The best way to measure your success in direct mail donor acquisition is to examine your cost to raise a donor rather than your cost to raise a dollar.
Your cost to raise a dollar is a perfectly valid metric in direct mail fundraising, of course. By dividing the cost of your mailing by the gross income, you arrive at a number that helps you compare different mailings, compare results across different years, and compare fundraising methods (such as direct mail versus banquets versus telephone fundraising).
But acquisition mailings are different than other fundraising letter mailings in one major respect-you are aiming to raise donors first, donations second. An acquisition mailing cannot be considered a success if it acquires no new donors, regardless of how much money it brings in.
That’s why you need to measure your cost to raise a donor, and watch that number over time to see how it fluctuates when you mail to new lists or mail new acquisition packages.
You calculate your cost to raise a donor by dividing your net cost by the number of donors acquired. Let me illustrate.
You mail 1,000 packages at a cost of $1 each.
Total cost: $1,000.
You generate a response rate of 1%.
Total new donors acquired: 10.
You raise a total of $750.
Which means you don’t cover your costs (common in direct mail donor acquisition).
So your net cost is $250.
Your cost to raise a dollar is $1.33.
Your cost to acquire a donor is $25.
If this sounds like an expensive way to attract new donors, remember that donors acquired through the mail tend to repay the cost of their acquisition with repeated gifts over time, provided that you acknowledge their gifts promptly and personally, appeal to their interests, and mail them often enough.
When you compare the results for your donor acquisition mailings over time, you’ll discover that some lists perform better than others and some packages perform better than others. Your goal is to find the lists and packages that acquire the most donors at the lowest cost.
If you need help writing and designing effective donor acquisition packages, phone Alan Sharpe today to see if we can help you. Call 1 877 742-7732.
Or read these helpful handbooks:
You might be interested in…
 Handbook Number 11 Attract New Donors and Members with a Magnetic Direct Mail Donor Acquisition Package. Discover over 75 tips, insider secrets and proven tactics by analyzing a superb donor acquisition package from a national charity. |
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 Handbook Number 18Boost Your Response Rates and Income with Simply Irresistible Fundraising Letter Envelopes. Learn from 22 examples of fundraising letter packages that really push the envelope. |
