direct mail, Economics, Fundraising, Marketing, USPS

The Mysterious Cost To Raise A Dollar

The tiny silver disc leapt from the shelf.

The convolution of three events today raised my antenna that there is a superior organizing force out there that is directing our path as we hurtle through space.

As I was cleaning off our bookshelf, a small battery dropped to the desk. These are the tiny nickel-cadmium dots that we find in cameras and calculators. Not the larger lithium incendiary bombs that we have in our laptops and hover boards.

The calculator that failed to light up.

The battery was all that was left of a calculator I tried to resuscitate a few months ago. When the machine didn’t light up, I undid about 9 tiny screws to retrieve the battery. As I popped off the back, the entire calculator sprung into a hundred pieces of keys, buttons and circuit board. Incalculable. I saved the battery to take into the hardware store for a replacement, just in case the calculator could be reassembled.

The next thing that happened was while emptying out the washing machine, we discovered that I had left my Moleskine diary in my shirt pocket. We retrieved the diary cover, very soggy, and found the rest of its contents spread like a million flakes of oatmeal over all our clothes. So much for keeping notes on paper.

A misadventure, attempting to extract the battery for replacement.

As the morning progressed, Lonny the mailman came by, and stuffed our mailbox with lots of missives from people we don’t know, but asking for money. The largest piece in the delivery was a giant, lumpy, shiny, pebbled envelope from Disabled Veterans National Foundation.

The DVNF package was an exceptional “Flat”: 12″ x 15″. So huge that all the other mail was folded in with it.

In direct mail, size counts. So I opened it immediately to find, mirabile dictu––another calculator! And—- another diary! Wow. I am completed.

The Mystery of Fundraising By Mail

After admitting that the USPS may be a supernatural force, most would ponder the imponderable: how does DVNF get away with sending out calculators, books and notepads, and expect to earn any money for their cause?

A “max flat” the 12 x 15 kit is shiny, pebbled and lumpy. It was folded to fit the mailbox.

That, dear reader, is one of the great mysteries of direct mail fundraising, and one that I will unravel for you now. All you need to know is what the package really costs, response rate and average dollar gift amount.

To calculate the cost, I first took the kit down to the USPS post office for an official weighing. Ranjit asked with a jaded smile on his face, “Why? Do you intend to sue them?”

“No. I want to calculate their postage, and how much this whole thing cost in the mail.”

Ranjit replied, “It’s non-profit, but don’t kid yourself, they are making money.”

I pulled out the new calculator and said, “Look at this! That’s gotta cost a buck anyway…”

Ranjit smirked, “Nope. Twenty cents. About $2 dollars a pound. It’s from China.” We weighed it: 3.3 ounces. “That works out to 40 cents, ” I figured. Ranjit countered, “OK so maybe $1 dollar a pound, that’s 20 cents.”

A new pocket diary, calculator, memo pad and pen, all personalized.

I stared at him as I pondered that number. At the same time Ranjit extended his arm across the counter to flash a beautiful bejeweled wristwatch, sparkling in buttons, numbers, dials, and a bright yellow face. “How much do you think this cost?” He smiled.

“Uh, I don’t know. Ten bucks? A nickel? 79 cents?”

“Close. It cost me $2 dollars. Made in China. I bought 5 for $10 bucks, each a different color, for every day at work.”

Smitten with this new-found knowledge of international commerce, I bid him a good day and took my 20-cent calculator back to the car.

The whole mail kit, which included the calculator, the notebook, DVNF pen and some letters and envelopes weighed 9.1 ounces. According to the USPS, this Flat was part of a 3-digit automation scheme, so I estimate the non-profit postage was about $0.59 a piece.

This pocket diary replaced the soggy Moleskine in a nick of time.

The envelope was made in China, as was the notebook. Without asking, one can only guess that the components all assembled, shipping included, must have cost around $2 dollars. Add another 50 cents for the 5-way match on name (envelope, calculator, notebook, donor form and notepad) and you have a kit that surely cost over $3 dollars to put in the mail.

And Now, Using The New Calculator:

That’s $3,000/m for you printers out there keeping score.

The donor form offers a $2.50 check as a tempting diversion. But they want $15-$25. Go figure.

When most mail kits ring in around $0.35 cents each, $3 dollars is a hefty challenge. In their calculations DVNF finds a breakeven point by dividing the total cost of the kit by the average gift amount. Looking at their donor card, they suggest a gift of $15-$25. Taking the lower end, their breakeven response is $3/$15 = 20% response. At the higher end, 12% response.

12% – 20% response is a steep hill. This particular charity is known for its high fundraising costs. According to Charity Navigator their fundraising efficiency is $0.71. That means for every dollar raised, they spent 71 cents.

For this package, that translates to $3/.71 = $4.23 raised for every piece mailed.

If their average gift is $15, then their response rate would be $4.23/$15 = 28.2%.

And at $25, the response is 16.9%.

There’s no way to be certain, and DVNF is unlikely to share their response results. But the package itself is a donor acquisition kit. That is, a high pressure sales pitch to get a new donor. If indeed it did generate a 28.2% response rate, with a gift of $15, the cost per new donor is: ($4.23-$3.00)/28.2% = $4.36, which is pretty darn good, if not downright incredible.

It also follows that every new donor will be repeatedly contacted for further donations, which over time, leads to a real surplus, destined for program expenses that support the disabled veterans.

Thanks for grinding through these numbers with me! Please note that Disabled Veterans National Foundation should not be confused with Disabled American Veterans.

direct mail, Fundraising, Marketing, Media

Battles In The Mailbox

The Memorial Day rush begins.

There is an ongoing, armed conquest being waged in our mailbox.

Whether it was my donation to a certain political party that flagged my name, or perhaps a popular consumer magazine subscription, the ensuing barrage of fundraising mail from veterans’ associations is non-stop in our mailbox.

Regardless, the creative pitches are stunners, and deserve a closer look. You are hereby invited to read my mail!

Most of these charities are profiled and rated on Charity Navigator.org, which strips away the emotion to detail actual performance against their stated missions.

Turnkey Office

As big as a door mat, and packed, too.

The Disabled Veterans National Foundation takes overwhelming force to a new level with their glossy, Flat-sized embossed package. Despite the red-stenciled “DO NOT FOLD” our faithful USPS carrier did just that to get it in the mailbox. It measures 12 x 15, and according to the weigh scales at our grocer’s fish counter, weighs 13.4 ounces. If that seems heavy to you, perhaps we have been paying too much for our halibut.

The field ready office with solar powered personalized calculator and stationery.

Inside this doormat-sized kit is a desk pad, calculator, calendar book and ball point pen. Along with this prefab office kit is a $2.50 check drawn on a Bank of America account. Surely a mistake, it is signed, dated and made out to me. In the enclosed letter, the writer, smitten with remorse, asks me to return the check.

Check mailings are iffy because in many cases the marketer needs to have funds held in escrow to honor the checks if, fates forbid, the recipients decide to take the money.

“Made in China”–The disturbing bug that must be shown.

This kit ain’t cheap. Postage alone is nearly a dollar, and considering the hand-applied “Philip Brown” label on the calculator, plus its die-cut and tensor-ribboned place mat, the overall cost has to be at least $4-$5 dollars each.

Which may explain why the kit was made in China– not an encouraging signal for U.S Veterans. I wait to see if they will send me a typewriter next year.

Parade-Ready Flag

Steel plate reveal: your own desk ready Stars & Stripes.

Wounded Warrior Project also approached us with a package, a 5 x 10 windowed boxlet displaying a real flag inside. This Army-green imitation steel-plated ammo box is nearly half an inch thick, so it’s non-automation all the way..40-45 cents to mail. The flag is intricately folded into a die-cut foam holder that also holds the addressed donor form, a hand-assembled product for sure… which explains again, why it was made in China. In the mail, $1-$1.50 each.

We’ll talk about cost/response in a minute.

Photo Wallet

A photo wallet… a hard to discard gift.

Wounded Warrior Project also sent along a separate request which included a 4×6, 20-page photo wallet. Inside a regular 6 x 9 envelope, this gift actually made immediate sense, and the wallet now holds images of our ridiculously brilliant, and beautiful grandchildren. Not being one to take anything for granted, we will reward WWP for the effort. Still, with postage, in-the-mail cost is 40-50 cents each.

Calling Cards

Ersatz calling cards stuck in place to get the letter opened.

Help Our Wounded, and Armed Forces Aid Campaign have learned how to affix 3 plastic phone cards to a page. Technologically, this is pretty cool, if not done by hand. The cards are stuck on top of each other and appear jumbled through the large glassine window….as if they were thrown in quickly, sealed and run off to catch the 3 o’clock mail. The impact, especially for the uninitiated such as me, is strong. Their job is to get the envelope opened, and indeed, the ploy works. Help Our Wounded, aka Healing American Heroes is not found on Charity Navigator. My bet is the mailing costs 50-60 cents all-in.

Going For Our Stronger Feminine Side

A pretty package with writing in mind. This one’s for Gramma.

Disabled American Veterans is the senior classman in veteran’s charities. Despite that, they have assigned a female status to my record, so I receive kits that reflect more genteel tastes than one might expect. Putting the gender bias aside, especially in North Carolina, this kit is in keeping with DAV’s efforts to send along quality gifts.

I can’t use any of this one, which is resplendent in lavender-hued Forget Me Nots. Still, if I was desperate, making a struggling attempt to write to my passed on mother, or to scratch out a hasty last will and testament, I have notepad, and mauve colored, simulated vellum sheets for assigning my debts to chosen in-laws.

The kit is tasteful, if gender specific, and is certainly an eye opener. DAV also uses real stamps on the reply envelope. While the accountants may come unhinged at this largesse, DAV’s frequent use of the costly stamps is proof that the presumptuous gesture works in bringing in more donations.

One wonders how many codgers will steam off the stamps, versus cross out DAV’s return address and use the envelope to pay their water bill instead.

All in, this piece must tip the scales at $2.00 in the mail. But it works.

Subtle and Cautious

Creative use of stamps–just enough to impress, but maybe a challenge for the USPS accountants.

The USO is the most conservative kit to ask us for a donation, and that is in return for a genuine Stars & Stripes Flag plus good feelings. I included this under-played kit because of their creative use of postage.

Non-profit letters get a privileged postal rate, somewhere between 8-18 cents depending upon address density and automation compatibility. USO chose to affix 5-cents worth of stamps to their outer envelope, and to use their postmark (#440) to make up the difference at the counter.

Their reply envelope reveals their cautionary approach to wasting postage money. Rather than place the full 49 cents on the envelope, like DAV, they are willing to go for 5 cents, but left the Business Reply Mail (bill us) indicia in the corner.

We guess that this itsy-bitsy effort will drive the postal accountants nuts.

In the mail cost: 40 cents, tops.

Drop Another Nickel

Just when you thought the nickel was yours, they want it back.

Paralyzed Veterans of America is one of several charities which has a conveyor belt from the US Mint to their mail room wherein millions of shiny new nickels are deposited on glossy label stock letters.

Just yesterday we discussed at lunch how many of us keep the nickel, which after all, adds up when everyone is mailing them, March Of Dimes excluded.

PVA’s piece is a max-sized letter, 5 x 11-1/2. This is a smart move because the postage is the same large or small, so you might as well get the most paper into the package that you can for the same price. However, nickel-enhanced gold foil labels are heavy, so the rule is to keep below 3.3 ounces or the rate goes through the roof. $1.25-$1.50 in the mail.

Did You Get Our Card?

Flowers, fuzzy puppies and kind sentiments… a happy birthday for some one.

The Veterans of Foreign Wars by comparison uses a tiny 3-3/4 x 7-1/2 envelope, aka a “Monarch” to ask the nagging question, “Did your special edition birthday cards arrive?” Somewhat reminiscent of the neighbor’s kid who knocks on our door to sell Christmas wrap. We still have six rolls from last year.

Well, yes, the cards did arrive. I am sorry, but so far I have not found a suitable target for them which are best described as lovely and softly sweet. My Mom might have liked one, but not from me. Again, these are estrogen-energized, and if I get my hands on the person who tagged me as female, I am going to scratch their eyes out.

A simple little kit, probably 40-cents in the mail, at most.

How Do They Make Any Money?

As you can see, these kits range in cost from 40 cents to perhaps $5 each all-in. Can a non-profit actually make a profit from these mailings? Check the Charity Navigator for details. You will be enlightened.

But realistically, the acquisition of a brand new donor will always be at a loss. The strategy is to keep that donor giving for a long time afterwards, hopefully with a final bequest of planned gift when they pass on.

“How the @#$%^%$$ will we ever make this work?”

For the accountancy gene in you however, rest assured that every fundraiser has a donor acquisition cost they won’t exceed. This is the anchor point in a campaign. To respect that restriction, a good forecast on the cost of a response is to divide the piece-cost by the expected response rate.

For instance, a piece costs $2.00 in the mail. This is big money, and the accountants are squirming in their chairs. But the marketing folks believe the kit will get a 7% response.

$2.00/7% = $28.57 cost per response.

If the charity can show that a new donor at that cost will stick around on average for 5 years and return $150.00 in donations, then that is a reasonable investment.

Meantime…

We are digging in for more incoming mail. Hopefully without flowers.

Thanks for reading! We do support our Vets and and respect all that they do. If you are inclined to donate to a cause, check out their website for a financial report, or visit Charity Navigator.

direct mail, Marketing

Your First Impression Won’t Be Your Last

St. Joseph’s Indian School delivers the piece de resistance.

You know it’s Fall when the big fundraising kits stuff your mailbox. This year we have a surfeit of gifts from direct mail fundraisers.

Father Flanagan’s Boystown stickers for identifying anything that moves.

Years ago the pioneers in the business presented us with address stickers.

These we have dutifully paid for and have now labeled every moveable item in our home: CDs, iPads, iPods, iPhones, chargers, golf clubs, cassettes, Walkmen, books, staplers, rulers, vinyl… luckily we don’t own a pet.

The ante was raised by the March Of Dimes who gratuitously presented us with a small monthly stipend of ten cents: a shiny new dime pasted to a donor form.

Food For The Poor’s coins… how can you just pocket them?

That munificence has been outpaced by Food For The Poor who made change for the dime, and sends us a penny and a shiny new Jefferson nickel. That’s a 40% cutback, but insertion is more costly, so it’s a wash.

Not to be outdone, Disabled American Vets provides a 9×12 calendar, which we can place beside the 10×20 calendar from Boys Town.

Of course, wall calendars are bulky, so we are grateful to St. Joseph’s Indian School which gave us a 4×6 calendar booklet for the purse. I am waiting for the 3×5 that fits in my shirt pocket.

There’s no excuse for not writing….here’s a VFW pen.

The mailing industry is of a generous culture though. With all these other possessions, we have also received dozens of greeting cards: whole writing kits, with pens, to reach out and greet someone– anyone.

Oblate Missions has sent us so many Christmas cards it may be easier if we send them our Christmas mailing list instead.

Catholic Relief Services’ prayer medallions.

You can’t blame an organization which does its part in reinforcing the goodwill that blossoms from receiving a greeting card in the mail. I am all for it.

As a sidenote, the USPS post office in Libertyville has a well designed rack of greeting cards for sale.

This one cartoon I loved for its text:

Outer Cover: “Wow! You got a real, honest-to-goodness card! Not a text. Not an email!”
Inside Caption: “Wow! It has an inside too! It just gets better and better!”

In one of their early bold moves, Disabled American Veterans pasted 45 cents in stamps onto their reply envelopes. Overflowing in confidence that once we saw the postage in place, we would feel obligated to fill the envelope.

Marines Toys For Tots and Wounded Warriors provide your stamps.

Even gutsier, Wounded Warrior Project and Marine Toys For Tots are paper clipping custom 47-cent stamps to their letters. This is very expensive, as Stamps.com provides these stamps at a hefty premium.

The strategy works though. Can one really use the stamp for anything other than a gift without a stab of guilt?

To avoid being pressed into service, British sailors eyed their brew from the bottom up.

The gifting brings to mind the old conscription practices of the 1700’s when British sailors were pressed into service when they drank from a tankard of ale, only to find the King’s shilling in the bottom. By unwittingly enjoying the beverage, the sailor had been hired.

I think of that clever ploy as I pile up the loot, especially the coins and stamps.

The mailers know what they are doing. Despite all common sense, they have proven that the unsolicited gift still wrests outlandish response rates and donations. And once you are hooked, they will be back until they end up in your Will.

That’s right. Planned Giving is a part of every established fundraising strategy, and if you asked, many organizations can tell you which of their huge bequests started with a direct mail gift, years before.

Fleece gloves… probably a postal nightmare, but still handy.

This season’s most impressive packages included one from Kids Wish Network, which sent along a pair of fleece gloves. They arrived in a lumpy wrinkled paper envelope I am sure that the post office would rate as “baggage class”.

But how do you throw those out? What tight fisted non-donor could wear them, especially when the writer suggests: “When you use the deluxe fleece gloves I sent you, I hope you you’ll remember Wish Kids like Tabitha…” .

The penultimate delivery however, the cream of the crop, the ne plus ultra, is the bulging envelope from St. Joseph’s Indian School. No doubt USPS rated this one as “duffel bag class”. Inside we found the usual and generous complement of address labels, gift stickers, 4×5 note pad, 5×7 note pad, pocket calendar, wall calendar, personalized calendar card, and 3 shrink wrapped greeting cards.

St. Joe’s mystical Dream Catcher, not to be ignored.

In addition however there was a most unique and unusual item, a genuine facsimile of a Lakota Indian Dream Catcher.

The Dream Catcher is a little hand-made assembly of string net, naugahide, beads and feathers. Mounted on die-cut foam core, it is shrink wrapped with colorful operating instructions ending with: “to be hung on the tipi or lodge and on a baby’s cradle board”.

I have to admit, I had to dig through pounds of newspapers and old phone bills to retrieve this package from our recycling bin. There is something especially foreboding about disposing of the St. Joseph’s piece so casually.

The Marines Toys For Tots medallion, struck with the USMC shield and Semper Fidelis on the other side.

Yes, in the past, I have taken all the coins, scribbled on lots of notepads, hung countless calendars, and stuck hundreds of stickers without a moment’s guilt, or nearly so, but the Dream Catcher had me netted and nettled. This one item–which I would never purchase on a dare–clinched the deal. Just how unlucky could my life turn out if I didn’t give due respect?

So it’s hanging over my DAV Certificate of Merit.

Thanks for reading! I hope you find your charity of choice this season. These organizations are especially effective, and they mind their pennies too.

direct mail, Economics

All That Glitters

The solid gold gift pack. Gotta open it.

Our mailbox opened this morning to present a gorgeous golden Flat from Veterans of Foreign Wars.

It is highly improbable that the recipient of this gilded kit would toss it in the bin without at least checking to see if there was a $10 dollar bill waiting inside, too.

Just might have been too, considering the total payload we discovered:
-12 Christmas cards and envelopes

12 Christmas cards and envelopes, a big offering.

-1 gift bag

-1 pen

-1 calendar card

-1 set of gift & address labels

Of course, there was also a letter/donor form and BRE.

But two unusual items cropped up.

The gift bag, big enough for a ham sandwich.

First, the headline alerted us: WOUNDED VETERANS ARE IN CRISIS.

If you are at all disposed to the plight of these warriors, as countless Americans are, you are going to open this labeled treasure chest to see what the crisis is. Foreclosure on the home? Withdrawal of benefits? Family disintegration? What is the crisis?

Crisis: a powerful set up.

Inside, the letter launches in to a completely different train of thought: “When we began sending out these free special edition Christmas cards and other gifts, people said we were crazy.” Only three paragraphs later do they mention the main focus of their cause: the wounded Veteran.

The non sequitur: handwringing debate about cards.

While this may seem nitpicking, the golden rule of good headlining is to pay it off. VFW brings the reader to the edge of their seat, and then chats away on the frivolity of costly free gifts. Crisis takes a back seat.

The second wrinkle is more about economics, and a good lesson is taught here. This 6.8-ounce kit probably cost $2-$4 dollars each, all in. Conventional marketers would roll up their eyes, cross themselves and close the garage door before spending that kind of money, especially when the response might not break 5%.

Labels and stickers, a fitting complement.

But what if it does? The real question is, what’s the average gift, and how long before it pays itself off?

So assume for a moment this scenario:

Mailed 10,000 at a cost of $40,000. 700 donors, at a cost of $57.14 each. Response, 7%. $17,500 in gifts. Average gift, $25.

Cello-wrapped pen.. not since Time magazine!

What does VFW have? 700 new donors at a net cost of $32.14 each. What are the odds that over the next five years, the group will turn in another $100,000 through renewal mailings, bequests and planned giving? Pretty good, actually.

This compliant disclosure gives pause to the reader.

It’s all speculation, of course. For some background on VFW’s fundraising success, check their website for its latest financials. Total gifts, $66.8 million, fundraising expenses, $25.6 million. Roughly 2.6/1. By comparison, its major competitors turn in gift/fundraising ratios of 3:1 up to 7:1.

The challenge is knowing in advance what the numbers can, and need to be. Here is a formula worth knowing–witnessed by a fly on the wall of VFW, where for a fictional moment, you are now working.

Budgeted Cost per Piece

Your boss went sideways over the cost of the Gold Lame’ package. Piqued, she said the gross cost per response can’t exceed $32.14. You blurt out,

“But that’s the net cost on our Vanilla kit. Gimme a break.”

“Give you a break? I have to explain this gold cadillac to the board. If it doesn’t beat Vanilla, I will be back in community service, and you will be on the phones while you are licking envelopes. Got it?”

Gifts up to $500. If you don’t ask…

So you have a ceiling: the cost per response must not exceed $32.14. Historically, you have generated a 3% response on the Vanilla conventional mailing format. The all-in cost of the Gold Lame’ must not exceed $32.14 times 3% = $0.964 each.

Impossible. The vendor stares through you with crocodile eyes. Three bucks without postage, he grins.

But you feel strongly about Gold Lame’. Your all-in piece cost totals $3.75. Divided by the boss’s ultimatum, $32.14, you need 11.67% response. Phew.

At this point, you wake from this disturbing nightmare. Will Gold Lame’ quadruple Vanilla response? We may not know, but at least you know the formula to weigh the risk.

Remember: ($ piece cost) / ($ response cost) = % response

Now, back to our piece.

Fix the headline to set up the letter, or change the letter to pay off the headline.
A bold choice of cards: an unabashedly Christmas theme. Just make sure your list is of that persuasion.
The donor form offers 8 gift choices, from $10 – $500. Good!
Lastly, the prepaid BRE is worth it. Whole campaigns can falter for want of a postage stamp.
Mail it. Whatever the response, whatever the gift, if you don’t test, you will never know.

Lastly, find a good quote to share with your boss, something like Teddy Roosevelt’s, “better to have failed while daring greatly than to live with those cold and timid souls who have neither known victory nor defeat.”

A little wordy, but it may work.

direct mail, Marketing

How To Make Your Mail Indispensable

Direct mail: hard to pitch!

One of the key benefits of hard copy mail is it is harder to throw away. Unlike emails.

So with this thought in mind, take a look at how these marketers deliver the message that can’t be ignored.

Father Flanagan sends 7 cards & envelopes to write and mail.

Father Flanagan’s Boystown is doubling down on their request at our household after they received a modest donation last fall.

This lumpy package delivered 2 notepads, 7 greeting cards, 1 novelty gift bag, and best of all, just like the old Time Life subscription offers, a ball point pen!

Stickers, note pads & gift bag, maybe a little pretty for some crowds, but still…

Not surprisingly, they are asking a minimum of $20 for a gift, which is pretty much what they got last time.

Wounded Warrior Project is much simpler in their acquisition package, merely asking for a first time gift of $10.

It is a real stamp, and let’s remind you.. Federal property!

What is nagging in this kit is their gift of one Purple Heart postage stamp.

Paper-clipped to show through the double window, it is impossible to throw away. But could you use it without sending back a donation?

March of Dimes seems just like that!

The March of Dimes continues its efforts with the symbolic gift of a dime. Pocket the money and start the car? Probably not.

Lastly, and possibly the most insistent in a subtle way is the Catholic Relief Services which have enclosed a quarter-sized brass plated Guardian Angel coin. Unlikely that many will show up in a vending machine any time soon.

What fates are you tempting by pocketing this coin, gratis?

Generally, the public, and more specifically, the digerati generation snicker at direct mail as a past art. Something to view under glass. These marketers can tell you otherwise, and to that end enjoy their day in your mail box.

The driving force in each of these packages is an indispensable gift. It trades on these principles:

1. What will you give in return?

2. You have a branded token to remind you.

“Here, use my pen, please!”

3. You can’t use the gift without breaking a trust.

And for the stingiest curmudgeon, the hardest rogue, the admission: “AAARRRGGHH, I can’t throw the D$$%^^## thing out!

And therein is the value of direct mail.

direct mail, Economics, Marketing

How You Make Personalization Pay Off

A 24-page color calendar, replete with country roads, cabins, barns, flowers and birds…lots of birds.

Personalizing a mail piece comes with expense. You are about to see the motherlode.

Gracing the letter with the reader’s name is one thing, but it’s quite another to match that to the envelope. For the fully committed direct marketer, there are personalization payoffs, and Father Flanagan’s Boystown shows us how.

An outer envelope promising lots, and delivering, too.

January.. from the 36-pager booklet, with more birds…growing in numbers.

Just before Christmas we received a 9 x 12 envelope from Boystown announcing their 2015 appeal. The donor acquisition kit weighs about a third of a pound, which is huge. The outer envelope calls out, by name, that FREE Special Edition Gifts are enclosed.

“Free Gifts” is right. They send three calendars: a 24-page hanger for the wall, a 36-page purse calendar booklet, and an 8-1/4 x 10-3/4 calendar card.

The color label sheet. High quality and keepable.

The whole collection is covered in Sam Timm nostalgia art: winter ponds, chimneyed log cabins, old trucks, old boats, old canoes and birds…. enough birds to awaken Alfred Hitchcock one last time.

Another calendar, this one with a stylized street sign.

But the overwhelming effect comes from the personalization. Father Flanagan has managed to personalize 8 pieces in this whopper kit: the envelope, the letter, the reply form, the reply envelope, two sets of very nice address labels, a certificate and a calendar card.

It’s only an acknowledgement, but hey, it’s framable.

Over the top maybe?

A Johnson Box, personalized and tinted, captures the gist.

Not really. Remember, good direct mail is designed to be indispensable. It is extremely difficult to throw out a kit when your name is woven into its making so admirably. The proof: this is a control package, or very similar to past controls. So it is working.

What’s the math that supports this?

The kit itself probably cost around $1.80. Postage for a 6-ounce Flat at non profit rates is actually a bargain, add another 30-cents. Total cost in the mail, probably $2.25 after adding list and processing. This is a guess, only, having not spoken directly with Boystown.

Individualized gift certificates, one of three.

Now, the hard part: getting paid. Assume the average gift is $15. To break even, we need a 15.0% response. ($2.25 divided by $15.00 = 15.0%)

And the really hard part: they probably won’t get 15.0% response. More likely, they might achieve 8-10%. Let’s say 10%. So given that, every response came at a cost of $22.50 ($2.25 divided by 10% = $22.50).

A strategic gift choice, Goldilocks-style. Let’s go for $15.00!

Is a new donor worth $22.50? The answer is, “yes”!

By Father Flanagan’s 2012 financial report, they derived nearly $5 for every dollar spent in fundraising. A very acceptable payback according to industry standards. By the numbers above, the new donor will continue to give over time, well in excess of $113.00.

A set of stylish B&W labels in case I don’t want to give away the birds.

Personalized donor form and reply envelope. Note the QR code for tracking!

Again, this analysis is my perspective only, but a donor will continue to give to a worthy cause, especially one as well branded as Boystown. And not only will they give today, but some will most assuredly make bequests after passing to keep the institution providing its valuable service.

So personalization plays a big part in winning support, and the savvy marketers at Boystown have done their jobs well in making it pay for their cause.

Thanks for hanging in to read all those numbers! FYI, Boystown provided nearly $192 million in services in 2012, and in 2013, served 122,000 children and families across America.

direct mail, Marketing

Pretty Ain’t Pretty Sometimes

A 2-page high color sell sheet, but no letter!

When you are on the marketing end, you may feel that direct mail, especially fundraisers and business mail, looks pretty vanilla. Maybe even bland.

So the urge is to pretty it up.

The hospital’s familiar happy logo is disguised here, but this envelope brings no bad news.

That is the case with this fundraising piece for a well known children’s hospital. For its sake, anonymity will prevail. But here is a 7-step rule book on designing fundraising mail.

1. Set the mood for urgent need.

A snappy colorful tease, but is it urgent?

To that end, use color and graphics sparingly, to best create a tone that delivers gravity, not levity. The envelope for this kit displays a cheery logo (disguised here) for the hospital. Understandably, it wants to convey happiness for its patients. But that’s not the right strategy for getting financial backing.

The OE features a spunky new pair of pink sneakers teasing the story of a cured patient, whose story is inside.

The “story inside” teaser is good. But the sneakers remind one of a Saturday morning kids TV show. Pretty, but not important.

2. Follow up with a personal request.

One of the most recognized personal media in existence is the letter. When we open an envelope, we are looking for it. The letter sets the agenda for the potential donor. This is who we are. Here’s our challenge, and how you can help.

There is a myth that people no longer read letters, and certainly not long ones. Not true! If your story is real, and the request is sincere, the letter will be read.

A potentially compelling story is delivered in challenging, small white type against a pink background.

Named, titled and signed, the letter provides basic credentials. A person is “at the other end of the mail box”.

This piece has no letter, but rather hangs its success on a two-page high color sell sheet.

3. Demonstrate and prove the wise use of donations to solve the problem.

Convince the donor that money is needed, and that it won’t be wasted.

The hospital has a goal of $135,000. What for? It is not apparent that it is short of funds, or solely supported by charitable donations. Not knowing that, why would a donor be moved to give?

A logical effort to monetize the services provided. But what are the Circles all about?

To its credit, the hospital does explain what your money will buy. It also presents operating statistics, and some official endorsements.

To put an edge on the numbers, show how many cases were turned away or disadvantaged for lack of funds.

4. Be legible and understandable.

Possibly the most difficult task of a senior donor is to read copy that is too small, and reversed out. In this case, important “ask copy” and narrative is in 8-point type, white on pink. Pink on black. Blue on white. Ouch!

The significance of the “Secret Guide” is just that: secret.

This piece also employs some secret code, uninterpretable by the cold prospect. The use of their “key” logo is un-explained, and a series of icons on the pledge card do not telegraph any meaning to the uninitiated.

5. Tie the Ask To A Specific Need.

The story in the piece relates to a child’s full recovery after an accident. The pledge card, and supporting copy don’t connect to the child’s need, or to the next child with a similar accident.

The list of financial values and associated services in the ad piece refer to Circles of Commitment and generous benefactors, but the recognition value of the Circles is not explained.

6. Urgency.

Any mailing’s strategy is aimed to get a response immediately. This fundraising piece needs some parameters to define the timely need for a donation. What will happen if they don’t reach $135,000? When will time run out?

7. Indispensability.

The mystery of the icons: how do they work?

The best direct mail is impossible to throw out. It just sits there on the kitchen table, or on the dresser until the responder finally acts. This piece lacks that important nagging factor.

A gift, a freemium, a stamp, a coin, a sample, a personalized card, a photograph, an address label set, are examples of items that are hard to ignore.

Unless the donor had already decided to contact the hospital, or the donor’s accountant recommended more charitable giving, there’s no reason to hang onto this piece.

$50 bucks? We haven’t even met!

Direct mail design is challenging because the mailer gets bored with the “same-old, same-old”. There is a temptation to jazz up the piece just to be different. After all, you mail out a few thousand, or a few million, and they all look the same!

Just remember: the recipient only gets one piece, and to that person, the piece is well distinguished, just by its mere arrival.

Thanks for reading! If your fundraising program is serious, make it look that way. There’s nothing more serious than asking for money.

direct mail, Marketing

DAV Makes The Numbers

I just received a mailing from the Disabled American Veterans, whose organization I frequently support.

DAV’s Mailing to Past Donors

The mailing piece is illustrative of the investment DAV makes to raise money for their many services provided to America’s injured war vets. If you have never received a DAV piece, you have not seen the abundance of gift stuff frequently mailed to potential as well as loyal donors: greeting card sets, bookmarks, calendars, and beautifully crafted address labels. There’s nothing “junky” about a DAV appeal letter.

46 cents postage, courtesy of DAV

What struck me about this recent letter was the inclusion of a reply envelope which was already paid with 46-cents of stamps.

Claiming austerity, most fundraisers ask you to provide your own postage. Instead, DAV pays the bill. Does it seem contradictory to you? Or does it make perfect sense? My guess is that providing the postage is a tactic to increase response, not necessarily the gift amount. In other words, if a donor normally gives $10, the prepaid return postage tactic doesn’t get more dollars per donor, but it gets more donors: those folks who won’t allow 46 cents to go to waste. And it’s unlikely many stamps get steamed off.

But here is where it gets interesting: what direct mail manager is willing to put their job on the line by suggesting they add 46 cents to the cost of every fundraising letter they send out the door. “Are you nuts, or just plain stupid??” suggests their boss, popping TUMS once a minute.

“Riskophilic” may be the proper term. Daring. Or canny. A little bit of math may reveal the truth.

You can look at DAV’s 2012 annual report which shows some numbers worth bragging about. They earned $97 million in direct mail donations at a cost of $32 million. Basically, for every dollar spent in direct mail they received 3 dollars in return. The 3:1 ratio is pretty consistent every year, and by the way, their fundraising cost is only 19% of all their expenses, which is quite acceptable.

Anyway. The letter I received had 5 Christmas cards and envelopes, a disclosure sheet, a letter, outer envelope and reply envelope. With outgoing postage, I figure the kit was worth 75 cents in the mail. $750/m. Add an additional 46 cents, and you are at $1.21 for one piece of mail. Multiply that by 100,000 and you have college tuition at Northwestern.

However: increase your cost by 60% and you need to increase revenues by 60%, to keep that 3:1 ratio. Sounds challenging? Just about miraculous is how I would define it. You don’t get swings like that. But the beauty of direct mail is that you can test it both ways, with and without the extra stamps. Clearly, the test proved positive, in a good way, so the DAV is keeping the USPS afloat while making money for its vets.

There’s more at work though. That crazy manager also has another equation in his or her head. It answers the question: how much revenue with every piece mailed? If each piece costs $1.21, then each piece must earn $3.63 in donations. 3:1, right? But only if DAV gets 100% of the people to respond. What if only 15% of the people respond? Then a $3.63 donation won’t cover the ratio. Now the gift changes, and here’s the revealing equation: $3.63 divided by 15% response. $3.63/15% = $24.20. The average donation must be $24.20.

The “ask” starts at $7.00.

Hmmm. Look at the donation form on the letter. DAV is asking for “$7… $10… $15… or more”. Whoa! What if everyone just gives $7 dollars? Well, again, this is what gets tested, and DAV is pretty confident that a $7 gift is acceptable. My hunch is that if each gift is at least $7.00, DAV just about breaks even. How’s that figured? Well, divide the piece cost by 15% response. $1.21/15% = $8.07 average gift required to break even. $7.00 is close.

Fortunately, my bet is that people give a lot more. Without having any direct knowledge of DAV’s results, I can only guess that the scenario is something like what I have described. And if it is anywhere close, DAV has some very good writers, and some very generous donors. And some very deserving vets.

A salute to all of them!

Phil Brown

"Like triple cream– rich, pungent, a little barnyardy, and spreads easily. A good cheese."

Tag Archives: Fundraising

The Mysterious Cost To Raise A Dollar

Battles In The Mailbox

Your First Impression Won’t Be Your Last

All That Glitters

How To Make Your Mail Indispensable

How You Make Personalization Pay Off

Pretty Ain’t Pretty Sometimes

DAV Makes The Numbers

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