Focus On: Premiums: Primed for Premiums
In Komen’s six-year direct mail history, incentive-based campaigns have drawn higher response rates from prospects than mission-driven appeals, but the average gift has almost always been lower — as is the case for most premium-centric organizations.
But Cain stresses that Komen’s donors do not possess the typical characteristics associated with ofttimes impulsive, premium-responsive individuals.
“We have very strong direct mail donors who have been donors for more than five years and give twice a year, to every awareness-label mailing,” Cain says. “Fortunately, our labels carry the pink ribbon, which are more mission-related than labels that don’t have a distinct symbol of the organization or cause.”
Komen has tested calendars, notepads and breast-health information cards as front-end freebies, but not one has outperformed the name-and-address labels.
Use of incentives on the rise
In calendar year 2002, the Archive logged approximately 2,306 fundraising mailings. Of that total, 214 (9 percent) included or offered a premium. But in calendar year 2003, the Archive logged 1,852 fundraising mailings, with 420 (23 percent) offering premiums.
Gary Kline, president and CEO of SCA Direct, a Fairfax, Va.-based direct marketing consultancy serving the nonprofit sector, advises organizations that are contemplating premium-based campaigns to first explore the economics and how such incentives will effect net revenues.
“Typically, a well-run, premium-based acquisition program is going to get three to four times the number of donors than a well-run, non-premium-based acquisition program,” Kline affirms. “And if you only get a quarter of the scale with a non-premium program, you have to determine what type of long-term value you need to achieve.”
Does your budgetary process allow time to build a large donor file without offering premiums?
“The savviest organizations find a place for both,” Kline says. “They have a premium-based file, a non-premium-based file, and a crossover group for which they mail both premiums and straight appeals to.”