The document discusses testing direct marketing efforts to maximize fundraising returns. It recommends: 1) Testing variables like creative, offer, media, and timing to determine highest-performing approaches. 2) Benchmarking metrics like response rate, return on investment (ROI), and cost per dollar raised to assess effectiveness over time. 3) Focusing efforts on "big movers" like audience, offer, and incremental media that have largest impact on ROI.

1. Test, Test, Test for Successful Direct Marketing Michael Sexauer Director of Marketing and Membership Development Pittsburgh Parks Conservancy

2. Parks Conservancy Mission To improve quality of life for the people of Pittsburgh by restoring the park system to excellence in partnership with the City. Founded December 1996

3. Parks Conservancy Projects Ten major capital projects completed since 1996. Over $45 million raised and invested in the parks system. Four major parks including 1,700 acres in the City. 167 other parks and ‘parklets’ $10 million annual operating budget.

8. Parks Conservancy Members Over 4,500 active members. Household profiles index* very high: Head of household 35-54 (185 index) Families with children (334 index) College grads and advanced degrees (475 index) Employed professionals (453 index) *An index of 100 is average compared to the Pittsburgh market. Source: Claritas.

9. Why do we… have a marketing plan? To make money use direct mail? To make money test our direct mail programs? To make MORE money

10. Direct Marketing Efforts Newsletter four times per year. Monthly membership renewals. Quarterly reactivation mailings. Two acquisition mailings annually Share lists through a third party with other institutions. Want to break even on these.

11. Direct Marketing Numbers Last year the Parks Conservancy: Mailed 94,789 ‘ask’ pieces Spent $ 45,702 Grossed $ 183,504 Averaged 2.9% response rate Achieved a 302% Return on Investment Raised $1 for every $0.25 spent

12. Which one matters most? Mailed 94,789 pieces Spent $ 45,702 Grossed $ 183,504 2.9% response rate 301% Return on Investment Raised $1.00 for every $0.25 spent

13. Before you test, benchmark Report results that makes sense to your audience (or show all of them). Response rate by itself is useless as is gross revenue and average gift. ROI is cherished by C-level execs and board members but not understood by all. The cost to earn a dollar resonates with almost anyone. Above all, report what you learned and changes over time.

14. Sample Metrics

15. Return on Investment (ROI) (Gross Rev. – Expenses) Expenses CAUTION: Account for all expenses! If you are acquiring a new member, will you include the cost to service the membership. Newsletters, card mailing, invitations, etc.

16. Cost Per Dollar Raised (CP$R) Total Expenses Gross Revenue How efficiently are you raising money? The closer to $0.00 the better Close to $1.00 or over it may be hard to explain. Acquisition efforts are a good example.

17. What variable(s) to test.

18. Guesses?

19. Which variable to test? Audience Channel Creative Media Message Offer Timing

20. Which variable to test first? Creative Offer Media Timing Audience Channel Message

21. The Money Slide

22. Focus on profit drivers to maximize ROI.

23. Where to put your energy. Big Movers Audience 20:1 Offer 10:1 Incremental Media 6:1 Timing 5:1 Channel 3:1 Message 3:1 Creative 2:1

24. Multivariate Examples Test multiple things at the same time by creating cells that hold other items, like list, constant: Outer envelope creative Return envelope creative Reply device Outgoing postage treatment Combine e-mail and mail

25. Lessons Learned Employ a champion/challenger model Be sure to keep track of your efforts—institutionalize the knowledge Bad tests can be worse than no tests Don’t retest the same thing Be sure to include all costs Test accurately Don’t assume you don’t need to test

26. Apply to other channels Other DM methods should be tested. According to the DMA Factbook 2010: 49% of marketers using e-mail found open rates highest when sent between 10am and 2pm The Parks Conservancy found that Tuesday to Thursday between 11 and 12 is best Emails with subject lines with fewer than 35 words have higher open rates We test all sorts of things.

27. Fun Facts from the DMA Average consumer receives 24.7 pieces of direct mail weekly. Postcards are most likely to be read 42% for letters and 56% for postcards in the non-profit category. Direct mail advertising accounts for 52% of all mail volume in the US (and keeps first class postage from skyrocketing)

28. More Fun Facts from the DMA In 2008, over half of all standard mail sent to seniors contained a request for a donation. A courtesy reply envelope pulls better than a business reply envelope.

29. Michael Sexauer Director of Marketing 412-682-7275 x222 [email_address]