Tuesday, June 16, 2009

To premium or not to premium?

I know this is a question many organization’s often ask themselves and I’m not the first to blog about this. Nor will I be the last. By premiums I mean including things like labels, gift cards and even blankets (yes even blankets!) as gifts in DM packs.

My response is pretty simple. If it works keep doing it. BUT…

By ‘works’ I mean, does recruiting premium donors deliver more value in the long term (taking into account subsequent gifts, cost to cultivate and send ongoing premiums) as non premium recruits?

If the answer is yes then keep doing it.

Intuitively many fundraisers think that that this is just a tactic to get people in and the long term value is not as great. This is where data is great. Well actually, not just data, but data + intelligence, which equals insights.

And so recently with a Canadian client we looked at this very situation. The client has a very strong premium driven program, recruiting big volumes. But they also tried, like many organizations to “beat” their premium control pack with a non premium (or what many refer to as “mission based”) pack.

When we looked at the data, what we saw was no statistical difference over the lifetime of the two types of recruits, looking at response, average gift, income and the total value (again, taking into account all subsequent costs and income).

The key thing for this client however, and tipping them in the favor of continuing with their premium strategy was that the volume they were able to recruit with the use of premiums far outstripped the volume they could get using their mission pack.

It was a no brainer for them. Premiums it is.

However, one caveat. Where this client, and many others could do better is by using really solid, supporter focused, personal and authentic style warm/house mailings to develop these relationships further. Many have tried and failed with this (because of the “reliance” by premium recruited donors of receiving further premiums).

But I have to say that what I have seen by many trying this is frankly, garbage.

By supporter focused, personal letters I mean data driven (referring to past support, motivations etc), long letters, use of colloquial language throughout, telling brilliant and emotive stories. Really solid relationship management.

So what’s the message here?

Of course the answer is always test, test and keep testing to see what works best.

It may be premiums as the key tool in your recruitment strategy, it may not. It may be a hybrid to balance volume versus value. And of course, look at the data to see what happens long term, not just comparing response rates and average gift. Dig deeper.


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