Direct mail fundraising is a numbers game. A game that changes
all the time. Who could have predicted the advent of online
giving? Or the popularity of sweepstakes? Or the rise of a
generation of young donors whose primary method of communication
is text messaging?
When I say that the direct mail game changes all the time, I am
not referring to the fundamentals, of course. Donors will always
give to people to help people. The most important word in a
fundraising letter will remain "you." And donors will always
want to be kept informed about what their gift is accomplishing.
But the world is changing. Technology is changing. How people
give is changing. What people support is changing. How people
look at non-profit organizations is changing.
You can spot these trends when you keep an eye on your direct
mail results--your numbers--as all smart fundraisers do. Here
are some of the more important numbers to watch and manage.
1. Response rateThe percentage of your donors, who received your mailing, who
responded with a gift. Pay close attention to the appeals that
pull the best response--and figure out why.
2. Average giftYour gross income divided by the number of gifts. The larger the
better, naturally. This figure can be skewed upwards by a few
large gifts, so measure it carefully.
3. Average cost per giftYour total costs (writing, design, production, printing,
mailing, postage) divided by the number of gifts received. This
number helps you discover what to trim.
4. Return on investmentYour net income divided by your costs, expressed as a
percentage. Your chief financial officer will want to see this
one!
5. Cost to raise a dollarYour costs divided by your gross income. The lower, the better.
One of the most popular ways of measuring your success, but not
to be used in isolation since it tells only part of the story.
6. Conversion rateThe percentage of first-time donors or members who renew their
support and become (convert to) annual donors by sending you a
second gift. Drops in this figure can sometimes be attributed to
poor follow up or mailing too many solicitations (or too few)
during the 12 months following the first gift.
7. Renewal rateThe percentage of donors who renew their support each year. The
higher, the better.
8. Attrition rateThe rate at which donors do not renew their gifts each year,
usually expressed as a percentage of all active donors. High
rates can sometimes be attributed to acquisition methods that do
not attract loyal donors (sweepstakes and lotteries, for
example).
9. CPM (Cost Per Thousand)One of the most common measurements in direct marketing. Tells
you how much you must spend to communicate your fundraising
message to one thousand people. The M in CPM stands for Mille,
the Roman numeral used to represent 1,000.
More Information:Alan Sharpe is a professional fundraising letter writer, instructor, coach, author and newsletter publisher who helps non-profit organizations to raise funds, build relationships and retain loyal donors using cost-effective, compelling, creative fundraising letters. Sign up for free weekly tips like this at
http://www.RaiserSharpe.com/ 
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