Expand Market With Mail-Order DataIs the propensity for an individual to purchase through mail-order catalogs correlated with a predisposition to support nonprofit causes? The answer is a resounding "Yes."
The numbers are in, and nonprofits are reaching outside their core donor market and drawing on mail-order buyers to access a new source of responsive names. Comparing mail-order buyers' purchase history against fundraisers' donor-file attributes is yielding prospective donors who are highly responsive and cost-effective to mail.
Historically, fundraisers have successfully used mail-order catalog lists that have an affinity to the organization to expand their core donor market. For instance, cultural organizations often rent museum catalog lists, and environmental causes might mail to lists from outdoor apparel catalogs. But with the advent of sophisticated mail-order databases, even organizations that don't have an obvious affinity to any catalog list can identify and access responsive names.
When Jennifer Jones, director of direct marketing at the American Society for the Prevention of Cruelty to Animals, decided to expand the organization's donor base, her list consultant The Coolidge Co. suggested Abacus Direct. In the past, the ASPCA had used lists from catalogers, but as Jones acknowledged, "It was hit or miss."
Abacus created a model for the ASPCA that identified individuals most like the organization's donors. Test mailings were sent in October to the two geographic areas, and the results were impressive. The New York City test yielded a response three times greated than usually received, while the national test netted a response that was two times greater than usual. Jones said she typically received a 1 percent response from a catalog list.
"We were so pleased with the results from the fall tests that we have decided to go further into the model for our spring campaign to reach a broader universe of individuals," Jones said. "The thing that really made the difference for us is the model. In running the model, Abacus found the group of individuals within many lists most like our current donors."
In the past, the ASPCA had searched for new donors by using house files of nature, outdoor, pet-supply and environmental catalogs.
"It was not a scientific way to find donors," Jones said. "Abacus' data gives us a whole new universe of names. The test was very successful -- we even made money, which is very rare in an acquisition program."
At Comic Relief, fundraising efforts to aid the homeless are no joke. For more than a decade, this nonprofit organization has hosted annual HBO specials in which comedians raise awareness and money to aid the cause. Viewers can call the organization's toll-free number to contribute and receive a T-shirt or sweatshirt. A follow-up direct appeal is mailed to donors to generate additional gifts.
David Bryant, vice president of Craver, Mathews, Smith & Co. (CMS), the response agency for Comic Relief, used the Abacus Alliance database to identify TV supporters who also are direct mail responsive.
"Comic Relief has received enormous support from over 900,000 donors over the past 10 years, who have responded to the TV specials. At CMS, our goal was to help Comic Relief launch a direct response program that would build on the success of the HBO specials," Bryant said. "Working with Abacus, we conducted a test of the donors from the 1994 show and matched them against the Alliance database. We then mailed to matches and nonmatches alike. Managing a direct response program is like mining for gold -- you want to maximize response by mailing to the best donors while exploring less obviously productive veins by sifting through the data to discover donors who might be equally responsive."
The results were impressive. Forty-six percent of the 116,000 respondents to Comic Relief's 1994 HBO special were identified as "buyers." The buyers group achieved a response rate that was more than three times greater than that of the nonbuyers group. Working with Abacus Direct, Comic Relief identified a file segment that is highly responsive and more cost-effective to mail. This allows the organization to save money and create a more profitable direct mail appeal program.
"We used Abacus as an enhancement tool, and the plan is to enhance more names in the future, including donors to Comic Relief's upcoming HBO special that will air June 14 from Radio City Music Hall," Bryant said. "At CMS, we work with organizations that collectively have over 5 million donors, including Habitat for Humanity, Amnesty International and the Christian Children's Fund. This test with Abacus has been one of the most exciting analyses we have conducted recently, and we see great potential to offer this service to numerous other large mailers."
The Abacus Alliance consists of member mail-order companies who share their recency, frequency, monetary (RFM) transaction data that reveals every household's mail-order buying history, which is used to predict future purchasing behavior. Although RFM data is extremely predictive, it is the collective data that gives the database its strength. The mail-order-buyer database leverages information from all members and provides fundraisers with access to the pooled resource.
Recency is a factor that enhances results, as is frequency. Households that donate to multiple organizations are the most receptive and best responders. The collective nature of a membership database creates many "multis." Monetary value can be measured by the dollar amount of last, cumulative and average orders and the lifetime expenditures of a household, which all help pinpoint various target markets.
Working with Abacus Direct, the ASPCA and Comic Relief successfully used mail-order data to enhance their direct mail programs.
It took some years for catalogers to recognize the value of sharing transaction data and utilizing statistical modeling to enhance prospecting and customer development programs, but today most catalogers appreciate this valuable resource. And increasingly, fundraisers are proving that shared transactional mail-order data enhances their direct mail programs.
Sue Gloeckner is senior director of fundraising services at Abacus Direct Corp. She can be reached at email@example.com.