By Alan Sharpe, CFRE
One of the easiest ways to boost net revenue in direct mail fundraising is to stop sending every appeal to every donor.
In every donor database are donors or members who are either unresponsive or less responsive than others in your file. These donors should receive fewer mailings than your most responsive donors.
Reducing the number of letters you drop in the mail immediately lowers your costs, thereby boosting your net revenue.
So how do you decide who to mail? You segment your database. The three most common ways of segmenting donors are Recency, Frequency and Monetary Value (RFM for short).
Your most valuable donors gave recently, give frequently and give much. Your least valuable (and most costly) donors have not given recently, give infrequently and give little.
When you segment your database by Recency, Frequency and Monetary Value, you quickly discover which segments are most responsive to your appeals and which segments generate the most revenue.
Donors who gave recently, give frequently and give much will respond in larger numbers to your direct mail appeal letters than those donor segments who gave a long time ago, give infrequently and give small donations.
Your results show you the people that you should mail less often. You do not have to mail every appeal and every newsletter to supporters who are unresponsive. Instead, you can drop these folks from you general mailings and perhaps mail them just twice a year.
Send them a renewal mailing or membership renewal mailing during the year, and ask them for another gift at Christmas.
Take the money you save and either bank it or spend it on your most-responsive donors. For example, in your next general mailing, affix first-class postage stamps to all envelopes going to donors who give you $500 or more each year.
Or spend the money on personalizing the reply device for these donors, asking for an amount that matches their giving history.
Your volunteer Board of Directors may wonder how you can possibly make more money by mailing fewer appeals to fewer people, but they will be delighted when you do.
If you need help writing and designing direct mail fundraising packages that appeal to each of your donor segments, give us a call at 1 877 742-7732.
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