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Are Premiums Right for Your Organization? DMAW Marketing AdVents – June 2016


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DMAW Marketing AdVents – June 2016

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Are Premiums Right for Your Organization? DMAW Marketing AdVents – June 2016

  1. 1. 8 MARKETINGADVENTSJUNE2016 Everyone likes to get a little something unexpected in the mail. As a result, most marketers have experimented with premiums in direct mail fundraising programs—with mixed results. As we know, what our intuitions tell us will work doesn’t always match the real- world outcomes. We know some organizations still are highly dependent on expensive premium packages that undoubtedly drive higher response rates. But looking beyond the initial response rate to consider donor value, our analytics have shown, time and again, that an overuse of premiums ultimately can result in lower-value, less- loyal donors—donors who are difficult to re-engage and successfully re-solicit. Of course, all organizations are different. So I contacted three direct marketing pro- fessionals, who are well versed in the sub- ject of premium use, to pick their brains about their premium strategies. First, I asked Nancy Campbell, senior director of mail and telemarketing at The Humane Society of the United States (HSUS), to weigh in with her thoughts on how HSUS uses premiums, and what is and isn’t working for her program. “HSUS continues to have success with tried-and-true paper premiums, such as notecards and notepads—although there has been a recent fall-off in address labels’ success, maybe because so many mail- ers continue to use them,” Campbell said. “We’ve also had good response when we’ve sent gardening gloves in the spring and fleece gloves in the fall.” In Campbell’s experience, the key is to connect the premium to HSUS’ mission in the letter copy, although the premiums aren’t necessarily mission-specific. Look at one of HSUS’ recent, breakthrough packages containing ankle socks with im- ages of animals on them. The letter copy explained that the donors would be re- minded of their commitments to animals each time they wear the socks. Based on response, the donors loved it, and by vary- ing the images on the socks, this is a pre- mium that could have a long shelf life. But, inexplicably, a similar HSUS scarf did not boost numbers, nor did an “I Love My Pet” cross-stitch or a package of basil seeds sent in a follow-up to the gardening gloves. More reasons to test, test, test. Additionally, Campbell reported that, when comparing the names acquired from paper premiums versus those acquired from more substantial premiums (e.g., gloves, tote bags), the overall long-term donor value is comparable. But HSUS’ non-premium packages deliver donors with the best long-term value. I also spoke with Laura Connors, vice president of membership at the National Parks Conservation Association (NPCA), to get her take on premium use. “For NPCA, our best-performing pre- miums are mission-related to appeal to our outdoors-focused members—gifts like a bucket hat, satchel/messenger bag, mini-lantern and blanket,” said Connors. “We haven’t seen any jaw-dropping break- throughs in premiums, and although they work for other organizations, water bot- tles, which seemed like a no-brainer, and grocery totes didn’t work for us.” For NPCA, mission-relevant premiums work as well as more generic giveaways. “We don’t see a lot of difference in our return on investment based on premiums,” Connors explained. “List selection and package copy/design make much more of an impact on our successful metrics.” Finally, I talked to Dane Grams, mem- bership director at the Human Rights Campaign (HRC), about the organization’s unique experience with premiums. We began by talking about what works. “We’re lucky at HRC that our logo mer- chandise is also our visibility; since our logo is also our mission, everything is essentially mission based,” Grams noted. “Bags, T-shirts and mugs do particularly well for us. And this past winter we had two HRC-cap options—a knit hat for donors in cool places, and a baseball cap for [those in] warmer places.” Grams explained that HRC also capital- izes on the fact that donors love options. “Our new control acquisition package gives people a choice of three premiums: a mug, an umbrella or a field bag,” said Grams. “Or you can get all three for a certain dollar level. We’ve also been offer- ing freemiums on social media to great success, including inexpensive items, like stickers and address labels.”This helps HRC collect addresses and include these names in its acquisition mailings, which double as fulfillment vehicles. Like most organizations that use premiums/freemiums, HRC has found the sweet spot for what donors want through rigorous testing. It also has found what its donors don’t want. Grams said anything with an HRC logo works, as long as it isn’t cheap or defective, and doesn’t break in the mail. The experiences of Campbell, Connors and Grams are very different, but mirror the variety of responses to premiums that we’ve experienced with our clients. That’s why I recommend that organizations test frequently; ensure that their analytic infrastructures are in place; and wean their programs from the more expensive, transactional, premium-based approaches to hybrid programs that make clear con- nections to their missions, incorporate mission-relevant premiums, or, better yet, have no premiums at all and drive equal or better long-term value. If you can articulate a strong and compelling case for support that will motivate your donors to give—borne out by ongoing testing—the result will be lower upfront costs and higher-value donors who are more loyal to your org-anization over the long haul. Allison Porter is president and co-founder ofThe Avalon Consulting Group, a full-service direct marketing agency. She is well recognized across both the nonprofit and fundraising industries for her leadership and integrated, multichannel approach to fundraising. Are Premiums Right for Your Organization? CASE STUDY BY ALLISON PORTER A closer look at direct marketing campaigns in action