Donor Acquisition:

What can you gain

from direct mail?

SPEAKERS

Carl Young

Peter MacCallum Cancer Foundation

Fiona McPhee

Our Investigation Journey

Market Context Audience Testing

WHAT IS GOING ON OUT THERE?

Grow

Grow

Cur

rent

Do

nors

Reac

tivat

e La

psed

Don

ors

Repl

ace

Lost

&

Add

Mor

e Do

nors

Mai

ntai

nGr

ow /

Mai

ntai

n

Curre

nt D

onor

sRe

activ

ate

Laps

ed D

onor

sRe

plac

e Lo

st

Dono

rs

70% of ‘new’ donors in 2012

were single cash givers (the rest

being new regular givers)

New cash donors accounted for 37%

of all cash donors in 2012 (up from 28%

6 years ago)

25% of cash income in 2012 came from these new donors

18% of all Regular Givers in 2012 were

new donors

New Recruits

0

5,000

10,000

15,000

20,000

25,000

30,000

35,000

40,000

45,000

50,000

Cash Regular GiftPFBM10_Analysis_ALL_v2.xlsm

Where the cash donors come from

0

50,000

100,000

150,000

200,000

250,000

300,000

350,000

400,000

450,000

500,000

2003 2004 2005 2006 2007 2008 2009 2010 2011 2012Direct Mail Face to Face Media Online Other Phone 2Step

PFBM10_Analysis_ALL_v2.xlsm

DIRECT MAIL IN YOUR PORTFOLIO

New Cash Recruits

Average Cash Gift

Face to Face, $356

SMS, $342

TV, $174

Door to Door, $172

Unsolicited, $160

Online, $159

Other, $154

Unaddressed, $132

Email, $127

Press Inserts, $113

Press Adverts, $105

Radio, $91

Direct Mail, $61

2Step, $40

Phone, $40

$0 $50 $100 $150 $200 $250 $300 $350 $400

1,859

227

7,819

7,67868,113

3,299

4,379

2,258

PFBM10_IncomeSummary_v4.xlsm

239,507

2,066,846

9

475

11,362149,233

1,176

Direct Mail delivering a $61 average gift and the most gifts of all

channels

Average Cash Gift

$0 $50 $100 $150 $200 $250PFBM10MSF_IncomeSummary_v4.xlsmPFBM10MSF_IncomeSummary_v4.xlsm

Overall Average Gift By Charity

$0 $50 $100 $150 $200 $250 $300

HabitatMSF AU

YOTSCatholic M.

Bush HeritageOxfam AUAnglicare

PCFARed Cross AU

A4UNHCRUNICEF NZ

RFDS WAMary PotterLeprosy M.

HRCGuide Dogs VIC

Auckland CMWWF NZ

RSPCA QLDSCHFCBMI

Environment VicWater Aid

StarlightSmith Family

LifeflightRSPCA SARFDS VICCanTeen

World VisionRFDS SE

OXFAM NZWellington FA

AmnestyIHCICV

Berry StCCNSW

Mater FdnPeter Mac

ACFWWF AU

NBCFBarnardos AU

CCIAVisionSEDA

CBMI NZSt Johns NZ

CPAHWNS

Shepherd C.LDH

AlfredYooralla

CHWSurf LSRNZFB

Camp QualityBaker IDIHeart AU

TCCQLDPlunket

IndependenceStroke

Greenpeace NZStarship

PSEC

First Gift Average Gift By Charity

Your causeHow you askWhat you ask

Who you get

Average age at Recruitment

Direct Mail: 68Phone: 60Online: 48

Second Gifts

0%

10%

20%

30%

40%

50%

60%

70%

<25

25-3

4

35-4

4

45-5

4

55-6

4

65-7

4

75-8

4

85+

(bla

nk)

<25

25-3

4

35-4

4

45-5

4

55-6

4

65-7

4

75-8

4

85+

(bla

nk)

Cheque Credit Card

Cash 12m RG 12mPFBM10_Analysis_ALL_v2.xlsmPFBM10_Analysis_ALL_v2.xlsm

Second gift rates vary for different demographics &

giving behaviours

Sir Peter MacCallum was an esteemed pathologist whose vision was to create a world class cancer centre where scientists and doctors worked side-by-side to quickly translate research into care.

The Peter MacCallum Cancer Centre is a public hospital situated in Victoria but treats patients from across Australia.

It is Australia’s only specialist hospital and research centre with a single focus – conquering cancer.

It houses the largest cancer research group in the Southern Hemisphere and is world renowned for its work.

Today’s Peter Mac VisionThe best in cancer care, accelerating discovery, translating to cures.

Sir Peter MacCallum“Nothing but the best is good enough in the treatment of cancer.”

Peter MacCallum Cancer Centre

https://www.youtube.com/watch?v=C6acEVLwADY

Peter Mac Gross Income Growth

1 2 3 4 5$0

$5,000,000

$10,000,000

$15,000,000

$20,000,000

$25,000,000

$30,000,000

$35,000,000

$40,000,000

$13,227,938$16,274,079

$21,245,787

$30,660,073

$39,757,102

Gross revenue FY 2009 - 2014

1 2 3 4 5

Peter Mac Gross Income by Channel

1 2 3 4 5 6 7 8 9 10 11 12 130

1,000,000

2,000,000

3,000,000

4,000,000

5,000,000

6,000,000

7,000,000

8,000,000

Fundraising Revenue by Stream (FY2009-2014)

Series1 Series2 Series3 Series4 Series5

Direct Mail the engine room of FR – full integration ahead

Direct Mail

Geographical reach

Donor Acquisition

(cash)

Obtain second gifts and lead generation for Regular Giving

High Value & Major Giving

Bequest lead generation

Stewardship (all FR programs),

reactivation and upgrading

Growth in Peter Mac donor base

TARGET AUDIENCE

Finding the Core Audience

1 2 30.00%

1.00%

2.00%

3.00%

4.00%

5.00%

6.00%

7.00%

8.00%

9.00%

10.00%

$0.00

$5.00

$10.00

$15.00

$20.00

$25.00

$30.00

$35.00

$40.00

$34.90 $35.60$32.90

Results by List Type

Series1Series4

A charity donor is a charity donor …

Swap Co-Op Subscription Compiled Survey2nd Gift 90 13.6% 8.9% 8.4% 4.1% 5.4%2nd Gift 180 30.4% 23.0% 15.6% 10.2% 14.3%2nd Gift 270 37.8% 28.4% 20.4% 14.6% 12.7%2nd Gift 12m 48.6% 36.5% 29.9% 23.4% 18.2%Recruits 1,189 3,177 169 852 57

0

500

1,000

1,500

2,000

2,500

3,000

3,500

0%

10%

20%

30%

40%

50%

60%

Great cash donors, usually RG rejecters

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

0 1 2 3 4 5 6 7+

Prop

ortio

n of

don

ors g

ivin

g to

mul

tiple

char

ities

Cash Donor Retention 2012by number of additional charities supported

PREMIUM ACQUISITION MAY 2013DATA SWAPS & CO-OPS

Our Downward Trend• Previously successful packs mailed to high

response cold lists that had initially achieved 5-6% response rates, had now dropped to 3.4%

• Tactics that had once achieved an ROI between 0.9 and 1.2 were now achieving 0.6

Declining returns from

cold lists• As a state-based charity with no permission to

mail to names in NSW, growing our prospect pool (via lists) was becoming increasingly challenging

• By April 2013 short around 9,000 new cash recruits against an annual budget of 21,900 recruits and down on acquisition gross income by almost $200,000

Limited geographical

reach

Addressing the downward trend

Change in strategy

• Continued to mail proven premium acquisition packs.• Simultaneously tested other techniques to lift response rates

Testing with Banker packs

• The creative was already successful• Sending our ‘banker’ packs ensured risk was minimised and the test outcomes more valid for

benchmarking

Testing targeting

• Testing new high-performing list options, including data swaps with other charities and data co-ops• We believed these would be the greatest returns, both in terms of immediate campaign results and in

learnings for future campaigns

Less subjectivity

• Using an established banker creative provided more reliability and less subjectivity in the final results analysis

Banker 1: Dove Stationery Pack

Banker 2: Butterfly Notepad Pack

Strategy• 18,700 cold list names from three of our best performing lists• 9,600 charity swapped names from six charities• 31,700 names from two data co-opsTargeting• Timing had not shown to significantly impact acquisition

activities• However, MAY 2013 chosen to leverage tax-time giving donors• Get in first to overcome the potential ‘overcrowding the

mailbox’ issue of Tax appealsTiming

• The acquisition cash ask strategy was based on our previous and successful ask strategy of $25, $50 and $100Asks

Testing Cash Amounts

A lower ask resulted in a higher ROI due to a higher response rate

ResultsMailed 60,000

3,909 (6.5% response rate) new cash donors recruited vs. targeted 2,595 (4.3%)

An average gift of $38.71 vs. targeted $34.52 ($20,000 outlier removed)

Positive net return of $36,318

An ROI of 1.27, twice that of the targeted 0.6

List Performance Volume Resp. RR% Ave $ Gross $ Net $ ROI

Cold List 1 1,537 53 3.4% $42.50 $2,255 -$1,202 0.7

Cold List 2 10,504 321 3.1% $41.40 $13,305 -$10,326 0.6

Cold List 3 6,670 287 4.3% $36.50 $10,484 -$4,522 0.7

Co-op 1 3,080 161 5.2% $44.40 $7,142 $213 1.0

Co-op 2 28,578 1,945 6.8% $51.80 $100,756 $36,465 1.6

Charity Swap 1 1,497 161 10.8% $23.10 $3,712 $344 1.1

Charity Swap 2 2,757 298 10.8% $33.20 $9,885 $3,683 1.6

Charity Swap 3 1,914 287 15% $19.10 $5,472 $1,166 1.3

Charity Swap 4 886 86 9.7% $54.30 $4,673 $2,680 2.3

Charity Swap 5 1,619 159 9.8% $49.00 $7,785 $4,143 2.1

Charity Swap 6 937 66 7% $42.30 $2,795 $687 1.3

Total 60,000 3,909 6.5% $43.80 $171,298 $36,318 1.3

Learnings• Pack - very little difference between how each banker pack performed• Both achieved just over 6% RR• While the stationery pack achieved a much higher average gift of $51 vs notepad

pack - average gift of $37 can be attributed to a few large gifts (including a $20,000 donation)

Pack variances

• Charity swapped data performed brilliantly making up 27% of new donors• Each of the 6 charity swaps achieved varying response rates • However, overall response was 10.99%, with average gift of $32.47 and an ROI of

1.6

Charity Swap

Results• Donors from data Co-Ops made up 54% new donors • RR 7.34% with an average gift of $32.24 ($20,000 outlier removed) and an ROI of

1.3• Co-Op data sources exceeded cold list RR of 3.53% • Ave gift from the cold lists was slightly higher at $36.33• Large RR of charity data swaps and Co-Ops = more donors at a cheaper CPA• The ROI was more than double the ROI of cold lists.

Data Co-Ops

Learnings

Promiscuous donors

• The success of these data sources highlighted;

• The more promiscuous a donor is (i.e. the more charities they give to or the more direct mail responsive they are), the higher their propensity to respond to cold acquisition mailings

Testing with established banker packs• Investment into testing new

creative and pack elements is essential in keeping a direct mail acquisition program fresh

• The strategy of rolling out a volume of banker packs to solid, best performing lists (as well as exploring new data sources) has played an important part in the Foundation’s ongoing acquisition strategy - but not for testing sake

Minimising risk and maximising test outcomes• Testing with established banker

pack - minimises risk while maximising ROI

• Allows for more accurate evaluation of the data and of the new list sources

Re-mailing lists

Carole

Developed 2009

Young mother surviving breast cancer

Emily

Developed early 2012

Young girl (a twin)with a brain tumor

Similar response rates when tested against each other in 2012. Both have been tested with a range of premiums and other creative treatments

Is current banker: just achieved 10% RR with high value premium.

Re-mailing lists – from there to here

Emily or Carole - rotating banker packs to maximise returns

Campaign Qty Mailed RR% Comments

Feb-12 25,412 3.76% • Emily and Carole pack achieved the same RR%

Jul-12 120,005 3.00% • Only Emily's story featured• This was the time RR really started to drop off due to re-mailed name etc

Oct-12 113,066 3.24%• Only Emily's story featured• After this campaign we reviewed our acquisition approach and began to considering

pulling back on acquisition volumes

Feb-13 28,980 4.41%• Carole used for a quantity of survey packs as she was the original 'banker' for the

survey ask • Included a number of Emily packs to again rotate our case study to re-mailed names• All packs received between 4.4% and 4.9%

May-13 60,000 6.19%• Due to declining response rates from tired lists volumes reduced• Mailed 60,000 and spread risk by using both Carole and Emily packs• This was also the first Peter Mac tested mailing to charity swaps• Carole achieved a similar response rate to Emily

Sep-13 140,000 6.30% • Only Emily's story featured

TESTING

Peter Mac Direct Mail Experience Data driven

Strong case study

Urgency

Frequent asks throughout the copy

Longer letters

Strategic ask amounts

Share the vision of a better future – cures for cancers – progress towards this goal

Demonstrated impact but untied gifts - strong research examples – not driven by cancer types

Personalised letters – personalised thank you - clear service level standards for development officers

Integration with Major Gifts and Bequests (Bequest Officers have cash giving KPIs)

All donor functions revolve around the timing of Direct Mail Appeals

Complaint handling – learning to LOVE complaints

No newsletters – just donor care letters – for multiple fundraising programs (variables)

Proposition

2007 2008 2009 2010 2011 20120.0

0.2

0.4

0.6

0.8

1.0

1.2

1.4

1.33

0.85

0.73

0.64

0.47 0.50

0.69

0.56

0.47

0.31

0.30

0.85

5100

1350

4355

4

0.85

5100

0975

5889

6

Recruitment ROI

Case Study Survey Telemarketing

Type of Execution

Creative

THE FIRST STEP IS JUST THE FIRST STEP

Value comes from what you do after

0

2

4

6

8

10

12

Five Year Cash Ratio Five Year RG Ratio Five Year BQ RatioPFBM10_Analysis_ALL_v2.xlsm

Five Yr Ratio to first giftmail cash recruits, by charity

Assess Subsequent Value

Average bequest in 2012 was

$43,613.

The average major giver gave $4,312 in 2012

Supressing Wave 1 or 2 Responders

Christmas 2012 (2 waves)

• Mailed - 49,571 • Gross income - $535,008• 223 donors gave 2 gifts =

$21,454 • 7 donors gave 3 gifts

each = $555 • 2nd and 3rd gifts resulted

in an additional $11,111 gross income

Christmas 2013 (3 waves)

• Mailed - 57,272• Gross income - $652,587• 465 donors gave 2 gifts =

$50,932• 7 donors gave 3 gifts

each = $513• 2nd and 3rd gifts resulted

in an additional $26,500 gross income

Tax 2013 (3 waves)

• Mailed - 55,029• Gross income - $971743 • 374 donors gave 2 gifts =

$44,735 • 4 donors gave 3 gifts

each = $1,355 • 2nd and 3rd gifts resulted

in an additional $23,523 gross income

To supress or not supress that is the question!

Brand Awareness or Investment in Direct MailThe Jim Stynes Story - Official Trailer

http://www.youtube.com/watch?v=mwOV6CJmrlE

Brand Awareness or Investment in Direct Mail

Total $48,982.10 261 gifts (1 gift $20k + 1 gift $5k)

Excluding exceptional gifts $23,982.10259 gifts - Ave gift $92 (mainly on-line)

In-memorial gifts from state funeralTotal gifts $111

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