Like all list owners, nonprofit mailers need to maximize their list revenue opportunities. List rental can be a profitable, stable segment of your bottom line, and there are many factors to review when managing your program.
The road to revenue growth begins with a simple decision, one that many nonprofit mailers struggle with: Should we have our file on the market? The concept of renting or exchanging your names may be foreign, so let’s offer some perspective. Put the revenue opportunity aside for a moment and consider the usual objections to releasing a file for rental.
Remember that your donors get mail every day from a variety of mailers. By not releasing your names for rental, you miss this chance to generate more revenue from your house file.
To the objectors, I would cite the basic principle of direct marketing: Test it first. Run a comparative sample of “protected” names against those that were included in your list rental orders. Many groups have found that the names they rented actually outperformed those they protected in their own renewal efforts.
Other benefits are easily ignored when considering this issue. If your names are unavailable, someone may be less inclined to approve your rental of their names. This reciprocal access to like segments is one of the reasons for putting your names on the market. List exchanges also bring increased savings to your acquisition program and provide a further benefit to releasing your file.
So, if you’re struggling with the issue of releasing your names, maybe a few ideas will help your decision.
Power of enhancements. Plenty of data is out there to apply to your donor file. Know the source of this data, and reach the key markets as a result of this overlay.
You easily can add demographic, psychographic and religious/ethnic data to your house file. The process is relatively simple, and in return you get a full profile of your donor base. Applying this data to your rental file also can increase rental opportunities with interest-specific mailers, but at what cost?
Pursue “no upfront pricing” deals, making the mailers pay as the data are ordered. Ensure you’re offering the full range of selections. In addition, data enhancements give you a unique chance to learn more about your own donors. This will confirm a lot about what you know about your donors, but it also can reveal certain pockets of names, by category, that will respond better to your offer. And learning more about your supporters is always wise.
There are several operating principles when considering exchanges. Accurate, monthly balance reports are a must. You need to monitor your balances order by order, reviewing new exchange requests against your own upcoming mail planning.
Pursue reasonable exchange fees from your list manager, as they should charge the same fee for rental orders or exchanges. Also, watch for exchange opportunities with test mailers as well as continuation orders.
Exchanges represent a strong opportunity to reduce your acquisition costs, so take full advantage of this program.
Should you cap the gift amount on the rental file? Most nonprofit organizations cap their rental files at $49+ donors or $99+ donors. Though this provides a benefit by protecting your higher-dollar customers, it also depends on your average gift amount. Pick a level slightly higher than your average, yet still protective of your higher-dollar donors.
Offer dollar selections, like $5+, $10+ and $25+. Whether you base the criteria on last gift or cumulative total, this still lets you develop your higher-dollar donor with your own programs. You also can develop like relationships with certain lists, by exchanging files of $10+ donors, for example.
Data card management. Review the body copy of your data card regularly, checking the average gift, editorial copy and other statistics. Include your Web site address for more information about your organization. The data card is your central promotional tool, so keep it as updated as possible.
Offer hotlines to out-of-market mailers, a point especially relevant to the nonprofit list trying to break into commercial markets. Also consider base price breaks for out-of-market mailers to help close test orders from these categories.
More copy is better with the keyword-enabled searches now available to our brokers and mailers. Review data card body copy to ensure you get as many hits as possible when searched. Also consider splitting successful segments into separate data cards, as the more ways your list can be pulled in a search, the better.
Modeling? Be prepared for the prevalence of in-house modeling, and be open-minded to the concept of pricing deals to close model orders.
Data enhancements lead to this opportunity, as the more data you have on your donors, the better the model performs. Larger files are still the best prospects for this approach, and you need to make pricing deals in this market, especially with out-of-market mailers.
Pursue quantity commitments instead of flat model fees. Most list owners will work with you to establish minimum test quantities in exchange of model-building fees. This is a great way to reduce your costs, and you should take full advantage of this with your own model mailings.
Negotiating 101. Pursue reciprocal deals on like segments when considering a deal request. Nothing new here, but any deal you give, you should get in return. Say “no” sometimes as a list owner.
Review computer verification for new deal requests. If a mailer requests a 60 percent net, but the mailer is netting near 70 percent, you should have that data involved in your decision. Also, rebill all net deals that come in higher than the agreed net, for the balance of money owed.
Finally, consider the value of the free test, as the real money lies with the continuation order anyway. Taking a small hit on test revenue may benefit in the long run, especially with out-of-market mailers.
More ideas. Mail date protection begs the question – why? Again, your donors get mail every day, so what are you really protecting? If you must protect your mail dates, limit it to a week before and after your mailing. Consider a test as confirmation that this is reasonable, and without risk to your own renewal and upgrade efforts.
Other trends we see include more exchanges, more deal making (almost order by order now) and more upselling and cross-selling required of list managers to hit budgets.
Less retesting occurs than even a few years ago, so your first test order must do well to get the mailer to continue.
Fewer lists have pseudonyms, as most mailers have realized the benefit of promoting the good name of your organization. This also leads to less confusion in the list marketplace when mailers identify themselves more clearly.
Hopefully, you now have a few practical ideas to apply to your list rental program. Some dated concepts need revisiting, but our industry is always testing new concepts, pushing the limits of conventional thought and breaking new ground. This has long been the trademark of direct marketing, and new thinking needs to continue in the future.
Your list management program should be a dynamic, growing source of revenue. Closely manage your business and work with your list manager to achieve your goals for list rental revenue.