Premiums and Paid Products Spotlight: Primed for Premiums?
WT: I think, and hope, that people are starting to mail smarter. We’re seeing fewer and less elaborate premiums overall. It could be that direct-mail investment is down due to economic uncertainty, but it could also be that people are learning more about when premiums make sense and when they don’t.
MBG: What are the pros/cons of using premiums for fundraising?
PB: Premiums can encourage a fence-sitter to give a first gift. They can encourage the second gift. They can also help build a habit of giving. I suggest what I call a “continuity premium.” This was used successfully for donors acquired via DRTV. They received a premium when they gave and were offered a complement to that for a second gift, third gift, etc. It was mission-focused and low-cost, but it felt like it “completed” the premium. (I stole this idea from Bradford Exchange after I ordered one plate and eventually bought all eight in the series rather than feel like I had an incomplete set.)
Con? They cost money, and many people just give to get. That’s why I keep repeating “mission-focused.” Don’t become the dollar-store version of a charity, giving away cheap trinkets for a few dollars; that’s when it just becomes a sales transaction, not a donation.
WT: Premiums can be a relatively inexpensive way to boost results, enhance the visibility of your brand and extend your sphere of influence (to a degree). On the other hand, donors brought in on premiums are usually less loyal and have lower lifetime value.
MBG: What are the most valuable types of premiums for fundraising?
PB: Mission-focused! Also, think about shelf life. I received a water bottle from an environmental nonprofit at least three years ago. I still use it, and it still reminds me of the organization — and I still contribute at least annually.