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Winning Campaigns This Month
Direct Mail - Cost-Cutting Techniques
By J. Scott Faircloth
It appears to be the perfect storm for direct mail fundraisers in 2008. The economy is down, response rates are seemingly stagnant, and costs are up across the board. Taken at face value, that certainly does not sound like a good combination to undertake a successful direct mail fundraising campaign. And, admittedly, it is human nature to become discouraged when faced with adversity. However, my first hand experience has confirmed that with adversity comes opportunity – and the current direct mail fundraising climate is no exception to this axiom.
The truth is, anyone who has taken Business 101 knows that one way to make a company or venture survive in tough times is to simply cut costs. The fragile balance and enigmatic question that emerges, however, is “How do I cut costs without sacrificing the service my customer expects?” The same holds true for any direct mail campaign. Here are 4 simple ways to “reduce” costs without sacrificing the lifeblood of a direct mail campaign – that is, the “results”:
Print Bidding
I realize that for many reading this article, this might be considered obvious. However, I am amazed at the number of candidates and organizations that simply do not take this easiest of steps. Bidding to multiple vendors ensures that you are receiving the lowest market price for your campaign. Additionally, bidding out the pieces of your job separately to specialized vendors (envelopes, printing and mailshop), as opposed to utilizing a “full-service” shop, can save you as much as 25%. Often times, convenience or inexperience will dictate the usage of a full service printer. However, having multiple bids in hand from the specialized vendors will give you ammunition to ask the full service vendor to match your price.
Reduce Postage
I will never understand why the Postal Service seems hell bent on killing its cash cow (direct mailers) by constantly increasing postage rates and placing more and more regulations on what can and can’t be mailed. Having said that, there are some ways to take advantage of these very regulations to reduce the postage expense. It is common knowledge that every mailer should take advantage of the bulk mailing and address compliance discounts. However, there are other lesser known ways to reduce postage costs. One such way is called “co-mingling.” In short, with co-mingling, your mail is processed and sorted alongside other mailings of similar size allowing your mail to qualify additional bulk discounts offered by the Postal Service. Depending on the quantity you are mailing, co-mingling has the potential to save you significant money.
The good news is that the cost savings associated with “co-mingling” is predicated upon large volumes. Thus, most vendors that specialize in this service have a vested business interest in working with your existing preferred mailshop or print vendor. Therefore, no special arrangement is needed – simply ask your mailshop of choice whether your existing volume of mail could benefit from the cost savings associated with this process. If that answer is “yes”, any competent mailshop will be able to partner with a vendor that specializes in “co-mingling” and be able to provide this service to you.
Clean Your Data
With the postage and cost increases, bad addresses have become more costly than ever. As such, it is imperative that a direct mail fundraising effort be more proactive than ever and complete an NCOA (National Change of Address) for each and every mailing. In addition, all USPS deliverability requirements should be completed at that time, including CASS certification, LACS and Zip+4. If your mail goes to the wrong address – that’s not only wasted money… but you also lose that potential donors support. The end result, of course, is a reduction in costs accompanied by an increase in contributions.
Let’s take the example of a 100,000 piece prospect mailing at bulk rate that has a total cost of .50 per piece. For the sake of this example, let’s say it generates a 2.5% response rate and $35 average gift. Let us also assume that the data has not been NCOA’d in the last 12 months and there is a “bad” address rate of 5%. As bulk mail is rarely forwarded, that means that 5,000 pieces never made it to their destination. At .50 per piece, that is a “loss” right out of the gate at $2,500. Now, also consider that those potential donors never got the opportunity to donate to your candidate. At the 2.5% response rate and $35 average gift threshold in this scenario, that is an additional $4,375 in potential contributions. So, in this example, not utilizing list “cleaning” snowballs into a $6,875 mistake! While this is an extreme example, it does illustrate the “economics” and detriments of using data that is not fully up to date.
With turnaround times of one business day and a cost of just a couple of dollars per thousand records, list cleaning is one of the most convenient and productive ways for mailers to reduce costs and increase donations. Again, your preferred mail shop or full-service print vendor can provide this service for you. If you are doing your mail in-house, the website listcleanup.com is a great place to start. Additionally, a new website offering free list cleaning (listelixir.com) is scheduled to make its debut in May 2008.
Build an “Affinity” File
Unfortunately, this option is not available to all candidates. However, if your candidate is nationally known or has a large following, consider allowing him or her to “sign” mail for other like-minded organizations. By utilizing this high-profile individual’s name, the organization will increase response rates. In return, the candidate will receive a “copy” of those that reply to that letter – thus, building an “affinity” file that should be very responsive to future correspondence from that individual. All of this is done, of course, at that mailer’s cost. It’s a wonderful way to build a responsive pseudo- “house” file without the expense of renting prospect lists and mailing.
Again, the “overall” fundraising environment in which we currently reside presents its share of challenges. Notwithstanding, though it may sound cliché, with adversity comes opportunity. By coupling some of these cost-cutting techniques with proven direct mail methods, your fundraising campaign should be on solid footing to survive whatever may come its way in 2008 and beyond.
J. Scott Faircloth is Vice President of Client Relations at The Richard Norman Company, a firm specializing in direct response fundraising for Republican and Conservative candidates and organizations. He can be reached at 571-209-6303 or via email at: Click here to contact this Author.
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Winning Campaigns This Month
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Direct Mail - Cost-Cutting Techniques |
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By J. Scott Faircloth
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