------------ [ask]
What is a successful response rate for acquisition direct mail appeals, in which you ask strangers for a first gift?
[ ] .125% (for every 800 appeals mailed, you receive one gift)
[ ] .25% (for every 400 appeals mailed, you receive one gift)
[ ] .5% (for every 200 appeals mailed, you receive one gift)
[ ] 1% (for every 100 appeals mailed, you receive one gift)
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Answer: .5% (for every 200 appeals mailed, one check returns)
Notes and assumptions....
Most of us quickly sort our incoming mail into two piles:
(1) Stuff I cannot ignore, or something bad happens to me. (Bills, checks, personal mail.)
(2) Stuff I can safely ignore, and nothing bad happens to me.
Direct mail appeals — i.e., your stuff — land in the second pile automatically. In truth, most of us throw away most of our mail most of the time. How do you succeed at direct mail? Welcome to one of the toughest games on earth.
There is something you can do to tilt the scales a bit in your favor, when you're trying to acquire new donors through the mail: you can give me something like a holy medal or self-sticking return address labels or a pretty calendar.
In direct mail jargon these gifts are called premiums. There are front-end premiums (sent to you with the appeal) and back-end premiums (sent to you after you've made your gift) and all sorts of clever variants. Premiums will be the last man standing in the direct mail industry; when all else fails, premiums will continue to sputter and claim a few gifts per thousand.
Most premiums, of course, are junk you neither want nor need. But they work thanks to the coding in our minds. Premiums activate a mental impulse called reciprocity. It's worth reading the Wikipedia entry; it's a good one and cites the major research. "As a social construct," it says, "reciprocity means that in response to friendly actions, people are frequently much nicer and much more cooperative than predicted by the self-interest model."
In plain terms, when I give you something (a calendar, say), then in turn you are more open to giving me something back, if what I ask for is easy and doesn't cost much.
That's why brand-name acquisition packages which enclose a pretty calendar premium (with cute baby penguins in the Antarctic snow on the cover, for instance) receive average gifts of $15 and such.
But in hardball marketing, you will pay anything to acquire a new customer. And that's exactly what donors are: they are the customers of your fundraising program.
When they make a gift, they are buying from you a role in a wonderful project, a world-changing mission. They are pilgrims, agreeing to march in a campaign under your banner.
Direct mail is a relatively cheap way to make the right offer to the right people at the right time.
And it's physical. And it's a reminder that somebody needs us. An empty mailbox is a lonely mailbox, even if we profess to "hate junk mail."
Notes: my original incorrect math graciously corrected by Adrian Salmon (thanks!)