Alana Santoro   

Should Your Organization be Using Premiums?

by Alana Santoro on March 30th, 2016

For those of you who may not be aware, a premium is a small gift that organizations will include in their direct mail fundraising appeals. If you are a donor you know all too well what these are all about. The cards, labels, note pads, pens, gift wrap, if you can fit it in a mailbox there is a chance you have received it. But do these flashy premiums work?

Fundraising is about building relationships with your donors, whether that is in person, telephone or through direct mail. Non-profits use premiums in direct mail to create new relationships and when you are offering something for free in an appeal the monetary response for the organization is often higher. This is why premiums are useful in prospecting for new donor. And the good news is that we have found that the long-term value for premium-acquired donors can be higher than that of a non-premium acquired donor.

The free gift helps increase your open rates and once inside donors feel compelled to read about your organization and your story. If you are able to encourage the donors to invest time into reading about your cause then the premium has done its job.

But you must also be careful when using premiums. In some cases donors may simply be making a gift based on guilt (for receiving the gift), rather than your case for support. You want donors to give because of a natural motivation, the emotion of the story you’re telling and your cause.  So what do you need to know?

  • If you are using premiums be sure that they align with your organization and the story you are telling.
  • If you are wanting your donor to take an action with the premium, like plant it or send it to a loved one to share their support for the cause, then identify that in the letter copy.
  • Not all donors are going to appreciate a premium. Some will feel it’s a waste of money. If a donor calls in to complain it means they care enough, so use the opportunity to steward your relationship with them.
  • Premiums are sometimes costly. Ensure that you are analyzing your responses from your premium packs carefully with attention on the net cost to acquire (and long-term value) for each segment that is receiving a premium.

If your budget allows and it aligns with your organizations values then premiums may be worthwhile on your next prospect mailing. 

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