file growth

Quantity vs. Quality

Direct mail fundraisers have struggled for years to find the balance.

How deep in the file can I afford to mail?

More responsive segments will generate more revenue per piece mailed than it costs to mail; less responsive segments will not. Risk mailing too far past breakeven and the entire effort loses money. Mail too conservatively, and you leave dollars–and active donors–on the table.

With the lower incremental cost of email, digital fundraisers may not feel the same pressure.

But they’d do well to pay attention.

Consider the snapshot below.

In year one, this organization brought on the names of supporters for whom it already had email addresses. A respectable 3.25% of those new names made a donation.

In year two, far fewer new names came on (95% fewer!), but the percentage who donated was much higher.

In subsequent years, as efforts to build the file expanded, the likelihood of securing a first-year donation  from that new name has gone down.

Does this matter? (Especially if total revenue is going up as well?)

It may, but it’s just one indicator. Open and clickthrough rates have also declined, even though total opens and clickthroughs are up.

Thus, the more critical question: “What are you watching? And why?”

While file growth is a worthy objective, I would caution that higher file numbers may add a noise factor that can distort what’s really happening with the core supporters. Which means you'll need to look further than overall averages ... particularly if you want to meet the information needs of the people who matter most!

Do you consider what quantity vs. quality means for your file?

Should you try an email append?

It would seem logical:

  1. Mailing costs are rising but response is going down. 
  2. Online giving is growing and email avoids the most expensive elements of production. 
  3. What could make more sense than to move mail donors online?

Granted, there can be many good reasons to supplement your mail plan with online communications. But it’s seldom as direct and immediate a payback as the companies that provide email append services would have you believe.

An email append is when you add an email address to a constituent record in your database. This is done by merging your list of known supporters – those for whom you don't have email addresseses – with a broader database that includes those addresses; in cases where the records match, their email address can be added to your record.

But now, things begin to get a bit complicated.

Before returning the enhanced record to you, the service must first contact the address to let the individual know you also want to communicate with them by email.

There are three possible responses:
• the individual can opt in (“Yes, I want to receive email from xyz.)
• the individual can opt out (“No, I do not want to receive email from xyz.)
• or the individual can not respond.

(In one client’s recent append, 5% of the names opted in, 10% opted out and 85% did not respond.)

Clearly, you can email the opt ins and can not email the opt outs. But what about the non-responders?

Again, it’s a bit murky.

While these individuals didn’t opt in, neither did they technically opt out. Presumably, if this is your database of known supporters, you have a relationship with these individuals. Once they’ve been given the opportunity to opt out, you are CAN-SPAM compliant … or so the service bureau will argue.

And, by the letter of the law, this may be true. But in the spirit of the law – not to mention the spirit of honoring donor preferences – your stand may be more tenuous.

Regardless, you should consider that initial non-response an indicator of future involvement. For the append mentioned earlier, fewer than half of the non-responders opened an email in their first year on file. Fewer than 10% clicked on a link.

It took almost nine months, but donations from this group eventually did cover the cost of the append itself. But to call that breakeven would assume no additional costs for data management or to send additional emails.

Bottom line: the email append did add names to the file. We were able to engage some of those constituents and some have become online donors.

But it’s certainly no panacea.

In fact, I think with the same time, effort and expense, a more genuine outreach to build the file organically would deliver a better return. Certainly not in terms of the number of names added immediately. But unquestionably in terms of engagement.

And it's our engaged constituents who provide long-term financial support.