Acquisition Mail on the Chopping Block? Think Again

The past year has been challenging for all nonprofits.  As the charitable universe shrinks and new donors become harder to come by, you may find yourself under pressure to find ways to reduce expenses and protect your program’s net revenues.

One historically easy target of budget cuts when fundraising programs are facing reductions can be acquisition mail. But I’m here to say “think again” about where you can cut expenses before you put your acquisition mail program on the chopping block.

Why?

While acquisition mail strategy requires an initial investment that typically does not generate positive net revenue in the first year, it plays a key role in your fundraising program. This is because it works in concert with other acquisition channels to create a balanced acquisition strategy that strengthens donor files; provides reliable, long-term revenue from loyal donors; minimizes the risks that are inherent in overreliance on any one acquisition channel; and creates a pool of planned giving prospects. As acquisition mail programs are a long-term strategy, they require a longer view to fully realize the benefits they offer.

Some of these benefits include:

• Generating new donors.

• Contacting people in a way that stands out from digital marketing.

• Responding to the natural attrition of donors by bringing in highly sustainable replacement donors.

• Adding mail-responsive donors to other programs’ audience mix, thereby bolstering additional gift and renewal mail programs.

• Increasing brand awareness.

• Generating a higher lifetime value than Passport-acquired donors for TV stations.

The chart below illustrates the lifetime value of direct mail acquisition compared to other acquisition channels through the first three years.

Additionally, it's important to note that acquisition programs typically take time to generate a net positive return. In fact, industry standards indicate it's not uncommon for acquisition campaigns to start generating a net positive return in Year 3 due to the upfront costs associated with acquiring new donors. Therefore, you need to consider this program's lifetime value when evaluating the initial investment's value. The acquisition program is like investing for retirement. The lifetime value of your retirement portfolio depends on when you start your continuous contribution. With acquisition, it is important that you continue to send mail because you will reap the benefits in Years 3 through 5.

The chart below illustrates the lifetime value of an acquisition program from Year 1 to Year 5.

So, although you may be tempted to cut back on the acquisition mail program—don’t! On the contrary, you should be exploring how to fine-tune your acquisition mail results with either new list opportunities or new creative treatments to enhance your program for many years to come.