Focus On: Premiums: Here Donor, Donor

Premiums can take many forms, from traditional address labels and calendars to the more unusual seed packet or even piggy bank. What they all have in common is the ability to get the mail opened, generate higher response rates (than non-premium efforts), and drive us all crazy with worries about their up-front cost and the value/renewability of the donors they acquire.

We love to hate them, but the fact is premiums comprise a majority of nonprofit acquisition mail, and their usage remains steady. Subsequently, for many nonprofits today, there is increased competitive pressure to stand out in the mailbox. And while many have come to rely on the response rates that premium packages bring, the days of indiscriminately mailing address labels are over. We need to become smarter about what and when we mail, and to whom.

For the purposes of this article, we’ll define a premium as an item of perceived value that is included in a mail piece (front-end) or promised as a gift, contingent upon a donation (back-end).

As part of its ongoing research, New York-based ParadyszMatera, an analytics and media-services provider, tracks 2,200 unique nonprofit fundraising promotions each year. That research shows that premium use within the nonprofit space has remained steady for the past three years, with between 55 percent and 60 percent of the nonprofit mail studied including some form of premium. Front-end and back-end premiums are equally popular, each accounting for roughly 35 percent of total nonprofit mail volume.

One interesting point to note is that there is significant variation in premium use among the subcategories of nonprofit mailers. For instance, premium use by the nature/wildlife category has hovered near 95 percent (of unique campaigns) for the past three years. By comparison, premiums from humanitarian mailers have been tracked in only one-third of in-category mail pieces. Front-end premiums are most popular with Catholic mailers, who were tracked in the first half of 2005 to have included them with 66 percent of their mail volume. The disease/health and military/law categories saw about 40 percent of their mail volumes using up-front premiums.