Maxing Out Your Fundraising Direct Response Program

Here's a question a fundraising organization asked me. "Are we maxing out our direct response program?" (“Maxing“ is not a real word as far as I know, but organizations seem to have adopted it).

This is a question both fundraisers and commercial businesses have asked for years. The answer is complex and there is no simple answer. 

So here is a check off list to help improve fundraising ROI or target universe penetration.

1. Do you have a handle on the net count of your combined prospect lists?

These are your proven lists that always achieve your ROI when you solicit them. This will tell you how far is up on your new business or new donor acquisition. Without it, you do not know if you have reached your full potential. Universities and colleges already know this because their annual fund potential reflects the size of their alumni list. These counts are more difficult to calculate for more general marketing efforts.

2. Have you historically allocated a significant percentage of your budget for testing lists, offers, products, channels, multichannel integration, creative execution and direct mail formats?

If not, then you have a long way to go to maximize your financial opportunities.

3. Have you tested your internal outbound and inbound telemarketing groups against other external vendors to see if they can beat your internal team's response rates and ROI?

This also applies to outsourcing internal creative work against your internal creative team in your attempt to beat controls. Do not let a false sense of loyalty for internal or external suppliers keep you from growing your donor base.

No one supplier, internal team or creative effort owns your business. All things are challenged to improve results.

4. Is your budgeting process based on something other than ROI?

If it is, then you will never be able maximize your potential.

Investment spending for testing and the ability to rollout successful tests based on results is required to get the best return on your investment.

Marketing is not a fixed expense.

It is variable depending upon the organization's ROI and desire to expand the business for a more reliable income flow.

Marketing will never thrive when budgets are set based on any other criteria than results. You will truly reap what you sow.

Notice that the questions do not ask for lowering cost but rather improving ROI. Lowering cost is a given in this scenario. Fixating on cost cutting without considering the impact on revenue is just bad business and short sighted.

What other questions need an answer before you know that you maximized the potential of your available market?

Posted on August 24, 2011 and filed under Direct Mail, Direct Marketing Strategy.