Once you have decided to move forward with direct mail, the first step is deciding who should receive the outstanding letter you will write. If you’re not convinced yet, go read the first post in this series Why Mail?, and meet us back here.
Mail everyone who has a connection with your organization. If you are new to fundraising, you may not have a huge donor base yet. That’s okay! What other constituencies have shown an interest in your mission? Families who utilize your services? Alumni to your program? Volunteers? Former and current board members? People you met at an event?
Mail all of these people. They aren’t strangers; they are familiar with your organization and your mission, and they will help you build your donor list. An important thing to note here is that mailing these groups assumes you have kept contact information for all of these people. If you haven’t, let’s start there. Download the donor database freebie to use as a basic template for keeping contact information and notes about your groups.
In fundraising, there are two types of lists: the housefile and the prospect list. Current donors are part of the housefile. Everyone else is on the prospect list. According to Data Targeting Solutions, the response rate for a mailing to a housefile is 9%, and the prospect list return was 4.9%. These statistics are the highest rates since 2003. If you are new to direct mail, those numbers may seem like a lot of work for such a low return rate, but direct mail still has the highest return rate of any other medium—five to nine times higher than email and social media alone.
Since you will likely be mailing more prospects than current donors, the ROI will be much lower for the prospect list. This is normal. The goal here is to break even on the prospect mailing. You are telling your story, building awareness of your mission, and communicating the need. Prospects need to hear a consistent message several times before taking action.
The prospects who give in response to your mailing are now on your donor list, growing the housefile. It can cost up to 10 times more to acquire a new donor than to keep an existing one, so once they convert to donors, let’s work hard to keep them coming back to your organization.
Preventing donor attrition is easier said than done. Donor retention rates across the non-profit sector are consistently below 50%. In 2017, the donor retention rate was 45.5%, meaning only 45.5% donors made a repeat gift to an organization. As you mail your lists, keep an eye on who is returning and who isn’t making a repeat gift.
We will talk more about what to mail donors and prospects and how to improve retention rates in the next post.
Need some extra help? Schedule a free 20 minute coaching call to assess your organization’s needs for direct mail.
Donor Retention vs. New Donors: Donor Retention Always Wins
2018 Fundraising Effectiveness Survey Report