Nonprofits Tighten the Belt on Premiums

Last year in Inside Direct Mail, we wrote that the nonprofit sector was experiencing a “pretty big downturn in premium use.” Not only were total numbers down, but so was the variety of premium types being offered. Indeed, nonprofit premiums had an undeniable presence in both the 2003 and 2004 calendar years. However, after doing some research in our Who’s Mailing What! Archive, it became clear that the premium’s grip on the sector was beginning to slip, with 23.1 percent of nonprofit mail including a premium offer in 2003 and 16.7 percent in 2004.

Perhaps because of budget constraints and more conservative direct-mail strategies, support for premium usage in the nonprofit sector continued to erode, and at a rapid pace. The calendar year of 2005 saw premium usage among nonprofit mail shrink to 12.5 percent and, among total premiums, the percentage was practically sliced in two — leveling out at a measly 8.7 percent. The next year had almost as bleak an outlook, with only 12.3 percent of nonprofit mail including a premium and 9.3 percent of total premiums coming from the nonprofit sector. All this was occurring while premium use surged in the mailstream as a whole, from representing only 11.9 percent of the total mail in 2003 to 19.3 percent in 2006.

There were few new premium players in our most recent batch of mail, this past May. Not coincidentally, the types of premiums offered tended to be less diverse as well, as nearly a quarter were tote bags and almost 20 percent were books.

The only surprise came from freemium offerings, the percentage points of which hovered in the 20s for nonprofit mail in April for each of the past three years; however, in April 2007, the figure jumped to 54.7 percent, perhaps trying to make up for fewer premium offers?