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Marketplace Acquisition OverviewWhat’s hot? What’s not?
Fiona McPheePareto Fundraising
• New Donors• Where we can get them• Who they are• What’s hot and what’s not
You do it alreadyYou are new to it
The Big Difference in decision making?
New Recruits - by year
0.0
500.0 K
1.0 M
1.5 M
2007
2007
2007
2007
2007
2007
2008
2008
2008
2008
2008
2008
2009
2009
2009
2009
2009
2009
2010
2010
2010
2010
2010
2010
2011
2011
2011
2011
2011
2011
2012
2012
2012
2012
2012
2012
2013
2013
2013
2013
2013
2013
2014
2014
2014
2014
2014
2014
Recruitment Year
Recr
uits
Bequest Cash Child Sponsorship Regular Gift Event Other
New Cash Recruits - by channel of solicitation
0
200 K
400 K
600 K
2005
2005
2005
2005
2005
2005
2006
2006
2006
2006
2006
2006
2007
2007
2007
2007
2007
2007
2008
2008
2008
2008
2008
2008
2009
2009
2009
2009
2009
2009
2010
2010
2010
2010
2010
2010
2011
2011
2011
2011
2011
2011
2012
2012
2012
2012
2012
2012
2013
2013
2013
2013
2013
2013
2014
2014
2014
2014
2014
2014
Recr
uits
Direct Mail Face to Face Media Online Other Phone
New RG Recruits - by channel of solicitation
0
100 K
200 K
300 K
2006
2006
2006
2006
2006
2006
2007
2007
2007
2007
2007
2007
2008
2008
2008
2008
2008
2008
2009
2009
2009
2009
2009
2009
2010
2010
2010
2010
2010
2010
2011
2011
2011
2011
2011
2011
2012
2012
2012
2012
2012
2012
2013
2013
2013
2013
2013
2013
2014
2014
2014
2014
2014
2014
Recr
uits
Direct Mail Face to Face Media Online Other Phone
Channel•Direct Mail•Digital•Face-to-Face•Phone•Combination / Integrated
Audience•Classic (65+)•Boomers•Gen X/ Gen Y
Perspectives
CHANNELS
Direct Mail• Last few years the universe has been targeted
better and better
Cold
Co-Ops
Swaps
Better Response
Direct Mail• Last few years the universe has been targeted
better and better
Cold
Co-Ops
Swaps
Higher duplication rates
Better Response
0
200 K
400 K
600 K
2009
2010
2011
2012
2013
2014
Dono
r Vol
ume
New Donors New, but has given to other Charities
Cash Donor Recruitment - by year
Direct Mail• Last few years the universe has been targeted
better and better
Cold
Co-Ops
Swaps
Higher duplication rates
Regular Giving Conversion Potential
Impact on your retained donors
Impact on 2nd gift rates
BUTBetter Response
Direct Mail• Premiums
– Increase campaign response rates
– Campaign costs impact– Impact on initial value– Impact on ongoing value
• 2nd gift rates• Gift upgrade potential• RG conversion potential
Direct Mail• Premiums create a
type of donor:– who likes premiums– who is likely a bit
lower value– who does respond
ongoing
Test Cell RR% Av$ ROI
No Premium 16% $51 3.7
Premium 21% $46 3.7
Test Cell RR% Av$ ROI
No Premium 11.7% $49.34 4.4
Premium 13.2% $48.28 4.0
Test Cell RR% Av$ ROI
No Premium 9.6% $49.30 1.76
Premium 11.1% $46.85 1.73
Direct Mail Considerations
•18 months – plan to diversify and test from the start
Shelf life of
creative
Direct Mail Considerations
• Email & phone number collection
Data collectio
n strategy
2nd Gift rate by contact type segments
0
500
1,000
1,500
2,000
2,500
3,000
0%
10%
20%
30%
40%
50%
60%
70%
Addr1 Addr1Email
Addr1Email
Landline
Addr1Email
LandlineMobile
Addr1Email
Mobile
Addr1Landline
Addr1Mobile
Email EmailLandline
EmailMobile
2nd Gift Rate (Year 1) RecruitsBase: 2009 - 2014 Recruits
Multi-contact opportunity donors have the highest
second gift rates. No address sees much lower
conversion.
Address & Mobile potentially an age thing
0%
10%
20%
30%
40%
Pres
s Ins
erts
Phon
e
Dire
ct M
ail
TV
Oth
er
Onl
ine
Lead
Con
vers
ion
Face
to F
ace
2nd
Gift
Rate
2nd Gift Rate Donors
0
100 K
200 K
300 K
400 K
Dono
rs
Second Cash Gift - within 12 months by channel (2013 recruits)
Direct Mail Considerations
•Receipt ask packs•Timing•Adaptation of warm - for a year•Other offers e.g. Regular Giving, Virtual Gift, Advocacy
2nd gift strateg
y
Direct Mail Acquisition• Still the volume opportunity to build a warm donor base• Warm donor bases naturally decline in volume
0%
10%
20%
30%
40%
50%20
08
2009
2010
2011
2012
2013
2014
Rete
ntion
Rat
e
Retention Rate Income per Donor
$0
$50
$100
$150
Inco
me
per
Dono
r
Cash Donor Retention - by year, referenced to income per donor
Direct Mail Acquisition• Still the volume opportunity to build a warm donor base• The source of bequest prospects
Direct Mail Acquisition• Still the volume opportunity to build a warm donor base
If you aren’t doing it
•It will make you money•You need to be clear on who you are recruiting and what they need moving forwards to deliver a return •Biggest considerations are your objectives and your data
If you are currently doing it •Analyse value beyond your campaign ROI•Consider what impact your tactical decisions having past the campaign impact•Know your long game
Acquisition Proposition• You (more than likely) have more than one• With a saturated audience (regardless of channel) consider the
opportunity to test
Face to Face• It’s still growing & still the only volume option • It’s a suppliers market• Not doing it yet? Have you got what it takes?
Cash / Budget
Cause Type
PhoneRolling Cash & Lottery programs• Hard to get going – huge
investment• Long standing facing
declines• I wouldn’t try it
Lead Conversion• Strong results• Data quality & costs are key• pSMS has promise and
could drive lead volumes• I’d try it
DigitalGrowing at the fastest rate
• Still only represents less than 12% of new recruits
Direct to donation is hard
• Big emergencies are an exception – are you ready?
Integration is all the rage
Two step is making in roads
Start with warm – spin off
acquisition opportunities
Two Step Digital
• Bigger potential audience then cold direct to donation
It’s a numbers game
Types of Two Step
Digital lead to Phone
Digital lead to Email
Street lead to Phone (Field Marketing)
SMS lead to Phone
Two Step• Online leads converted via Phone
– 10% - 15% of F2F volume max potential– Some charities are doing incredibly well– Quality of leads critical– Cost of leads varies – you can generate your own– Phone agency skill @ conversion– 10% non-starters (vs. ~20% F2F) but you pay for them (unlike
F2F)
DigitalLearn from warm
Cause / proposition critical
Landing page, landing page, landing page
Get creative
Other Channels
TV•RG for ROI•Overseas & Environment•Has potential for right cause•Be prepared to invest to test•Use the experts
Inserts•Great ROI with right media•Proposition & execution key•Nice low volume, background channel
Others•Part of integrated strategy not stand alone
AUDIENCE
What audience will fulfil your longer term needs?
• Regular Giving– Who converts?
• Middle Donors– Where do they come
from?$100 / $1,000• Bequests
– Highly engaged supporters
Are the best audiences saturated?• For some
– Best premiums to the best swapped names (65+ market)• 80% duplication rates• Each time you swap you risk money in warm• Facing the need to look elsewhere• But if you have not done it yet …
– Previous best regions for F2F becoming harder• More competition• Exposure over time• Reducing quality
GenerationsCivics / Seniors Boomers Gen X Gen Y
Current Age 71+ 52 - 70 36 - 51 21 - 35
Giving Behaviours • 80%+ give• Most likely to give
cash• More likely to
donate goods
• 70%+ give• Most likely to do
payroll giving• More likely to support
peer-to-peer
• 70%+ give• More likely to
fundraise• More likely to
advocate• Technology savvy
• 50%+ give• More likely to
fundraise• More likely to
advocate• Technology driven
Where are we acquiring them?
• Direct Mail• Phone• Door to Door
• Direct Mail• Phone• Face to Face / Door to
Door• Two Step Digital• Peer-to-Peer
• Phone• Face to Face• Two Step Digital• Peer-to-Peer
• Face to Face• Two Step Digital• SMS• Peer-to-Peer
Life stage affects propensity to give – younger people establishing careers, holding debt, having families are less likely to give
GenerationsCivics / Seniors Boomers Gen X Gen Y
Current Age 71+ 52 - 70 36 - 51 21 - 35
Giving Behaviours • 80%+ give• Most likely to give
cash• More likely to
donate goods
• 70%+ give• Most likely to do
payroll giving• More likely to support
peer-to-peer
• 70%+ give• More likely to
fundraise• More likely to
advocate• Technology savvy
• 50%+ give• More likely to
fundraise• More likely to
advocate• Technology driven
Where are we acquiring them?
• Direct Mail• Phone• Door to Door
• Direct Mail• Phone• Face to Face / Door to
Door• Two Step Digital• Peer-to-Peer
• Phone• Face to Face• Two Step Digital• Peer-to-Peer
• Face to Face• Two Step Digital• SMS• Peer-to-Peer
Our donors are changing - meet Margaret
She has a Facebook and looks regularly
Has an email address and keeps in contact with family and friends
Visits magazines and special interest sites online forums etc.
Uses Skype to keep in contact with family overseas
Still reads printed Newspapers
Responds well to traditional Direct Mail
Connect with professional networks via linked in
Generations• Civics / Seniors were hot but now huge pressure on them
– Before you look at acquisition → retaining and growing those you already have is more valuable
• Boomers looking hotter– Bought in the 80’s, wealth now with less intention to have any left– Life-stage for giving
• Gen X & Gen Y are hot and cold– Volume recruitment opportunity– Low commitment – what percentage are still there 4 years later?– Want transparency and control
Generations• Who do you need and why?
– $$ now– Voices now– $$ increasing into the future– Increasing number of voices– (Ongoing) participation– Big bequest pay days down the track
Regardless of GenerationMore channels =
More opportunity
They use multiple channels but in varying degrees•Some for responding•Some for consuming
Establishing channels early
is better
You can increase channel
penetration
TO THINK ABOUT
Measuring ROI / Value beyond the campaignltv2014
Warm Costs Contact % Pack/Call Postage F2F cost Total costCash program 100% $1.50 $0.41 $0.00 $1.91 1F2F RG 90% $0.00 $0.00 $15.00 $13.50
1 $0 $0 $0 $435,000 $0 $0 $0 $0 $371,000 $806,000 EOYR 100% $1.00 $0.41 $0.00 $1.41 Ongoing DM Ongoing Premium2 $0 $0 $0 $1,000,000 $0 $0 $0 $0 $314,433 $1,314,433 RG Conversion 50% $12.00 $0.00 $0.00 $6.00 100% 100%3 $0 $0 $0 $1,000,000 $0 $0 $0 $0 $314,433 $1,314,433 RG Prem Conv 35% $12.00 $0.00 $0.00 $4.204 $0 $0 $0 $970,000 $0 $0 $0 $0 $314,433 $1,284,433 RG Servicing 100% $10.00 $1.105 $0 $0 $0 $940,900 $0 $0 $0 $0 $314,433 $1,255,333 6 7%6 $0 $0 $0 $912,673 $0 $0 $0 $0 $314,433 $1,227,1067 $0 $0 $0 $885,293 $0 $0 $0 $0 $314,433 $1,199,726 Activity Cash Resp RG Resp Cash Ave RG Ave Year 1 ROI8 $0 $0 $0 $858,734 $0 $0 $0 $0 $314,433 $1,173,167 DM Cash 2.000% 0.000% $35.00 $0.00 0.00 39 $0 $0 $0 $832,972 $0 $0 $0 $0 $314,433 $1,147,405 DM Cash Prem 8.000% 0.000% $33.00 $0.00 0.98
10 $0 $0 $0 $807,983 $0 $0 $0 $0 $314,433 $1,122,416 F2F RG 1 0.000% 90.0% $0.00 $30.00 0.00F2F RG 2 0.000% 95.0% $0.00 $35.00 0.00 3
Cash Inserts 0.500% 0.000% $66.00 $16.00 0.00
RG Inserts 0.000% 0.080% $66.00 $16.00RG O/L leads 0.000% 7.000% $0.00 $15.00 0.00
Expenditur Acq Warm Conversion Net Inc Expenditure Gross Inc Net Inc Cash RG C DRTV 0.000% 0.011% $0.00 $23.80 0.00Year 1 $889,741 $307,882 $195,561 $5,901 -$380,396 $889,741 $509,344 -$380,396 9,330 0 #Year 2 $1,731,570 $707,775 $762,142 $53,457 -$208,196 $2,621,310 $2,032,718 -$588,592 30,777 0 # F2F 1 F2F 2Year 3 $1,871,288 $707,775 $1,779,769 $108,514 $724,769 $4,492,599 $4,628,776 $136,177 52,225 0 # 10% 15%Year 4 $1,919,230 $686,542 $2,533,135 $154,376 $1,454,822 $6,411,829 $8,002,828 $1,590,999 73,029 0 # DM Cash $0.80 $0.60 $0.00 $1.00 $1.42Year 5 $1,961,149 $665,945 $3,235,135 $193,281 $2,133,213 $8,372,978 $12,097,190 $3,724,212 93,210 0 # Prem DM Cash $1.15 $2.50 $0.00 $1.00 $3.73Year 6 $1,988,702 $645,967 $3,879,553 $226,074 $2,762,892 $10,361,679 $16,848,783 $6,487,104 112,784 0 # F2F RG 1 $0.00 $0.00 $300 $5.00 $304.50Year 7 $2,006,202 $626,588 $4,469,475 $253,498 $3,343,359 $12,367,881 $22,198,344 $9,830,463 131,772 0 F2F RG 2 $0.00 $0.00 $321 $5.00 $326.05Year 8 $2,015,024 $607,790 $5,010,120 $276,212 $3,879,099 $14,382,905 $28,092,467 $13,709,563 150,190 0 Cash Inserts $0.00 $0.25 $0.00 $1.00 $0.26Year 9 $2,015,275 $589,557 $5,530,781 $294,801 $4,399,864 $16,398,179 $34,507,606 $18,109,427 168,055 0 RG Inserts $0.00 $0.25 $0.00 $1.00 $0.25 2Year 10 $2,007,211 $571,870 $6,065,690 $309,779 $4,940,127 $18,405,391 $41,454,945 $23,049,554 185,385 0 RG O/L leads $2.50 $14.00 $0.00 $5.00 $9.85
DRTV $0.02 $4.64 $0.00 $5.00 $0.02 0 10
Lowest net income point is -$1,086,273 in Month 25 00
Expenditure Expenditure Gross Inc Net Inc
Year 1 $1,388,265 $1,388,265 $8,172,618 $6,784,353Year 2 $2,214,230 $3,602,496 $16,872,419 $13,269,924Year 3 $2,332,930 $5,935,426 $26,364,384 $20,428,959Year 4 $2,356,176 $8,291,601 $36,404,320 $28,112,718Year 5 $2,361,754 $10,653,356 $46,984,482 $36,331,126 Acquisition Breakeven Month is Month 36Year 6 $2,374,895 $13,028,251 $58,028,944 $45,000,693Year 7 $2,379,255 $15,407,506 $69,493,066 $54,085,559Year 8 $2,376,086 $17,783,593 $81,336,743 $63,553,150Year 9 $2,365,386 $20,148,979 $93,548,535 $73,399,557Year 10 $2,347,313 $22,496,291 $106,150,657 $83,654,366
Year F2F RG F2F RG 2 Cash DM Cash DM Prem
Thankyou Total cost
Executive SummaryAcquisition
Cumulative DonorsCumulative Annual Income
Pack/Call Cost F2F Cost
Warm DM Program
RG Conversion in month
F2F Attrition
Bequest Income
Major Donor Income
Cash Inserts RG Inserts RG O/L leads DRTV Fixed Costs Total
Acquisition Spend
$11,464,121$11,843,677
Non Starter Rate
Gross Income$8,172,618$8,699,801$9,491,965
Acquisition + Existing Annual Income Cumulative
DRTV Attrition
O/L Lead Attrition
Acq Costs Lists and Post
$12,211,793$12,602,122
Net Inc$6,784,353$6,485,571$7,159,035$7,683,760$8,218,408$8,669,567$9,084,866$9,467,591$9,846,407
$10,254,810
$10,039,936$10,580,162$11,044,462
0.6 0.91.4 1.8 2.1 2.4 2.7 2.9 3.2 3.5
0.000.501.001.502.002.503.003.504.00
Year1
Year2
Year3
Year4
Year5
Year6
Year7
Year8
Year9
Year10
NewROI by Year
-$2.0
$0.0
$2.0
$4.0
$6.0
$8.0
Year1
Year2
Year3
Year4
Year5
Year6
Year7
Year8
Year9
Year10
Mill
ions New Income by Year
Net Income Gross Income
0.6 0.8 1.0 1.2 1.4 1.6 1.8 2.0 2.1 2.3
0.00
0.50
1.00
1.50
2.00
2.50
Year1
Year2
Year3
Year4
Year5
Year6
Year7
Year8
Year9
Year10
Cumulative New ROI by Year
-$10.0
$0.0
$10.0
$20.0
$30.0
$40.0
$50.0
Year1
Year2
Year3
Year4
Year5
Year6
Year7
Year8
Year9
Year10
Mill
ions Cumulative New
Income by Year
Net Income Gross Income
$0$200$400$600$800
$1,000$1,200$1,400
Year1
Year2
Year3
Year4
Year5
Year6
Year7
Year8
Year9
Year10
Thou
sand
s Est Major Donor Income by Year (new Donors)
Est MD Income
$0
$500
$1,000
$1,500
$2,000
Year1
Year2
Year3
Year4
Year5
Year6
Year7
Year8
Year9
Year10
Thou
sand
s
Est Bequest Income by Year (new Donors)
Est Bequest Income
0.001.002.003.004.005.006.007.008.009.00
Year1
Year2
Year3
Year4
Year5
Year6
Year7
Year8
Year9
Year10
Combined Cumulative ROI by Year
$0.0
$20.0
$40.0$60.0$80.0
$100.0
$120.0
Year1
Year2
Year3
Year4
Year5
Year6
Year7
Year8
Year9
Year10
Mill
ions Combined Cumulative Income by Year
Gross income Net Income
-$5.00
$0.00
$5.00
$10.00
$15.00
$20.00
$25.00
1 6 11 16 21 26 31 36 41 46 51 56 61 66 71 76 81 86 91 96 101
106
111
116
Mill
ions Acquisition Breakeven Month is Month 36
Lowest net income point is -$1,086,273 in Month 25
• ROI 1 year and 5 year– Consider ALL
costs– Consider ALL
income
Direct to Bequest
Different Quality Donor Groups
Lower volume for better
quality
Higher Volume for bigger
prospecting pool
High Value recruitment
THANK YOU
Fiona [email protected] Twitter: fimcpheePhone: +6421 336 905Web: www.paretofundraising.com
