Lists, Acquisition Planning & Strategy Presented By: Jeanette Cassano Senior Vice President March 8, 2018 Confidential

OVERVIEW First to Last Purpose of Direct Mail 11/15/2018 OVERVIEW First to Last Purpose of Direct Mail 5 Factors to Achieve Success Types of Lists Sources of Lists List Ordering Process Role of the List Broker and List Manager Planning an Acquisition Mailing Structure of an Acquisition Plan & Strategy Attrition & Acquisition of Donors

Your organization’s future depends on it. 11/15/2018 FIRST to LAST DATA DRIVEN for Addition and Retention of DIRECT MAIL DONORS A nonprofit’s list of members/donors is its Most Important Asset! Why have an acquisition program? Your organization’s future depends on it.

The Purpose of Direct Mail is Twofold… 11/15/2018 PURPOSE The Purpose of Direct Mail is Twofold… Fundraising & Education Primary Objectives Raise Money Add New Member & Donors Direct Mail Revenue is responsible for building many of our country’s most important Non-profit organizations For most small organizations, the many common source of funds is asking large amounts of people for small donations through Direct Mail

PURPOSE Creates More and More… 11/15/2018 PURPOSE Educates prospects on mission of nonprofit Creates awareness of issue Increases “brand” recognition New members/donors can become monthly givers and/or major donors Supports other channels of fundraising New Volunteers/Activists Donate Goods Attend an Event Participate in a walk or run Volunteer to organize an Event Promote a charity on line Email or send a letter to an elected Join a social network More Advocacy More Fundraising Creates More and More… More Fundraising More Advocacy

5 FACTORS TO ACHIEVE SUCCESS 11/15/2018 5 FACTORS TO ACHIEVE SUCCESS Lists Offer Copy Format / Packages Premiums / Benefits Maximizing Direct Mail Success depends 1st on lists – 2nd on offers – 3rd on copy/graphics. If the mail piece does not reach the right people, Direct Marketing cannot do its job & will not be successful in meeting its objectives.

TYPES OF LISTS Consumer Business & Consumer Commercial Examples 11/15/2018 TYPES OF LISTS Business & Consumer Examples Phone Directories, Credits Records, Deed Registries Government Data, Warranty Cards, etc. Commercial Response Compiled Consumer Fundraising Consumer lists change at a rate of about 2% per month as people are born, relocate, die or marry. NCOA adjusts for these factors.

TYPES OF LISTS – MARKETS & TARGETING 11/15/2018 TYPES OF LISTS – MARKETS & TARGETING Consumer Source of Prospecting Files for Fundraisers Member/Donor files Subscriber files Buyers Co-Op Databases Compiled Survey Email Direct Recency Dollar Gender Region Source Modeling Factors to Consider: When was file last updated Selects Available Pricing Usage “…better target prospect – lift response”

SOURCES OF LISTS; TYPES OF LIST TRANSACTIONS 11/15/2018 SOURCES OF LISTS; TYPES OF LIST TRANSACTIONS Exchange Rental One-Time Use Broker/List Manager NextMark/SRDS* Internet Direct Connection Approx. 25,000 Response Lists & 50,000 Compiled Files * SRDS = Standard Rate & Data Service. Database of media rates & related information – includes approx. 100,000 U.S. & Int’l media properties. Verifies listings 20 times per year. 20,000 list updates every month.

CLEARANCE AND ORDER PROCESS 11/15/2018 CLEARANCE AND ORDER PROCESS Sample, Quantity and Mail Date Mailer Broker List Owner Manager

WHY USE A BROKER/MANAGER – MACRO PERSPECTIVE 11/15/2018 WHY USE A BROKER/MANAGER – MACRO PERSPECTIVE Abreast of current & historical trends in the overall direct mail market. Expertise within your sector such as charitable, environmental political, cultural/arts, etc. Identifies the lists that are successful for a particular cause or membership offer. Knows the characteristics and success of lists outside of the core market. Has the information on how a list was built & how often it is updated. Mail responsive names that have both the means and inclination to give to your cause.

WHY USE A BROKER/MANAGER – MICRO PERSPECTIVE 11/15/2018 WHY USE A BROKER/MANAGER – MICRO PERSPECTIVE Works with the client to develop an acquisition plan including test recommendations. Identifies profitable segments on marginal/unlikely lists. Maximizes exchange opportunities & negotiates the best prices for you with the list owner. Clears and orders continuation, retest, and test lists within a designated timeline. Coordinates with list manager for the timely delivery of names to the service bureau. Invoices the campaign. Keeps track of the exchange balance between organizations. Evaluates response rates, average gift and other results.

Planning your Acquisition Mailing Who is your donor? . . . 11/15/2018 Planning your Acquisition Mailing Who is your donor? . . . . . . What organizations have an affinity to yours? . . . . . . What is your GOAL?... Increase revenue…Increase Membership…

STRUCTURE OF ACQUISITION PLAN AND STRATEGY 11/15/2018 STRUCTURE OF ACQUISITION PLAN AND STRATEGY Organization’s budget & goals determine the quantity to be mailed Prospecting is an investment Factors that determine the timing & number of mailings per year: Expenses/Budget # of new Members/Donors to be added Timing of Cash Flow from New Donors Seasonality Objective - High value long term donor Most significant quality variable is the average gift amount Average gift is also a key indicator of a donor’s upgrade potential & measurement of a stronger commitment

STRUCTURE OF ACQUISITION PLAN AND STRATEGY 11/15/2018 STRUCTURE OF ACQUISITION PLAN AND STRATEGY Continuations, Retests, & Tests Know your primary, secondary & tertiary markets Maximize the use of your core files Better target your marginal lists 10% to 20% of plan should be devoted to testing List/Package optimization – Traditional/Mission - Hybrid - Premium based packages The List Mix: Member/Donor lists are generally most responsive Hotline selects – great tool to get unique names & increase response rates Commercial files - Catalog Lists – low response rate; high average gift Cooperative Databases – modeled donor names Test lists including those of Nonprofits whose mission is similar Must Lay a Solid Foundation for your plan

STRUCTURE OF ACQUISITION PLAN AND STRATEGY – KEY METRICS 11/15/2018 STRUCTURE OF ACQUISITION PLAN AND STRATEGY – KEY METRICS Understand & reach the benchmark metric(s) established in your budget… …# of new members, CP$R, Net/Donor, Income/M, etc. Cost/M: = (Total Cost/Qty Mailed) * 1000 = Indicates cost per thousand Net/M: = Revenue - Cost = Net Income. Formula=(Net/Income/Qty Mailed)*1000 = Shows net productivity Cost Per Dollar Raised (CP$R): = Total Cost/Total Revenue The lower the better. Net/Donor: = Net Income/# of Donors = Important prospecting metric because it takes into account donors, revenue & cost. LTV = Long Term Value (Life Time) Key retention metric for long term planning. Response Rate: = (# of Donors/Qty Mailed) * 100 = Success in matching target audience, package & program. Average Gift: = Gross Income/# of Donors = Higher gift - better upgrade potential Gross Income or Total Revenue: = # of Donors * Average Gift = Shows productivity of mailing Income/M: = (Gross Income/Qty Mailed) * 1000 = Key in list evaluation

STRUCTURE OF ACQUISITION PLAN AND STRATEGY 11/15/2018 STRUCTURE OF ACQUISITION PLAN AND STRATEGY Use historical results and current trends to develop projections for each list…Rigorous Process to determine Quantifiable Metrics to develop plan with best ROI. List selection is data driven. Not only qualify but must also quantify the viability of the acquisition plan and strategy. Defend projections with objective data. $$$ CAUSE & EFFECT Response Rate and Average Gift act like a weighted scale.

STRUCTURE OF ACQUISITION PLAN AND STRATEGY 11/15/2018 STRUCTURE OF ACQUISITION PLAN AND STRATEGY Specifics of Mail Plan Development Results: Plan is built on response information from previous mailings. Quantities per list/select are input into the mail plan according to performance and most recent usage. Universe counts - Is the universe large enough to omit prior usage? Strategize placement of list…how many mailings a year? Take all available and wait several mailings to mail again or take an nth amount so some quantity of list will be in each mailing. Improve results by refining select segmentations 12 months instead of 24 months; 6 month instead of 12 Dollar amount of gift ($5+ versus $10+) Male versus Female Geo/SCF/Zip Usage

STRUCTURE OF ACQUISITION PLAN AND STRATEGY 11/15/2018 STRUCTURE OF ACQUISITION PLAN AND STRATEGY Environmental Impact When the right audience is targeted, a critical component of Environmental Best Practice standards is met. Returned, unwanted and undelivered mail produces vast amounts of waste paper. Plan and implement the “Golden Rule” every step of the way: Reduce, Reuse, Recycle. Direct Mail Targeted Marketing Strategies The ability to deliver your message to a precise audience - produces cost effectiveness & environmental stewardship.

ATTRITION AND ACQUISITION OF DONORS 11/15/2018 ATTRITION AND ACQUISITION OF DONORS Prospecting is an Investment. Most clients keep 25-35% of new donors in the 1st year; Multi-year donors usually retain between 65-75%. Over the course of time if prospecting is not done in some manner– natural attrition will continue to exponentially reduce the size of your donor base. A nonprofit’s most important asset is it DONORS! Invest in Acquisition Don’t allow your member /donor base to shrink

FINAL WORDS “Even if you are on the right track, you’ll get run over if you just sit there.” – Will Rogers Thank you! Speaker Contact Information: Jeanette Cassano jeanettec@belardiwong.com 415-729-9148