Aryeh Zev Narrow (Spring Valley, NY) helps non-profits make more money by communicating better with their donors. Aryeh Zev works with small-to-mid-sized charities that want world-class marketing communications, but might not be able to afford (or prefer not to work with) big-dollar marketing agencies. Learn more about non-profit marketing and fundraising messages on Aryeh Zev’s blog: The Spark*. You can contact him at az at aznarrow dot com.
Looking for new donors? A rented (or borrowed) mailing list might be a goldmine. Then again, it might be an expensive dead end. Let’s look a bit closer at what how the list rental business works, and how to choose a winner.
Compiled vs. Response Lists
Response lists are proprietary “house” lists, an organization’s internal list of customers, donors, prospects, etc. Compiled lists may contain data aggregated from numerous response lists or from clearinghouses such as the national credit unions. Compiled lists are cheaper; they’re also lower quality.
Response lists generally are more expensive, but are more targetable and can give better results. They may offer better options to filter the list based on the donor’s donation history.
The keys to success with any list are relevance and list quality. For our purposes, list quality is a blend of how fresh the addresses are, how well they match your target donor’s profile, and how likely the recipients are to respond. Relevance means identifying donors who are most likely to take an interest in your organization. You’re looking for donors as similar as possible to the donors who have shown an interest in your organization already. For example, if you run an orphanage in Staten Island, you will take an interest in the list of donors to, say, an orphanage in Philadelphia. Second best, you might look at a compiled list of donors to orphanages in general. Next, you’d look perhaps at a compiled list of donors (whether or not to orphanages), filtered for people who live near Staten Island. Relevance is your most important predictor of success; invest in it.
Second to relevance is list quality. All lists gradually become outdated. Thanks to moves, deaths, and other phenomena, data just goes bad. Consumer postal lists become obsolete at a rate of about 1% a month. Consumer email lists? Even more volatile: up to 30% a year or more. (This is called “list churn.”) Business postal lists? About 1% a week. Be sure the list you rent is up-to-date and has been used or updated recently.
Expect at least 10% of postal addresses to be undeliverable on a typical compiled list, less on a high quality response list. For email, “bounces” are a fact of life: expect as much as 1% of each blast (more if your list is out of date). Even Gmail and Yahoo go down every now and then; if you send to a working Gmail address when Gmail is down, it bounces. Same story if the user’s inbox is full.A high bounce rate, however, is a sign the list is old or perhaps was not compiled honestly. List “hygiene” means keeping the data current and reliable; for postal, that means stuff like address changes. For email, that translates into fresh, opt-in data and, hopefully, low bounce rates. Note: list brokers and mailhouses are required to run postal lists through the post office’s change-of-address database a few times a year.
How to evaluate a list
All lists are evaluated by “RFD”—recency, frequency, and dollar [value]. Ideally, you want recent donors, and if they’re frequent donors, all the better. Compare the RFD of the lists that interest you to
pick the most promising prospect. If it’s an email list, make sure the list is double opt-in (recipients asked to be there and then confirmed); all reputable email lists are, and this helps keep you from running afoul of SPAM laws.
Each list has an associated “data card” that details whose data is on the list.
The “universe” is the total list size; “hotline” names are recent additions (usually more likely to respond). It should tell you how the list was compiled (for email, that includes opt-in information) along with whatever else might be known about those listed: gender, zip code, donation history, etc. “Selects” are filtering criteria, such as ZIP code, gender, or income level. “Enhanced” lists have all sorts of demographic stuff appended from national credit records: income, home ownership, etc. All that extra stuff can set you back an extra $3-15 per thousand names; if it helps you target your appeals, it could be worth it.
You can go to your broker with a request like, “We want 30,000 female donors in the greater Philadelphia area who have donated $100 or more for education in the last twelve months.” Be as specific as you want, but obviously the more picky you are the fewer choices you’ll have and the more you’ll pay.
The most revealing data on the data card is “usage”: it tells you who’s used that list before, and most important—who’s used it more than once. Lots of one-time rentals are a tip-off that the folks on the list aren’t buying in to what’s being sold to them (otherwise the renters would have returned to rent the list again). On the other hand, if an organization like yours has rented the list more than once, it’s a pretty solid indicator the list is worth testing for your organization, too (that’s relevance). If it lacks usage data, ask your broker or the list owner. New list? No history? Proceed with caution.
In the second and final installment of this post, you will learn about the advantages of using a list broker, and also be made aware of some of the pitfalls that you should avoid if you determine that this is a fundraising path that you want to explore.