Do premiums work in fundraising? Surveys won’t tell you

At the Hilborn Charity Info blog, a good question: Donation premiums: do they work?

But a weak answer:


  • Experience says yes — based on real-life numbers from actual fundraisers.
  • Research says no — based on survey research

The “research” in this case tells us nothing, because it’s survey research — that is, findings that only reveal what survey respondents say about premiums, not what they do in real life when premium mailings show up in their mailboxes. Surveys are not bankable information.

So go with the experience.

Here’s what I can tell you about premiums in direct mail such as address labels:


  • Premiums usually work.
  • They don’t work for everyone, or in all situations.
  • They tend to raise response but lower average gift. Sometimes the trade-off doesn’t work out, sometimes it does. Without careful analysis, it can be difficult to tell whether it worked or not.
  • Not all premiums are equal. One type might work while another doesn’t. And the design that’s on them matters.

If you’ve been staying away from premiums because survey research tells you people won’t respond, you owe it to yourself to give facts a try.


Comments

8 responses to “Do premiums work in fundraising? Surveys won’t tell you”

  1. This isn’t really about Experience vs Research. It’s about Good Research vs Bad Research. Because experience via good testing, actually is research. In fact it’s the best research, much better than most surveys, for three reasons.
    First, the data probably comes from a much larger sample size; a whole database vs a few hundred people, or in the case of some focus groups a few dozen.
    Secondly, the data doesn’t come from a statistically weighted sample population ‘like’ average donors – it comes from your own database, your own donors.
    Thirdly, testing doesn’t tell you what your donors think you want them to say, or what they think they think about themselves – it tells you what they actually do. And that’s what matters most to your mailing income, and ultimately to your beneficiaries.
    I’m definitely with Jeff on this one – ignore the surveys, test it properly, then listen to what your donors are telling you through their giving.

  2. This isn’t really about Experience vs Research. It’s about Good Research vs Bad Research. Because experience via good testing, actually is research. In fact it’s the best research, much better than most surveys, for three reasons.
    First, the data probably comes from a much larger sample size; a whole database vs a few hundred people, or in the case of some focus groups a few dozen.
    Secondly, the data doesn’t come from a statistically weighted sample population ‘like’ average donors – it comes from your own database, your own donors.
    Thirdly, testing doesn’t tell you what your donors think you want them to say, or what they think they think about themselves – it tells you what they actually do. And that’s what matters most to your mailing income, and ultimately to your beneficiaries.
    I’m definitely with Jeff on this one – ignore the surveys, test it properly, then listen to what your donors are telling you through their giving.

  3. Great post, Jeff. I agree… It seems that experience says that a premium/fremium is a MUST for acquiring new donors through direct mail (unless you are CARE). And the article fails to take into account that offering a premium in an acquisition package is totally different than offering a premium to your house file.
    Jeff, why do you think some premiums work and other don’t?

  4. Great post, Jeff. I agree… It seems that experience says that a premium/fremium is a MUST for acquiring new donors through direct mail (unless you are CARE). And the article fails to take into account that offering a premium in an acquisition package is totally different than offering a premium to your house file.
    Jeff, why do you think some premiums work and other don’t?

  5. Gre Herr Avatar
    Gre Herr

    I’ve read that testing showed it difficult to wean givers off of the premiums that hooked them in in the first place. Is that just wrong, or is there a best practice to move people from the fancy premium/freemium followup mailings to cheaper packages, or should we just factor ongoing premium costs when considering followup value?

  6. Gre Herr Avatar
    Gre Herr

    I’ve read that testing showed it difficult to wean givers off of the premiums that hooked them in in the first place. Is that just wrong, or is there a best practice to move people from the fancy premium/freemium followup mailings to cheaper packages, or should we just factor ongoing premium costs when considering followup value?

  7. Richard Pordes Avatar
    Richard Pordes

    I guess you and Tom (The Agitator blog) knew you’d be opening a Pandora’s box of responses when you wrote your columns on premiums. Back in the early 2000’s we conducted a test of premium vs. mission vs. emergency mailpacks. The test was conducted in Canada.
    As expected, the emergency pack did best and dropped off quickly in follow-up mailings. The premium mailing did second best and dropped of less quickly. The mission mailing did worst, and dropped off least. No surprise there.
    In terms of medium-term results, the premium mailing did best. I say “medium-term” because we abandoned the test after two years.
    The reason is that in practice it is almost impossible to have three groups of donors subjected to exactly the same conditions for several years (in terms of other mailings, upgrades, etc etc) so that all other variables are constant.
    So testing may not provide a sufficient answer.
    In terms of experience (30 years in fundraising) I would have to say that I think the right premiums can help. Premiums that are designed to make a person feel guilty or make a donation because they like the gift, are going to be ineffective. However premiums that are designed purely to get the recipient to open the envelope, (like pencils and visible address labels), probably do increase net income. If a person at least opens our envelope, it gives us a chance to convince the recipient about our cause. But then we must be sure that our letter is compelling in its own right.
    My bottom line? Use a premium, but not too nice!
    (Also posted on The Agitator)

  8. Richard Pordes Avatar
    Richard Pordes

    I guess you and Tom (The Agitator blog) knew you’d be opening a Pandora’s box of responses when you wrote your columns on premiums. Back in the early 2000’s we conducted a test of premium vs. mission vs. emergency mailpacks. The test was conducted in Canada.
    As expected, the emergency pack did best and dropped off quickly in follow-up mailings. The premium mailing did second best and dropped of less quickly. The mission mailing did worst, and dropped off least. No surprise there.
    In terms of medium-term results, the premium mailing did best. I say “medium-term” because we abandoned the test after two years.
    The reason is that in practice it is almost impossible to have three groups of donors subjected to exactly the same conditions for several years (in terms of other mailings, upgrades, etc etc) so that all other variables are constant.
    So testing may not provide a sufficient answer.
    In terms of experience (30 years in fundraising) I would have to say that I think the right premiums can help. Premiums that are designed to make a person feel guilty or make a donation because they like the gift, are going to be ineffective. However premiums that are designed purely to get the recipient to open the envelope, (like pencils and visible address labels), probably do increase net income. If a person at least opens our envelope, it gives us a chance to convince the recipient about our cause. But then we must be sure that our letter is compelling in its own right.
    My bottom line? Use a premium, but not too nice!
    (Also posted on The Agitator)

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The future of fundraising is not about social media, online video, or SEM. It’s not about any technology, medium, or technique. It’s about donors. If you need to raise funds from donors, you need to study them, respect them, and build everything you do around them. And the future? It’s already here. More.

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Jeff BrooksJeff Brooks has been serving the nonprofit community for more than 35 years and blogging about it since 2005. He considers fundraising the most noble of pursuits and hopes you’ll join him in that opinion. You can reach him at jeff [at] jeff-brooks [dot] com. More.


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The future of fundraising is not about social media, online video, or SEM. It’s not about any technology, medium, or technique. It’s about donors. If you need to raise funds from donors, you need to study them, respect them, and build everything you do around them. And the future? It’s already here. More.

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Jeff Brooks has been serving the nonprofit community for more than 30 years and blogging about it since 2005. He considers fundraising the most noble of pursuits and hopes you’ll join him in that opinion. You can reach him at jeff [at] jeff-brooks [dot] com.

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