Acquiring potential donors on a cost-per-prospect
Howard Lake | 2 November 2007 | Blogs
Lead-generation on a cost-per-lead basis is an established marketing channel for many mail-order companies, tourist boards and home-improvement companies but it is also a valuable tool in the arsenal of marketing techniques for donor recruitment. Jason Andrews of direct marketing agency Evolution DM explains why.
Lead-gen programmes can be online or offline with the advertiser only paying for leads generated. Occasionally some programmes ask for up-front fees for admin and set-up charges: avoid these, there are plenty of programmes that don’t have any set-up fees.
If you are contemplating lead-generation to recruit new donors, here are my top media buying tips to ensure you get the very best deal possible for your charity.
Negotiate the rate
As with all your media-spend, negotiate hard on the rate. Lead-generation programmes work in two ways.
1) The programme manager buys advertising media and takes the risk based on his experience of the market and expected response rates. It is probable that the initial rate you are offered will be around 20% higher than the expected break-even point for the whole campaign (including other advertisers) so there’s plenty of room to get a discount.
2) Sometimes the programme manager will be able to secure media on a cost-per-lead so that he has a guaranteed margin. Again, it is not unusual for them to work on a margin of 20% or more so press hard for a better rate. Work the charity angle. Get a quote, then use the line: “what’s the best rate you can give me if I sign up today? If you can knock 20% off this we have a deal and I’ll get the paperwork across to you today.”
Even if you decide not to do the deal you’ll be getting the best rate you can for your charity. Don’t feel guilty about this bit: this is how the commercial sector works and you don’t need to get the paperwork across to them ever! You may even decide to let them stew for a couple of days and then try to get another 5-10% off.
Don’t book until the deadline is close
As with most advertising and media, the commercial sector is driven by sales deadlines. Once you’ve got the best rate you can, hold your nerve and wait. If you book early you may miss out on a better last-minute rate. Many lead-gen programmes, especially those that are on the back of paper-surveys have a set number of slots for advertisers. A good lead-gen programme will expect to be in profit by filling about 70% of the slots so the later-filled slots are just a bonus and prices can be more flexible. Some programmes have limited slots and are popular so its inevitably that some programmes sell-out so don’t leave it right until the deadline for a slot that you do want book. Lead-gen programmes tend to fill very quickly in the week or two before the copy deadline as all the ‘waiters’ emerge for the best rates.
Ask for market-sector exclusivity
Most lead-gen programmes work as “free-information” sections at the back of paper consumer surveys or online registration pages, catalogue-request websites, etc. As such, your advert will probably be displayed alongside all sorts of non-competitive offers like holiday brochures and mail order catalogues which shouldn’t affect the conversion rate of your leads but try to get an agreement to exclude other charities, at least those in your sector. This may be unlikely but it is worth asking since most programmes only feature one or two charities anyway.
Ask for a capped campaign
The programme manager should give you an estimate of the number of leads that your campaign will generate. Set a budget and get the campaign capped so you’re not exposed to buying thousands of leads that you are not sure will convert to donors. If the campaign works well and generates more leads than your capped limit you may then negotiate a rate for the remaining leads. If you are very shrewd and have a good relationship with the programme manager you may be able to get these additional leads supplied free of charge in return for a commitment to undertake another similar campaign.
Pay only for validated leads
Lead-gen programmes are subject to the whims of the general public so make sure your agreement clearly defines what you are prepared to accept as a lead. Do you want to pay for Micky, Mouse living at No. 1, Disneyland? Probably not. Get the programme manager to include all the validation services he can so that you can screen out bad data, mis-addressed data etc.
Ask for offline and online leads to be separated
It’s a simple fact that it requires more effort for a ‘consumer’ to make the effort to post back an info-request card rather than click on a weblink and fill in a form. Therefore the conversion of leads from online sources tends to be weaker than from offline sources. If you can’t get the programme manager to separate out online and offline leads, at least find out the percentage split between the two and negotiate on rate accordingly.
Of course the media buying is just the start. Once you have the campaign planned, there are are a number of things to consider.
Your advert
Since you are not paying for the media distribution of your advert, only on results, your advertising copy should be fundamentally different from advertising where you’re paying for the media and usually want the largest possible response. It should actually be designed to put-off frivolous info-requests or un-committed responders. Your advert should pre-qualify responders as much as possible so don’t be afraid to indicate likely donation levels etc.
If you make your advert too unappealing though, your programme manager may ask you to change it or pay a higher cost per lead. Don’t try to include any website details or phone numbers in your copy – your programme manager will strip out all other response channels since you’re not paying him any media costs, only on results.
React quickly
Make sure that you have the brochures ready to send to responders. Depending on the programme, the leads that you are supplied will already be 0-48 hours old so you should quickly send the literature that consumers have requested on your charity. Where phone numbers are provided they should be called as soon as possible while the potential donor is still a ‘hot lead’. The worst thing you can do is to generate a large prospect donor database and then just sit on it for a week or two. The faster you act the higher your conversion of prospects to donors will be.
Monitor the quality and give feedback to your programme manager
If you’re getting leads supplied in a steady flow, monitor the quality and conversion and give feedback to your lead-gen programme manager. It will help him to see what sources of media are providing good leads and which aren’t. If he hasn’t pre-booked all the media for his campaign and is booking as he goes he can drop the worst media. Equally if you suddenly notice that the leads supplied are suddenly converting to donors at a higher rate than say the week before, let you programme manager know. He may have stumbled upon some really good media and be able to divert a higher percentage of his programme into this media improving your conversions.
Good luck with your campaigns!
Jason Andrews is the Business Development Manager for Evolution DM, a direct marketing agency based in Old Street, London.
Evolution have media-buying expertise in list-rental, 3rd-party inserts, online and offline lead-generation as well as offering various bureau and data-cleaning services. Evolution also act as exclusive managers for numerous list-rental, lead-gen and insert programmes.
Contact: 020 7017 3411
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About Howard Lake
Howard Lake is consultant editor of UK Fundraising. He founded the site in 1994 and successfully sold it in 2022. As director of Giving X Ltd he is exploring growing giving on a massive scale.
He is the founder of Fundraising Camp and co-founder of GoodJobs.