How Market Impacts Acquisition Testing in Direct Response Fundraising

1. Evolution Theory
How Market Impacts
Acquisition Package Testing
LISA MASKA, JENNIFER VANDERVELD, BETSY WASON

2. The goal is to acquire new donors – but not just
any new donors …
You want donors who will stay with you over the
years, and upgrade over time
And you want to acquire them at the lowest
investment
New Donor Acquisition 101

3. Increase Response Rate
Increase Average Gift
Lower Package Cost
Lower Cost to Acquire a Donor
Sometimes … Open Up New Markets
Goals of
Acquisition Testing

4. Include a strong case for support
Illustrate how you provide a solution to a problem
Show how you are uniquely able to provide this solution
Establish credibility
Tell stories
Be emotional!
Show how the donor can make an impact
Ask
Ask again
Be a little bit repetitive!
Elements of a Strong
Acquisition Letter

5. Reply form – Set the initial ask at the right amount
Carrier envelope – Use a teaser if you need it
Reply envelope – Pre-pay postage if you can
Inserts – Use additional components judiciously
Premiums – Approach with caution
Other Package
Elements

6. Look at lists by category
Study the control packages of your best lists – these
are what the donors you are going after are
responding to!
Get to Know
Your Market

7. Track donor retention rates
– A lower response rate may be okay if you know you
are keeping more of the donors you acquire
Keep tabs on donor value
– You can afford to invest more when you know donor
value is high
Monitor
Performance

8. Case Study #1

9. Founded in 1985, the PCRM is a
nonprofit organization that:
• promotes preventive medicine
• conducts clinical research
• and encourages higher
standards for ethics and
effectiveness in research

10. Physicians Committee
Development Program
125,000 active donors
Multi-channel campaign includes:
– direct mail
– online marketing
– telemarketing
– events, personal solicitation and planned giving
Program raises $10 million annually

11. Mailed acquisition gets 1% response
with $20 average gift
Animal welfare market fickle – lots of competition
PCRM donors give to 20+ charities!
Historically, PCRM control packages work
for 18-24 months
Constant package testing needed!
Physicians Committee
Acquisition Campaign

12. Rodney Control

13. What We Were
Up Against…

14. PCRM Markets
Animal welfare and protection groups
Advocacy groups
Catalogs

15. Our Strategy
For New Package
Many packages were unattractive and included coins
as incentive to give
Needed to differentiate PCRM from competitors
PCRM donors have historically been averse to
premiums
“No Nickel” strategy played up how PCRM is
different:
Some groups will glue a nickel to their letters to get your
attention. At PCRM, we’d rather USE that nickel to save a dog
like Queenie…

16. “No Coin” Test

17. 1.64% response – 60% higher than the control!
73% increase in gross revenue!
THE RESULTS:

18. Response began to wane after a few campaigns
Aggressive package testing was needed…
But That’s Not The
End of The Story…

19. Incorporates
proven
successful
elements:
– Emotional letter
– Photos on OE
and in letter
– Three petitions
The “Animals Have Feelings
Too” Package

20. “Feelings” package beat the control but not as
dramatically as the coin package
Package costs relatively high
So, we tweak tested to improve response
and lower cost
THE RESULTS:

21. Market responsive to “urgent” campaigns
Campaign created around Alcohol Testing
Lower costs drive lower investment per new donor
“Campaign” offers urgency … package format allows
for new content as needed
And … We Continued to
Package Test

22. The Urgent Package Test

23. Check out your competition
Know your prospects
Make sure your package stands apart

24. Case Study #2

25. The Marine Corps Heritage Foundation preserves
and promotes the history, traditions and culture of
the United States Marine Corps, notably through the
National Museum of the Marine Corps, which
opened in Quantico VA in 2006.

26. MCHF
Development Program
Campaign to build the National Museum of the Marine
Corps was launched in 2000
70,000 active donors
Multi-channel campaign includes:
– direct mail
– online marketing
– telemarketing
– events, personal solicitation and planned giving

27. Acquisition launched in 2000 at net profit
By Museum Opening in 2006, acquisition was at break-even
Today, acquisition gets .8% response with $32 gift – at 50% cost
recovery
Post-opening, case for support shifted to maintaining Museum – a
tougher sell
Starting in 2012, message shifted to expanding the Museum to
tell the story of today’s Marines
Goal is to complete the Museum by 2017
MCHF
Acquisition

28. MCHF label control package has been hard to beat
Tweak tests have evolved package over time – adding
elements to maintain strong response
Difficult to make non-premium package work in this market
Markets include: military, history, subscription and catalog
MCHF has access to a few lists of Marine organizations not
on commercial market
MCHF
Acquisition

29. What We
Were Up
Against…

30. Military history interest
Museums
Veteran related organizations
Catalogs and publications
Memorial groups
Political lists
Models
MCHF Markets

31. First Test Package (2000)
No Premium

32. Winner:
$35
TEST: Initial Ask – $35 vs $50
The $35 ask lifted the response rate 36%
The gift was $53 - lower than with the $50 ask line ($67), but still
quite high
Many more new donors with the $35 ask line

33. Decal boosted response 58%
Gift dropped just 6%
Significantly more new donors
Boost in response more than offsets additional cost of decal
TEST: Adding a “Semper Fi” Decal
Winner:
Decal

34. Labels boosted response 51%
Gift dropped 25%
Still, significantly more
new donors
And still at a positive
net per new donor
($8.55 with labels
vs $10.31 with control)
TEST: Adding Name and Address Labels
Winner:
Labels

35. Screened Marine Corps image on OE boosts response
Revenue up 13%
TEST: Adding a USMC Image on OE
Winner:
Image

36. Post-opening, needed extra incentive for donors to join
Discount offer increased response 28%
Gift only declined 14%
Discount lowered the cost to acquire by 35%
TEST: Discount Membership Rate ($25 v $35)
Winner:
Discount

37. Photo cards lifted
response 18%
Reduced
CTA by 9%
Helps illustrate
need to expand
Museum!
TEST: Adding Photo Cards
Winner:
Photo Cards

38. Lifted response 12%
Lifted gift 22%
Reduced CTA 58%
TEST: Adding New Images to Labels

39. It’s not like we aren’t
TRYING
to beat the labels…

40. Response rate
declined 35%
Average gift
soared 103%
Thanks to
additional revenue,
CTA was comparable
RETEST – the gift was still
higher, but not as dramatic a lift
WINNER: Labels, because
they brought in many more donors
TEST: Poster Package
Poster:
LOST!

41. Response rate
declined 30%
Average gift
increased by 50%
Costs for notecard
package were higher
Despite additional revenue,
CTA was 81% higher with
notecards
WINNER: Labels
TEST: Notecard Package
Notecards:
LOST!

42. Response rate declined 59% without labels
Average gift increased by 57%
CTA was comparable, but many fewer donors acquired
WINNER: Labels
TEST: Member Card Package
Member Card:
LOST!

43. Monitor performance over time
– If you are retaining new donors well and seeing donor value
increase, you can afford to invest more
Map out your testing agenda for the year
– Craft your plan based on concrete goals: increasing response, gift,
retention
– Plan should be adjusted throughout the year
Never stop testing – even when results are great!

44. Thank you
Lisa Maksa, CFRE | Partner | Lautman Maska Neill & Company
with Jennifer Vanderveld and Betsy Wason
Evolution Theory — How Market Impacts
Acquisition Package Testing
www.lautmandc.com | www.PCRM.org | www.marineheritage.org