List Research from the Trenches
Assume that you have just stepped into the marketing job for an established nonprofit organization. Your predecessor has disappeared in the midst of planning a 100,000-name prospecting mailing, leaving you with a clever new package, ready to test against an established control; an updated housefile; and a yellow sticky note on your computer screen that says: “Set to go. Just have to order the lists. Call our broker.” Where do you begin?
CALL THE BROKER
The list broker who has been working with your new organization over time will fill you in on the basics, so make this call first. Go over everything from the client history to the list-exchange policy to the mail date. Work out a reasonable calendar. Time is now short, so discuss which of the established continuation lists will need to be immediately cleared. The clock is ticking.
DO THE NUMBERS
Dig out the list history and past campaign returns. Immerse yourself in the data. Make sure you know what the average gift has been over time, as well as the response rate by list, the cost in the mail and, most importantly, the net revenue per donor.
Without this number, you don’t have a clue what your investment is, so if your predecessor has left you without this key piece of data, do the calculation. What is the acceptable investment in a new donor? What is the lifetime value of a donor? (That is the sum of donations, responses to special appeals and list revenue over the life of a donor -- calculated with an average renewal percent over a number of years.) What is your renewal rate? Will you be responsible for replacing donors lost by attrition (check out the universe of the housefile) or does your new board of directors hope for growth? What are they willing to invest?
PLAN THE MAILING
Write a list plan with your broker. From your last campaign data, rank lists top to bottom by the net revenue per donor and calculate the names that you have available that qualify within an acceptable range of investment. Do you have enough tested, quality names to mail 80,000 pieces? Are you comfortable testing 20 percent? If so, then you have four tests of 5,000 names to select for this mailing.
TEST, TEST, TEST
Your success over time will depend on how carefully you select your few precious list tests. Deborah Hayden, president and founder of Pacific Lists of Corte Madera, Calif., suggests that although tests should be selected based on a history of responsiveness to like-minded offers, continuation potential, cleanliness and price, creativity and intuition can identify exceptional lists and new markets beyond the “usual suspects.” Are there discounts for fundraisers? Is this list available on exchange?
Your broker will give you suggestions, so actively discuss them in detail before you decide on this critical part of your campaign.
AND THE REVIEW
The best marketers know what the value of a donor is and what it costs to bring one in. As flash counts arrive, share them with your broker. Chances are it’s already time to begin planning the next mailing.
James E. Sullivan is president and CEO of Optic Nerve Direct Marketing, a full-service direct marketing agency serving both nonprofits and for-profits. Sullivan can be reached at 415.647.9462; or firstname.lastname@example.org.
Deborah Hayden can be reached at 415.945.9450; or email@example.com.