Postage Going Up

Postage Going Up

On January 27, first class postage is going up to 55 cents, a 5-cent increase. This is the largest increase in almost 30-years. As this article states: “The Postal Service lost $3.9 billion in 2018, attributing the losses to drops in mail volume and the costs of pensions and health care. It marked the 12th year in a row the agency reported a loss despite growth in package shipping.” $3.9 billion. That’s a big number. To put this in context the USPS lost almost a half million dollars every hour, 24-hours a day. That’s just not sustainable. We have been fortunate in this country to have had such a great postal system. It has been fast, accurate and affordable. Nonprofits have been doubly blessed by the US Postal Services’ postal subsidy for nonprofit organizations. But that is changing before our eyes. Delivery of nonprofit mail is getting slower and slower and impossible to predict. Nonprofit mail is now delivered in batches. That means when your appeal does finally get delivered, it’s hitting your donors’ mailbox at the same time as every other nonprofit’s mail. This fall I received 8 appeals on the same day. So now not only are your appeals unpredictably slow on delivery, they are facing greater competition. I can’t help but think that the nonprofit postal subsidies will likely end soon. Here’s what I recommend while there is still time: Analyze the ROI of your donor segments this fall and test first class postage in top performing segments. With access to reliable nonprofit postage, first class postage is an extravagance. However, you are paying a lot...
Improving the Acquisition Experience

Improving the Acquisition Experience

Allegories for Unintegrated Direct Mail Acquisition Testing Activities: • Tailor fitting a funeral suit • Climbing a tall ladder on a building that’s on fire • Planting orange trees above the freeze line Don’t get me wrong. I love direct mail. But sometimes, context matters. Spending hours and hours coming up with new ideas on how to beat your direct mail acquisition control kit is probably not the best use of your time right now – especially if you aren’t integrating your direct mail with other media campaigns. Realistically, moving your direct mail acquisition response rate from 0.36% to 0.56% isn’t going to solve all your problems. New donor acquisition is a long-term problem, and you need an integrated solution. I suggest, this time, you stick with your tried and true acquisition kit. Reinvest the time and resources you’d otherwise spend in direct mail testing protocols into brainstorming ways to engage a new audience that’s completely different. I know from a career standpoint that seems bold. That everyone knows you can’t get fired for doing the “safe” thing. But as you can tell by looking at our stock market, there are no safe things right now. These new layers to an old problem require innovative solutions. So be bold. Test something that’s never been tried – and then tell us about...
My Fall Mailbox

My Fall Mailbox

Like many of you, my mailbox is stuffed with nonprofit appeals between October 1st and December 31st. Here is a recap of the direct mail I received this year, and the insights I noted: • I received an even 50 pieces of direct mail. Thirty-five pieces were appeals from 11 organizations I have previously supported, while 15 pieces were new donor acquisition kits. • Sadly, direct mail with nonprofit postage arrived all on the same day of the week. It appears that the Post Office holds all of your direct mail and then efficiently bulk delivers it. This is a killer for nonprofit organizations, as their appeal must compete with all the other messages delivered that day. It may be worth testing the use of first-class postage in fourth quarter acquisition next year, to limit direct competition in the same mailbox. • I received the most pieces from The Salvation Army (14) – though half of them were duplicates. I have supported The Army in two different Divisions, both of which sent me identical appeals. I contacted one Division about this issue last year, but the message must not have reached the right people. • I received 7 appeals from my local PBS station. • All the other organizations I have sent money to in the past sent me between 1 and 3 pieces of direct mail – probably reflecting my lapsed status . . . • World Vision sent me the only two catalogs I received. The sole difference between them was the cover. It appears we are in a down cycle for catalogs, as I used to...
Fundraising Trends for 2019

Fundraising Trends for 2019

Last week, Analytical Ones completed its survey of fundraising professionals to gain insights on trends for 2019. Overall, the outlook among fundraising professionals is mixed. As many expect a good year as those who are forecasting it will not be a good year. As one respondent stated, a good year may come down to planning: “Modest growth will come to organizations with strategic fundraising programs.”   When asked about the most important trend in fundraising for 2019, it was unsurprising that the stock market’s recent downturn was top of mind. Half of the respondents identified this as the most important trend for the coming year. The two other second-tier trends mentioned in the survey were: Fundraising Channels, and the Tax Law changes. Here are two of the direct quotes from the fundraising professionals who took the survey: “A global recession could cause a significant impact on giving.” “Whether people will begin to bundle donations and not give every year, but change to another giving pattern.”   External forces lead the responses when participants were asked about their biggest concern for the coming year. In short, fundraising professionals have many concerns right now. We all know in times of uncertainty, donors tend to give less. Let’s hope our panel is wrong, but the general consensus is that it may be a bumpy...
The Exponential Importance of Second Gift Timing

The Exponential Importance of Second Gift Timing

Check this out! This graph shows the the five-year value of a donor based on how quickly an organization converts a new donor into a second gift donor. The correlation is astounding. New donors that give a second gift within the first 3-months have LTVs nearly twice as high as those who give at the 12-month mark. This demonstrates that it is worthwhile to spend money cultivating a second gift early in your relationship with a new donor. What’s also surprising is the value of donors who convert 13-24 months after their initial gift. This is encouraging. Don’t give up on a new donor than didn’t convert in their first year. However, less surprising, new donors who wait 25+ months to convert have much lower LTV rates. All this indicates the need to have strategies in place encouraging the second gift ASAP for your newest...