Back-End Premiums in Direct Mail Fundraising Letters - Think Twice Before Offering

You should literally think twice before offering your direct mail donors a back-end premium. And neither of these thoughts has anything to do with net revenue.
Yes, your goal with offering a back-end premium is to boost net revenue. When your mailing is over, and you have subtracted the cost of the premium and the cost of fullfillment from your gross revenue, you certainly want the net revenue that remains to be higher than it would be without offering the premium.
But offering a book or DVD or other incentive affects more than just your short-term bottom line. So, before you drop that fundraising letter in the mail, offering that tantalizing "free" incentive in return for a gift, ask yourself these two questions.
Q1. Will this premium help me avoid my duty as a fundraiser?
Premiums work because they are attractive to donors. Donors want them, and like to receive them at no cost (other than the "cost" of a donation). If you dangle a sufficiently attractive gift in front of donors, they will respond. But you are in the philanthropic sector, not the retail sector. You are a fundraiser, not a used car salesman. Sorry, salesperson. Your duty as a direct mail fundraiser is to attract charitable contributions, not to hawk trinkets.
Q2. Will this premium strengthen the connection the donor has with my charity?
Books written by your founder, DVDs that showcase your success, and beautiful calendars that your donors actually hang in their kitchens are all effective at increasing your donor's affinity with your organization. These and other back-end premiums strengthen the bond you have with your donors. Return-address labels, decals and other cheap gimmicks don't.
Stephen Hitchcock and his colleagues at Mal Warwick & Associates discovered long ago that back-end premiums generally work best at upgrading gifts from current donors, particularly if the premium is tied to donor recognition (a plaque, perhaps).
Author Bio:
Alan Sharpe publishes Direct Mail Fundraising Today, the free, weekly email newsletter that helps non-profit organizations raise funds, build relationships and retain loyal donors. Alan is the author of Breakthrough Fundraising Letters and 25 handbooks on direct mail fundraising. Alan is also a speaker and workshop leader who delivers public seminars and teleseminars on direct mail fundraising. Sign up for Alan's newsletter at www.RaiserSharpe.com
© 2008 Alan Sharpe.
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