The Five Warning Signs of Direct-mail Fundraising Trouble
2. Lapsed program cost-per-donor-acquired is higher than some acquisition. Making direct-mail strategy decisions based on the ROI performance of your entire lapsed program can lead to the rendering of some "false positives." Instead, try stratifying results by year of last gift, lifetime value and/or gift patterns before lapsing. The keys are identifying at what point the cost-per-dollar-raised recapturing of a lapsed donor exceeds that of acquiring a new one -- and adjusting strategies to react. By qualifying the lapsed file -- eliminating high-expense/low-return cells -- you'll be able to maximize your allocation of resources. Money saved can be used to improve other portions of the program. Or it can, on its own, improve your net return.
3. Number of donors making two-plus gifts per year is in decline. Gift recency and frequency are still the overwhelming predictors of when a donor will make his/her next gift. Donors making two or more gifts (versus only one) within the past year can be three to five times as likely to give in the next six months. If your multiple donors' vital signs are down, initiate a quick fix, this year, before the problem compounds. Consider a more aggressive thank-you program, a stronger push in monthly giving or additional appeals to the heart of your donor file.
4. The lapsing rate of your new donors is increasing. The method, medium and/or tool used to acquire the first gift must be heavily factored into second-gift conversion efforts. It's highly likely if you used a premium to acquire, you'll need another one to renew. Emergency-appeal donors will require similar urgency. If the first gift came in as a result of a telephone call, the donor probably will need something more interactive than direct mail to secure the second gift.
For new donors, two other factors will influence renewals. The first is when you ask for the renewal. If it's more than six months from the point of the first gift to when you ask again, chances are your results will be poor or mediocre. Find a way to recapture their attention once again as soon as possible, and be sure you ask for another gift no more than three to five months after the first event.