In a nutshell, here is the lesson.
If you’ve got the funds, spend it.
The reason I say this? It’s easiest if I explain by sharing a story of one my direct mail successes. It also happened to be one of my failures.
I once wrote an acquisition piece for a very small non-profit. It was inserted into a variety of publications and did exceptionally well.
When I say exceptionally well, it recruited 392 new donors (doubling the existing database). Income was almost $29,000. The cost was under $20,000.
Given most fundraisers will say you almost always lose money on the initial direct mail acquisition, this was very good. The client was delighted, especially since he knew the score and had expected a negative return.
I too was happy the insert had performed well.
But I was kicking myself… because it could have performed even better.
When I initially wrote the piece, it was designed to be a self-mailer.
But during production, the client asked me whether including the self-mailer component would really make that much difference to the response. Or at least enough response to justify the extra cost, which was about $6000.
Now I knew making it easy for the prospect to respond by including the self-mailer would boost response. But would it bring in enough to cover that extra $6000? At that stage, I didn’t know as there was no baseline data to measure against.
For a client with more resources, I wouldn’t have hesitated. I would have told them to spend the money and wear the cost of acquisition. But I knew these guys were operating on a shoestring.
So I told them they would recruit more donors with a self-mailer but I couldn’t guarantee how many extra they would get. I wimped out and let them make the decision.
So of course, they decided not to proceed with a self-mailer. The piece was produced as a trifold DL brochure.
Well, hindsight is always perfect. But I was very cross with myself when the results came in.
“If only I’d just told them to spend the money.” (Because I know they would have if I’d told them to.)
“Even if they hadn’t gotten a single extra donor, they still would have made a profit.”
“But I don’t believe they wouldn’t have gotten extra donors… it was just a question of how many…”
So the words of legendary direct mail copywriter Bill Jayme really ring true with me (as quoted by the legendary Mal Warwick in his book Testing, Testing 1, 2 3).
“I believe in going for broke. If I were launching a new venture, I’d pack everything into the initial package… And then, if the package was successful, I’d test down… cutting back on costs until returns begin to hurt. If you start with an economy package and it bombs, you’ll always wonder what would have happened if you had gone for broke in the first place.”
The average gift for my acquisition piece was around $74. That non-profit would have needed to acquire 82 more donors to cover the extra $6000. Could they have acquired 474 donors instead of 392? Or more? Or less?
Alas, I am still wondering.
So a final word when you’re planning your fundraising for next year.
Are you hesitating over certain fundraising budget items? If you’re wondering if you should spend the money… and if you can afford to spend the money… and if you don’t have data that tells you otherwise… SPEND IT.