market place donor acquisition

Marketplace Acquisition OverviewWhat’s hot? What’s not?

Fiona McPheePareto Fundraising

• New Donors• Where we can get them• Who they are• What’s hot and what’s not

You do it alreadyYou are new to it

The Big Difference in decision making?

New Recruits - by year

500.0 K

Recruitment Year

Bequest Cash Child Sponsorship Regular Gift Event Other

New Cash Recruits - by channel of solicitation

Direct Mail Face to Face Media Online Other Phone

New RG Recruits - by channel of solicitation

Direct Mail Face to Face Media Online Other Phone

Channel•Direct Mail•Digital•Face-to-Face•Phone•Combination / Integrated

Audience•Classic (65+)•Boomers•Gen X/ Gen Y

Perspectives

CHANNELS

Direct Mail• Last few years the universe has been targeted

better and better

Co-Ops

Better Response

better and better

Co-Ops

Higher duplication rates

Better Response

New Donors New, but has given to other Charities

Cash Donor Recruitment - by year

better and better

Co-Ops

Higher duplication rates

Regular Giving Conversion Potential

Impact on your retained donors

Impact on 2nd gift rates

BUTBetter Response

Direct Mail• Premiums

– Increase campaign response rates

– Campaign costs impact– Impact on initial value– Impact on ongoing value

• 2nd gift rates• Gift upgrade potential• RG conversion potential

Direct Mail• Premiums create a

type of donor:– who likes premiums– who is likely a bit

lower value– who does respond

ongoing

Test Cell RR% Av$ ROI

No Premium 16% $51 3.7

Premium 21% $46 3.7

No Premium 11.7% $49.34 4.4

Premium 13.2% $48.28 4.0

No Premium 9.6% $49.30 1.76

Premium 11.1% $46.85 1.73

Direct Mail Considerations

•18 months – plan to diversify and test from the start

Shelf life of

creative

• Email & phone number collection

Data collectio

n strategy

2nd Gift rate by contact type segments

Addr1 Addr1Email

Addr1Email

Landline

Addr1Email

LandlineMobile

Addr1Email

Mobile

Addr1Landline

Addr1Mobile

Email EmailLandline

EmailMobile

2nd Gift Rate (Year 1) RecruitsBase: 2009 - 2014 Recruits

Multi-contact opportunity donors have the highest

second gift rates. No address sees much lower

conversion.

Address & Mobile potentially an age thing

2nd Gift Rate Donors

Second Cash Gift - within 12 months by channel (2013 recruits)

•Receipt ask packs•Timing•Adaptation of warm - for a year•Other offers e.g. Regular Giving, Virtual Gift, Advocacy

2nd gift strateg

Direct Mail Acquisition• Still the volume opportunity to build a warm donor base• Warm donor bases naturally decline in volume

Retention Rate Income per Donor

Cash Donor Retention - by year, referenced to income per donor

Direct Mail Acquisition• Still the volume opportunity to build a warm donor base• The source of bequest prospects

Direct Mail Acquisition• Still the volume opportunity to build a warm donor base

If you aren’t doing it

•It will make you money•You need to be clear on who you are recruiting and what they need moving forwards to deliver a return •Biggest considerations are your objectives and your data

If you are currently doing it •Analyse value beyond your campaign ROI•Consider what impact your tactical decisions having past the campaign impact•Know your long game

Acquisition Proposition• You (more than likely) have more than one• With a saturated audience (regardless of channel) consider the

opportunity to test

Face to Face• It’s still growing & still the only volume option • It’s a suppliers market• Not doing it yet? Have you got what it takes?

Cash / Budget

Cause Type

PhoneRolling Cash & Lottery programs• Hard to get going – huge

investment• Long standing facing

declines• I wouldn’t try it

Lead Conversion• Strong results• Data quality & costs are key• pSMS has promise and

could drive lead volumes• I’d try it

DigitalGrowing at the fastest rate

• Still only represents less than 12% of new recruits

Direct to donation is hard

• Big emergencies are an exception – are you ready?

Integration is all the rage

• More on this

Two step is making in roads

• More on this

Start with warm – spin off

acquisition opportunities

Two Step Digital

• Bigger potential audience then cold direct to donation

It’s a numbers game

Types of Two Step

Digital lead to Phone

Digital lead to Email

Street lead to Phone (Field Marketing)

SMS lead to Phone

Two Step• Online leads converted via Phone

– 10% - 15% of F2F volume max potential– Some charities are doing incredibly well– Quality of leads critical– Cost of leads varies – you can generate your own– Phone agency skill @ conversion– 10% non-starters (vs. ~20% F2F) but you pay for them (unlike

DigitalLearn from warm

Cause / proposition critical

Landing page, landing page, landing page

Get creative

Other Channels

TV•RG for ROI•Overseas & Environment•Has potential for right cause•Be prepared to invest to test•Use the experts

Inserts•Great ROI with right media•Proposition & execution key•Nice low volume, background channel

Others•Part of integrated strategy not stand alone

AUDIENCE

What audience will fulfil your longer term needs?

• Regular Giving– Who converts?

• Middle Donors– Where do they come

from?$100 / $1,000• Bequests

– Highly engaged supporters

Are the best audiences saturated?• For some

– Best premiums to the best swapped names (65+ market)• 80% duplication rates• Each time you swap you risk money in warm• Facing the need to look elsewhere• But if you have not done it yet …

– Previous best regions for F2F becoming harder• More competition• Exposure over time• Reducing quality

GenerationsCivics / Seniors Boomers Gen X Gen Y

Current Age 71+ 52 - 70 36 - 51 21 - 35

Giving Behaviours • 80%+ give• Most likely to give

cash• More likely to

donate goods

• 70%+ give• Most likely to do

payroll giving• More likely to support

peer-to-peer

• 70%+ give• More likely to

fundraise• More likely to

advocate• Technology savvy

advocate• Technology driven

Where are we acquiring them?

• Direct Mail• Phone• Door to Door

• Direct Mail• Phone• Face to Face / Door to

Door• Two Step Digital• Peer-to-Peer

• Phone• Face to Face• Two Step Digital• Peer-to-Peer

• Face to Face• Two Step Digital• SMS• Peer-to-Peer

Life stage affects propensity to give – younger people establishing careers, holding debt, having families are less likely to give

GenerationsCivics / Seniors Boomers Gen X Gen Y

Current Age 71+ 52 - 70 36 - 51 21 - 35

Giving Behaviours • 80%+ give• Most likely to give

cash• More likely to

donate goods

• 70%+ give• Most likely to do

payroll giving• More likely to support

peer-to-peer

advocate• Technology savvy

advocate• Technology driven

Where are we acquiring them?

• Direct Mail• Phone• Door to Door

• Direct Mail• Phone• Face to Face / Door to

Door• Two Step Digital• Peer-to-Peer

• Phone• Face to Face• Two Step Digital• Peer-to-Peer

• Face to Face• Two Step Digital• SMS• Peer-to-Peer

Our donors are changing - meet Margaret

She has a Facebook and looks regularly

Has an email address and keeps in contact with family and friends

Visits magazines and special interest sites online forums etc.

Uses Skype to keep in contact with family overseas

Still reads printed Newspapers

Responds well to traditional Direct Mail

Connect with professional networks via linked in

Generations• Civics / Seniors were hot but now huge pressure on them

– Before you look at acquisition → retaining and growing those you already have is more valuable

• Boomers looking hotter– Bought in the 80’s, wealth now with less intention to have any left– Life-stage for giving

• Gen X & Gen Y are hot and cold– Volume recruitment opportunity– Low commitment – what percentage are still there 4 years later?– Want transparency and control

Generations• Who do you need and why?

– $$ now– Voices now– $$ increasing into the future– Increasing number of voices– (Ongoing) participation– Big bequest pay days down the track

Regardless of GenerationMore channels =

More opportunity

They use multiple channels but in varying degrees•Some for responding•Some for consuming

Establishing channels early

is better

You can increase channel

penetration

TO THINK ABOUT

Measuring ROI / Value beyond the campaignltv2014

Warm Costs Contact % Pack/Call Postage F2F cost Total costCash program 100% $1.50 $0.41 $0.00 $1.91 1F2F RG 90% $0.00 $0.00 $15.00 $13.50

1 $0 $0 $0 $435,000 $0 $0 $0 $0 $371,000 $806,000 EOYR 100% $1.00 $0.41 $0.00 $1.41 Ongoing DM Ongoing Premium2 $0 $0 $0 $1,000,000 $0 $0 $0 $0 $314,433 $1,314,433 RG Conversion 50% $12.00 $0.00 $0.00 $6.00 100% 100%3 $0 $0 $0 $1,000,000 $0 $0 $0 $0 $314,433 $1,314,433 RG Prem Conv 35% $12.00 $0.00 $0.00 $4.204 $0 $0 $0 $970,000 $0 $0 $0 $0 $314,433 $1,284,433 RG Servicing 100% $10.00 $1.105 $0 $0 $0 $940,900 $0 $0 $0 $0 $314,433 $1,255,333 6 7%6 $0 $0 $0 $912,673 $0 $0 $0 $0 $314,433 $1,227,1067 $0 $0 $0 $885,293 $0 $0 $0 $0 $314,433 $1,199,726 Activity Cash Resp RG Resp Cash Ave RG Ave Year 1 ROI8 $0 $0 $0 $858,734 $0 $0 $0 $0 $314,433 $1,173,167 DM Cash 2.000% 0.000% $35.00 $0.00 0.00 39 $0 $0 $0 $832,972 $0 $0 $0 $0 $314,433 $1,147,405 DM Cash Prem 8.000% 0.000% $33.00 $0.00 0.98

10 $0 $0 $0 $807,983 $0 $0 $0 $0 $314,433 $1,122,416 F2F RG 1 0.000% 90.0% $0.00 $30.00 0.00F2F RG 2 0.000% 95.0% $0.00 $35.00 0.00 3

Cash Inserts 0.500% 0.000% $66.00 $16.00 0.00

RG Inserts 0.000% 0.080% $66.00 $16.00RG O/L leads 0.000% 7.000% $0.00 $15.00 0.00

Expenditur Acq Warm Conversion Net Inc Expenditure Gross Inc Net Inc Cash RG C DRTV 0.000% 0.011% $0.00 $23.80 0.00Year 1 $889,741 $307,882 $195,561 $5,901 -$380,396 $889,741 $509,344 -$380,396 9,330 0 #Year 2 $1,731,570 $707,775 $762,142 $53,457 -$208,196 $2,621,310 $2,032,718 -$588,592 30,777 0 # F2F 1 F2F 2Year 3 $1,871,288 $707,775 $1,779,769 $108,514 $724,769 $4,492,599 $4,628,776 $136,177 52,225 0 # 10% 15%Year 4 $1,919,230 $686,542 $2,533,135 $154,376 $1,454,822 $6,411,829 $8,002,828 $1,590,999 73,029 0 # DM Cash $0.80 $0.60 $0.00 $1.00 $1.42Year 5 $1,961,149 $665,945 $3,235,135 $193,281 $2,133,213 $8,372,978 $12,097,190 $3,724,212 93,210 0 # Prem DM Cash $1.15 $2.50 $0.00 $1.00 $3.73Year 6 $1,988,702 $645,967 $3,879,553 $226,074 $2,762,892 $10,361,679 $16,848,783 $6,487,104 112,784 0 # F2F RG 1 $0.00 $0.00 $300 $5.00 $304.50Year 7 $2,006,202 $626,588 $4,469,475 $253,498 $3,343,359 $12,367,881 $22,198,344 $9,830,463 131,772 0 F2F RG 2 $0.00 $0.00 $321 $5.00 $326.05Year 8 $2,015,024 $607,790 $5,010,120 $276,212 $3,879,099 $14,382,905 $28,092,467 $13,709,563 150,190 0 Cash Inserts $0.00 $0.25 $0.00 $1.00 $0.26Year 9 $2,015,275 $589,557 $5,530,781 $294,801 $4,399,864 $16,398,179 $34,507,606 $18,109,427 168,055 0 RG Inserts $0.00 $0.25 $0.00 $1.00 $0.25 2Year 10 $2,007,211 $571,870 $6,065,690 $309,779 $4,940,127 $18,405,391 $41,454,945 $23,049,554 185,385 0 RG O/L leads $2.50 $14.00 $0.00 $5.00 $9.85

DRTV $0.02 $4.64 $0.00 $5.00 $0.02 0 10

Lowest net income point is -$1,086,273 in Month 25 00

Expenditure Expenditure Gross Inc Net Inc

Year 1 $1,388,265 $1,388,265 $8,172,618 $6,784,353Year 2 $2,214,230 $3,602,496 $16,872,419 $13,269,924Year 3 $2,332,930 $5,935,426 $26,364,384 $20,428,959Year 4 $2,356,176 $8,291,601 $36,404,320 $28,112,718Year 5 $2,361,754 $10,653,356 $46,984,482 $36,331,126 Acquisition Breakeven Month is Month 36Year 6 $2,374,895 $13,028,251 $58,028,944 $45,000,693Year 7 $2,379,255 $15,407,506 $69,493,066 $54,085,559Year 8 $2,376,086 $17,783,593 $81,336,743 $63,553,150Year 9 $2,365,386 $20,148,979 $93,548,535 $73,399,557Year 10 $2,347,313 $22,496,291 $106,150,657 $83,654,366

Year F2F RG F2F RG 2 Cash DM Cash DM Prem

Thankyou Total cost

Executive SummaryAcquisition

Cumulative DonorsCumulative Annual Income

Pack/Call Cost F2F Cost

Warm DM Program

RG Conversion in month

F2F Attrition

Bequest Income

Major Donor Income

Cash Inserts RG Inserts RG O/L leads DRTV Fixed Costs Total

Acquisition Spend

$11,464,121$11,843,677

Non Starter Rate

Gross Income$8,172,618$8,699,801$9,491,965

Acquisition + Existing Annual Income Cumulative

DRTV Attrition

O/L Lead Attrition

Acq Costs Lists and Post

$12,211,793$12,602,122

Net Inc$6,784,353$6,485,571$7,159,035$7,683,760$8,218,408$8,669,567$9,084,866$9,467,591$9,846,407

$10,254,810

$10,039,936$10,580,162$11,044,462

0.6 0.91.4 1.8 2.1 2.4 2.7 2.9 3.2 3.5

0.000.501.001.502.002.503.003.504.00

Year10

NewROI by Year

Year10

ions New Income by Year

Net Income Gross Income

0.6 0.8 1.0 1.2 1.4 1.6 1.8 2.0 2.1 2.3

Year10

Cumulative New ROI by Year

-$10.0

Year10

ions Cumulative New

Income by Year

Net Income Gross Income

$0$200$400$600$800

$1,000$1,200$1,400

Year10

s Est Major Donor Income by Year (new Donors)

Est MD Income

$1,000

$1,500

$2,000

Year10

Est Bequest Income by Year (new Donors)

Est Bequest Income

0.001.002.003.004.005.006.007.008.009.00

Year10

Combined Cumulative ROI by Year

$40.0$60.0$80.0

$100.0

$120.0

Year10

ions Combined Cumulative Income by Year

Gross income Net Income

-$5.00

$10.00

$15.00

$20.00

$25.00

1 6 11 16 21 26 31 36 41 46 51 56 61 66 71 76 81 86 91 96 101

ions Acquisition Breakeven Month is Month 36

Lowest net income point is -$1,086,273 in Month 25

• ROI 1 year and 5 year– Consider ALL

costs– Consider ALL

income

Direct to Bequest

Different Quality Donor Groups

Lower volume for better

quality

Higher Volume for bigger

prospecting pool

High Value recruitment

THANK YOU

Fiona McPheefiona.mcphee@paretofundraising.com Twitter: fimcpheePhone: +6421 336 905Web: www.paretofundraising.com

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