The Power of Co-op(eration)
Co-ops have most often been used by nonprofits for prospecting campaigns, but they also provide nonprofits with numerous housefile models that help maximize their donors’ long-term value. Housefile models can significantly improve campaign performance by increasing net income; efficiently reactivating lapsed donors; and identifying monthly donor, major-gift and planned-gift prospects. Essentially, co-ops provide participants with an extensive, low-cost modeling toolbox for both prospects and donors.
How can a co-op help?
If you already participate in a co-op, but only take acquisition names as one of your vertical lists, test net file optimization or list optimization modeling to enhance your overall acquisition performance. Also test donor reactivation and housefile modeling to improve net income, and increase donor long-term value by identifying good prospects for other fundraising programs such as monthly giving, major gifts and planned gifts. Share your needs and objectives with your co-op account services representative, and work together to develop strategies and models that will meet or exceed your goals.
If you do not participate in a co-op, there are five good reasons for you to join one, or at least test one:
- Joining is free for most co-ops. The only requirements to join are that a participant provide its list of buyers or donors and their transactional histories and that the database is updated regularly.
- Co-ops are made up of all multi-buyers. Names added to the co-op must match a name that already exists in the database, which is why all of the names in the database are multibuyers. Names that do not match are “unique” and are not added to the co-op database.
- Model builds are free. Participants pay a very reasonable per-thousand rental fee for the names they receive, but they do not pay for model builds, which some companies charge as much as $20,000 or more to produce. Co-ops want their participants to be successful and will build and test numerous custom models for free to identify those that work best for a given participant.
- Modeled names perform better. Both acquisition and housefile names are selected and ranked from best to worst primarily based on an individual’s spending behavior (transactional history) and other factors found to be meaningful for each participant. Mailers can select the segments they wish to mail or eliminate unresponsive mailing segments, thus reducing mail cost and increasing overall mailing performance that neither traditional list-acquisition selection nor recency/frequency/monetary housefile selection can accomplish as effectively.
- Housefile models increase a donor’s long-term value. Not only do housefile models improve mail results through better selection, but they also can be used to identify the best prospects from within the current housefile for reactivation, monthly giving, major gifts and planned gifts.
You or others in your organization may have some concerns that have kept you from joining a co-op. Below are two objections heard most often and counterarguments to help overcome them: