Don’t forget about the less sexy sister: The Offer

The Offer
Date Published
08/17/2017
Author
Debbie Merlino

Everyone likes creative tests. People enjoy sharing their opinion about what should be tested, and they keep a close eye on the returns. Creative tests are fun and exciting! Kind of like that popular, good-looking girl.

But don’t forget about the less sexy sister: The Offer. She’s a little bit of a wallflower and kind of bookwormish, but she deserves your attention, too.

Offer testing is the most inexpensive test you can implement in a direct response program. And, it can significantly impact both the response rate and average gift.

If you’re thinking, “But I’m a non-profit, what’s my offer?” consider the following.

  1. Ask string: What most fundraisers think of when it comes to offer testing. Consider testing the entry amount, the order of the asks, and the number of suggested gift amounts. A lower entry amount will almost always result in a higher response rate, but how do you balance that with a potentially smaller average gift?
  2. Deadline: Are you asking donors to respond by a specific date? Adding a deadline to your appeal almost always increases the response rate.
  3. Inducements: Is there a Matching Gift opportunity? A free gift or premium offer? Special recognition — either included in the mailing or promised on the back-end?
  4. Response options: How easy (or difficult) is it for folks to make a gift? Sure donors can respond to your direct mail appeal by writing a check and returning it in the enclosed envelope, but is that envelope a courtesy reply or a BRE? Do you direct donors to your web site if they prefer to make their gift online? What about a phone number?

An “Open Ask” — Knowing that a discounted membership offer frequently increases the response rate, a regional nonprofit decided to take it one step further. What if instead of offering a discounted membership, it allowed prospective new members to give any amount they wanted? Would that further improve the response rate to their long-standing control? And what would be the impact on the average gift, the cost to acquire a new member, and membership renewal rates in year two? In several tests (and back tests) this “open ask” proved to be the winning offer. The response rate more than doubled — achieving the organization’s primary goal of generating a significant amount of new members. And, while the average gift dropped significantly, as expected (from $55 to $28), the cost to acquire a new member was cut in half. After monitoring these new members for over a year, we know that they renewed at the regular membership level with the same enthusiasm as those who were originally brought on at the higher entry level.

Can an offer be too rich? — You bet! A botanical garden gave away two guest passes as part of its membership control offer. If two’s good, four should be better, right? Wrong! Offering prospective members a total of four (vs. two) guest passes actually lowered the response rate by 13% while having virtually no impact on the average gift!!

The Matching Gift Challenge — This popular offer lets you make your donors the hero of the appeal. The matching gift dollars will only be unlocked if your donors rally together and first raise the targeted amount. The sense of urgency, coupled with the power the donor has to make an immediate impact, frequently results in donors giving twice as much when offered a matching gift opportunity.

Something for Everyone — Many of our clients are converting existing donors to Sustainers via direct mail. And then upgrading their monthly gifts, and converting their method of payment from credit card to EFT through the mail as well. These efforts are all essential to increasing donor loyalty and shoring up the foundation of the fundraising program. But, they were costly to achieve via direct mail until we made a change to the offer. We gave donors the opportunity to make an additional gift (instead of the primary requested action). This change had no negative impact on the effectiveness of the primary offer, and donors who didn’t want to change their giving starting making additional gifts — the proceeds of which more than cover the cost of the mailing! This has been a game changer.

Great things can happen when you don’t ignore the less sexy sister!

About the Author:
Debbie Merlino
President
Agency Services

As President of Agency Services, Debbie is responsible for overall client satisfaction. She works to ensure AFG’s winning strategies are being shared throughout the organization for the benefit of all our clients. Debbie is frequently out on the road sharing insights with others and listening to your challenges so we can develop solutions.

What excites you about your work at AFG?

I get to meet the best people and hear their stories. Hardly anyone says they planned to work in development. Learning how our clients found themselves in this profession and hearing the stories of the people they serve is inspirational.

If you weren’t at AFG, what would you be doing?

Attempting the life of a freelance journalist, working in a bookstore, and/or doing a podcast for my own enjoyment.

What are your hobbies/interests outside AFG?

Making people laugh. It’s thrilling! Especially when done purposefully and I’m on stage ; ) I also enjoy yoga and a well-crafted cocktail.

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