CDP Acquisition Mail: Testing & Data Made All the Difference

In a quest to find a new and better way toward a model of mail-driven acquisition, Contributor Development Partnership (CDP) embarked on a series of tests that lead us to the current model being deployed for dozens of stations in the system.

Typically, a station would sign up for an acquisition mailing and set a budget for a number of pieces, which could involve a single piece of mail and/or a follow-up mailing to a selected group of prospects.  The membership or development staff would then choose from a ‘list of lists’ provided by a broker.  Those lists could run into the thousands of dollars, all paid upfront to the broker.  Print production, postage, and creative design/copywriting is extra, making the cost to acquire a donor $40-$60. 

Making the case to management that acquisition mail delivers members with higher long-term value than other channels is often difficult.  ‘Why pay $40-$60 to acquire members when we can do that for free through on-air pledge?’  I won’t go into that here, but we discuss it often during CDP’s State of the System quarterly reports (hint: lower long-term value).  Suffice to say, acquisition mail is one of a number of arrows in the quiver that helps stations shoot bullseyes. 

Our quest: could we develop a new model that would generate the same (or larger) number of new members and provide higher net revenue to stations?

Initial tests involved CDP incurring all upfront costs and production management (list acquisition & segmentation, creative licensing, postage & printing).  Stations paid only for members acquired. 

We learned a lot. 

CDP’s heavily-tested control package performed well.  We eliminated upfront risk to stations through CDP’s purchasing of lists and use of our proprietary prospect modeling.  The net cost to acquire a donor was reduced to $14-$15.  When compared to a traditional approach where costs are baked in on a per-piece basis, we found that CDP’s model (invoicing stations for each donor acquired, which was about $55) could be improved upon. 

That brought us to today’s model, where everything is baked into a $.62 per piece price, invoiced after the mail cycle.  For example, stations that commit to a list of 1,000 prospects, with a suggested follow-up to 10% of the initial prospects, would incur a final cost of $682.

At a .9%-2% response rate and average gift of $41, the result is a $15 cost to acquire.  Those original donors who responded to the initial mailing will have contributed an estimated total of $1,614 by the fifth year of membership assuming standard retention and additional giving rates if properly stewarded.

CDP now schedules acquisition mailings in September, November and March.  We continue to monitor results and refine our data-driven approach to identifying prospects, building cost-effective donor acquisition efforts, and driving net revenue back to stations.