F&P asked a panel of four of Australia’s leading nonprofit fundraisers to “spill their guts” on their donor acquisition experiences and strategies. The result is a fascinating read!
Verna Simpson, director, Humane Society International
Is one-off gift direct mail acquisition dead?
Definitely not. These donors often become major givers or bequest prospects and are also likely to become monthly givers once they trust your organisation.
What are your biggest challenges around acquisition?
Defining who the target audience is and then finding a way to reach them. A scatter gun approach is too costly so you have to direct your marketing to people who align with your donor profile. Unfortunately all charities tend to dip into the same ponds because, frankly, givers are givers so it is not unusual to find 6 or more charitable asks fall out of your subscription magazine.
What acquisition strategies have been working for you?
Face-to-face fundraising is a strong tool, but with hefty upfront costs most organisations are limited by their cash flows. We also do direct mail, letterbox drops, community service ads (CSAs), brochures distributed by members through their businesses or community involvement, and the web.
Why do you think they worked?
Because we always analyse our responses, and after years of looking at the value of a donor by how they were acquired, we have built up a knowledge of break even and long-term profit and loss linked to method of acquisition.This is vitally important for the long-term health of a donor base as we can project the life and donation potential of new donors based on how they were acquired.
Will you be trying any new acquisition strategies in the short to medium term?
We will be putting more effort into web acquisition as these donors tend to give more and the cost is relatively small compared to other methods. We will tandem this with a range of media inserts, TV ads, direct mail and face-to-face. We are always looking for opportunities and are poised to make quick decisions if the need arises.
Sharyn Tidswell, direct marketing manager, Wesley Mission
Is one-off gift direct mail acquisition dead?
No. It depends on your objectives. Plenty of research and experience shows that regular givers have higher lifetime value, but not everyone gives in that way. A strong program of one-off acquisition with effective follow-up can reap some very nice results.
What are your biggest challenges around acquisition?
Having time and money to do all I want to do – and the patience! Acquisition takes dedication and persistence, and being open to options.
Finding suitable lists with enough names is a constant challenge. Some lists have gone off the market. However, “list swaps” and data cooperatives are gaining support and opening up more opportunities.
The other challenge is in educating people that acquisition is investment. If a business spoke about spending money to get a new customer on board (with a view to the person becoming a repeat customer), people understand. If a charity talks about spending money to get a new donor on board, some people think you’re wasting money. Acquisition is essential for building a solid sustainable revenue stream.
What acquisition strategies have been working for you?
Face-to-face fundraising has been good for us even though attrition is high. Direct mail results have improved dramatically over the years as we test and refine lists, mail packs and timing.
Why do you think they worked?
With face-to-face, finding something specific that connects strongly with the average person on the street has helped – Wesley Mission is a huge organisation that helps more than 200,000 people in a variety of ways, and yet what we do touches everyone’s life.
With direct mail, success has come with a consistent process of testing and refining, with a fair dose of creativity and a personal touch. Data profiling has worked very well to find people who look like our donors; this has also expanded our list options. It’s important to remember not to neglect your donors once you get them on board – most of us could improve in this area.
Will you be trying any new acquisition strategies in the short to medium term?
Yes, I plan to increase our acquisition activity. We’ll investigate use of the phone for initial acquisition and/or follow-up, and friend-get-friend options. Further data matching opportunities will also be pursued. My approach has been: start with what you can manage, test, refine, reinvest and expand your acquisition strategies as resources grow.
Tracey Campbell, national marketing manage, WWF Australia
Is one-off gift direct mail acquisition dead?
Was it ever alive? Acquisition campaigns have always tried to secure supporters who are most likely to deliver an ongoing return, i.e. repeat support. The objective was never ‘one-off gifts.’ However, as many as 60% of new supporters never make a second gift.
Acquisition strategies have to focus on the potential lifetime value of supporters, which is challenging when most fundraisers work to annual targets and pressure to demonstrate a return on investment within the constraints of a financial year.
Fortunately, progressive nonprofits and their boards are realising the importance of long-term, planned income streams. We are moving away from immediate payback acquisition models to long-term, sustainable income sources with acquisition strategies planned over a number of years, which deliver a much healthier return on investment.
What are your biggest challenges around acquisition?
The costs of some channels have increased dramatically in the past couple of years, resulting in a longer period before the return comes in. In some cases, for example TV, the costs are becoming almost prohibitive.
With direct mail the main issue is finding enough effective lists that deliver good, high quality responses. As the sector has become more sophisticated and employed more direct response professionals, the competition for good, profiled lists has increased.
For face-to-face the challenge is managing attrition of supporters effectively. Using predictive modeling, we focus on maintaining and deepening our relationship with supporters who are the least likely to attrite. This means we can allocate retention expenditure where it is going to have the highest impact.
What acquisition strategies have been working for you?
WWF’s acquisition objective for the last four years has been to build a strong base of regular, monthly supporters to provide a steady, predictable income source. Face-to-face and direct mail have been the most successful channels in meeting this goal.
Why do you think they worked?
WWF’s board and senior management team shared the vision that investment in building a large base of regular, monthly supporters was vital for the organisation’s growth.
A few years ago, our fundraising income came from a small number of high value donors. Now WWF has a large number of supporters giving smaller amounts and our risk has been diversified. This income source has enabled the organisation to undertake new conservation initiatives.
Will you be trying any new acquisition strategies in the short to medium term?
Acquisition is one of the most exciting parts of being a fundraiser. You always have to have your eye on the marketplace – what’s worth testing, who’s doing what, where, and was it successful. We will be exploring channels that we have been less visible in previously, for example online. This is still a relatively untapped media in Australia, and one that promises to deliver cost-effective acquisition.
As fundraisers our job is to challenge the status quo, to continually strive for improved returns on investment, and to keep our eyes and minds open to innovative strategies that will bring in even more income to support our organisations’ missions.
Simone Williams, direct marketing manager, Cancer Council NSW
Is one-off gift direct mail acquisition dead?
Our one-off ask mail packs are not performing effectively any more on cold acquisition, however we still have success with these packs on cross-sell and warm acquisition. Our pledge acquisition mail pack continues to perform effectively and consistently in recruiting low attrition pledgers and new one-off gift donors from cold lists.
What are your biggest challenges around acquisition?
The major challenge is to find a cost effective way to reach potential supporters, particularly those who will feed your bequest prospect pool.
With direct mail the challenge is prospecting from a shrinking and saturated prospect list universe. We are currently analysing the lifetime value (LTV) of one-off donors recruited through this channel to determine whether to invest more in this area.
We are having great success with face-to-face and have acquired significant numbers of pledgers. The problem with this channel is managing the higher rates of attrition.
What acquisition strategies have been working for you?
Face-to-face fundraising has been the most successful strategy – our database has grown significantly in the 3 years we have been recruiting via this channel. We have well developed upgrade and donor servicing strategies that are ensuring we see excellent returns for the investment in this channel.
This year we have been able to invest $10 million in cancer research, this would not have been possible without the success of the face-to-face program.
Our ‘in memory’ giving program and workplace giving program have also worked well.
Why do you think they worked?
Our research has shown that people give via face-to-face because they were asked to. In focus groups we have heard people comment that they had always wanted to give to our cause, but had not ‘got around to it’. A team of passionate and committed advocates is another key to having a good face-to-face program.
‘In memory’ works because the donor has a strong connection to our cause, and workplace giving is effective because it is an easy way to support, with tax benefits.
Will you be trying any new acquisition strategies in the short to medium term?
We will be retrying pledge acquisition via TV with some changes to the ask levels and some learnings from our friends at Cancer Research UK. We feel that this channel should work for our brand given its mass appeal.
We will continue our segment development and cross sell plans. Our organisation comes into contact with so many people every day through our local networks, events, retail outlets etc, and we have had success in developing relationships through from one point of contact to multiple points of contact. Finally, we will be learning more about data cooperatives.
