’Tis the Season to Cut Back?

By Rick Christ

I asked a fundraiser to hand me a dollar bill. I gave him $.50 back. He wasn’t happy.

Then I asked him for another dollar bill. This time, I gave him $2.50 back. He immediately wanted to do give me more dollars “for more of these deals.”

“Ah,” I replied, “You can only do one of those second deals every time you do one of the first deals.”

As you look at all the negative economic indicators, it seems smart to conserve your marketing investment dollars.

Your primary responsibility is to maintain your presence among your best donors, so they will continue to support your mission. You will fully fund all those communications. 

In the past couple of years, we’ve seen some mailers cut back in two segments: lapsed donor recapture and new donor prospecting. Cutting back too much in either segment will cost you and the programs you support as early as next year.

Lapsed Donor Recapture
You may not “break even” on some segments of lapsed donors when you attempt to recapture them. However, once recaptured, they tend to return quickly to their previous habits of generous support. They may only produce $.75 for every dollar invested in 2012, but may provide $2.50 or more per dollar in 2013.

New Donor Prospecting
It may make sense to trim prospecting, and this may be the year to try new lower-cost modeled lists. Prospects may only return $.50 for each dollar invested in 2012, but new donors, once renewed, will be worth $2.50 or more per dollar invested down the road.

So expand your mailings when you can, trim back where you must, but do it with a scalpel, not a chain saw. If you need some modeling to see the impact of proposed cuts over the next three years, we can help, with either a Vital Signs Analysis™ or a List LifeCycle™ Analysis.

Remember, donors have as many choices to give as they had before this economic downturn. They just have less money. They’re going to support the organizations that continue to communicate with them. Bonds broken now will be much harder to re-create in the sunny times down the road.