A lot of direct mail fundraising is driven by "freemiums," the most common of which is the good old sheet of personalized address labels. Other inexpensive personalized items, like notepads, bookplates, pens, coins, and greeting cards are also popular.
Freemiums often affect fundraising results in these ways:
- Average gift is lower than without freemiums.
- Donors acquired with freemiums are less likely to upgrade, and the don't stay with you as long.
- Sometimes, the only effective way to get subsequent gifts from freemium-acquired donors is to send more freemiums.
Given that, why does anyone use freemiums? Easy: They increase response. Sometimes by a lot.
Whether that increase is worth the downsides of freemiums -- that's another question. The choice you make when you use a freemium is to trade value for volume. You'll get more donors, but each donor will be worth less.
To make sure freemiums work for you, do these things:
- Pay a lot of attention to average gift. Test ways to counteract the freemium effect so you can push the average as high as possible.
- Make your freemiums somehow connect to your cause. This most likely does not mean slap your own logo on them, but create something that reminds the donor why supporting you is important.
- Give freemium-acquired donors a varied diet. The more of them you can cultivate without premiums, the better off you'll be.
Freemiums are hard to avoid, because the industry-wide drop in direct-mail response rates has caused so many to seek the response-jolting impact of them. It's a self-feeding loop: Many fundraisers use freemiums, which means many of the lists you rent are made up of freemium-responsive donors
Maybe you've made a solemn vow never to use this technique. That would be unwise. Freemiums aren't the right solution for everyone, but they can be a powerful fundraising tool.