A Fundraising Tip that Can Help Direct-Mail Promotions

“Funny how the new things are the old things.”Rudyard Kipling

When I first got into direct marketing, I took a course in direct-mail copywriting with legendary copywriter Milt Pierce at New York University. One day, a student asked, “Professor Pierce, why is it that as soon as I give a donation to a charity, they immediately send me another letter asking for more money?”

Milt replied: “Because fundraisers know, from experience, that the person who just made a donation is the one most likely to give again.” Huh? This threw me. It seemed counterintuitive.

“But Professor Pierce, if I just gave money to a charity, I would feel I’d fulfilled my obligation for at least a while. And I might even be annoyed that they are coming back to me asking for more.”

“Nonetheless,” Milt replied, “experience proves that the person who just gave is the most likely to give again.”

He explained that this phenomenon is called RECENCY, that it holds true for commercial direct-response solicitations as well as nonprofit ones, and that it is part of RFM (for “recency, frequency, and monetary”), a formula direct marketers use to select mailing lists.

1. RECENCY. According to RFM, those who purchased the most recently are the most likely to buy. This is why it’s usually worth paying a premium to rent the “hotline” names on any mailing list — the names of customers who have bought via mail-order within the last 12 months or so. The hotline names almost always outperform the other names on the list.

2. FREQUENCY. The more often someone buys, the more responsive he is to additional mail-order offers. This is why some mailing lists offer a selection called “multi-buyers” — customers who have bought more than once. Invariably, multi-buyers outperform the names of one-time buyers on the list.

3. MONETARY. This refers to the amount of money the customer spends or the size of his average order. This part of the formula tells you that you want to look for mailing lists where the average order is in the same range as your product’s price. Let’s say you are selling a video program titled “Overcoming Infertility: How to Have a Child When You’ve Been Trying Without Success.” The price is $99. You rent a list of people who have subscribed to an infertility magazine for $12. You mail to the list, and the mailing doesn’t pull.

Why not?

The problem is this: While the people on the list have demonstrated (a) an interest in infertility and (b) that they buy information by mail, they have NOT demonstrated that they will spend $99 on a mail-order product — $12, yes; $99, no.

The solution? Find a list of people who have, say, attended a workshop on infertility or bought a test kit via mail-order for $100. This might work, because you know not only that the people on the list are mail-order buyers and are interested in infertility but also that they have demonstrated they will shell out a large amount of money for the right offer.

(Ed. Note: Bob Bly is the editor of Mailbox Millionaire, ETR’s program to help you start your own successful direct-mail business.)