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The Math Behind not Segmenting or Personalizing Direct Mail

December 23rd, 2015 Posted in Direct Mail, Fundraising

Dear Current Reader,

Sounds very inspiring doesn’t it. In fact, the research at Haines-Direct would show that personalization increases direct mail response rates by up to 10%. So instead of getting 50 people to read this article, I could’ve gotten 55 readers if your name was on it….shoot!

Since the only metric that matters with direct mail is ROI, let’s turn the 10% into a numbers game. Say you normally get 100 responses with no personalization. With personalization, the same letter can generate 110 responses. If your average gift per response is $40, then you just made $400 by putting a name on a solicitation.

The same math can be applied to direct mail segmentation. I’ve heard many organizations that send the same message to everybody, regardless of their relationship with the donor. Here’s the perception when receiving an un-segmented mail piece:

“Did they even realize my last gift?”

“Do they not notice that I donate at this time every year?”

According to research through hundreds of individual direct mail campaigns, Haines-Direct has experienced an average of an 8% increase in response when using segmentation.

If you normally send out 20,000 direct mail pieces, get a 2% response with an average gift of $40, then you would receive $16,000. With an 8% boost to response by adding segmentation, your response would move to 2.16%, thus increasing your total collections to $17,280.

Examples of segmentation would include:

  • Developing copy depending on when they last donated. For example, having the same introduction to donors who donated to the holiday appeal, but not the spring appeal
  • Adding additional copy thanking donors who have donated to the brick-a-thon, walk-a-thon, or phone-a-thon
  • Acknowledging where the donor made their last gift. Donors can donate through direct mail, through the phone, online, or in person.
  • Some donors want frequent communications from your organization, while others want an infrequent volume. Regardless of the frequency, all donors are valuable
  • There is a wealth of information in current research about generational giving trends. Most of this information provides strategies and tactics for targeting or segmenting your fundraising efforts toward these generational donors. The four main generations are: Matures, Baby Boomers, Generation X, and Generation Y (or Millennials).
http://brianlacy.com/consulting-services#annual-giving-consulting

http://brianlacy.com/solicitations-and-appeals#direct-mail-appeals

September 8, 2015
By Greg Palya
Haines Direct – Direct Marketing Solutions for NonProfits

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