com
NOTE: if terms like 'zip+4' and 'CASS-certified' are new to you, contact your postmaster for USPS documentation on bulk mail and other services, or check out the web pages for the above processors or the PSS web page on NCOA (ncoa.html)
Collecting information
What info should I collect for my database, beyond name, address, etc? . . . donor source (where/how you got the name); donor type (individual, business, church, civic group, etc); any known relationship to your organization (board, volunteer, client, alumni, etc) are the most important. Next, anything about why they give to you: which program are they especially interested in, or what effect or impact does your organization make on the community that touches them. . . that kind of thing. Other fields that may be of benefit: employer, any church, civic group, or social affiliations, relationships to other donors, alternate addresses, age or age range, gender, date of birth.
I want to circulate surveys at an upcoming special event to help us pinpoint what our donors think about what we do. Any suggestions? . . . "On which of the following activities would you encourage us to focus our efforts for the coming year?" -- then list things you do, plus a place for "other". . . . "Tell us which of the following [issues, programs, needs, etc] are important to you" -- then list them, followed by "(__)very important (__)somewhat important (__)not important". . . . . you might also want to give a space for donors to indicate whether they might volunteer some time (be sure to have a volunteer coordinator ready to follow up quickly if you do that) . . . you may ask how they feel about the various fundraising activities you do (do they prefer to get letters; if so, how often; how do they feel about a phonathon; etc). Remember that people are often flattered to be asked for their opinion; and they will react well to appeals if they feel they have some input as to how the money is spent.
No List Yet? Leading into our next topic: Special Events
If you're a new nonprofit, and find all the above discussion of direct mail appeals interesting but not helpful since you don't have a mailing list yet, our next topic might be of more interest to you. A "special event" is a great way for a new organization to develop a mailing list. . . . include in the event a drawing of a door prize that a local merchant donates (be sure to give them credit often and loudly). In order to register to win, people must fill out a card listing their name, address, and phone number. These cards are gold, guard them well! After the event, you enter all that info into your computer program, and voila! you've got a mailing list. . . well, the beginning of one, anyway.
Follow up with a mailing a month or so after the event, thanking people for attending and supporting your cause, telling them what a success the event was ($xxx raised, xxx new people attracted, etc), [people like knowing that they contributed to the success of something/somebody]; reminding them of what you do, who you serve, and mention an activity which relates to something they care about, if you know that (perhaps from a survey, see discussion elsewhere on this page); and asking for a donation . . . since they've already indicated at least an interest in your organization by attending the event, the odds of them donating are quite good.
And consider including on the raffle-entry card a question or two which might indicate why this person considers your cause a good one; this will help you personalize your appeals letter. Remember that the best direct mail piece tells a story which touches the emotions of the reader/donor. Facts and figures to satisfy the intellect are important, but it's the emotions which prompt a person to write a check and mail it!
