Direct mail strategy is important, but there’s nothing more reliable than rock-solid tactics—starting with your humble reply envelope.
The client wasn’t happy.
The acquisition mailing hit boxes more than a month ago, but not a single envelope was returned. Almost $8,000 dollars in production and postage costs down the tube.
The consultant on the account called me in a panic. “Have you ever seen this before? What could have happened?”
I asked if the client had called the post office—because I had a suspicion that this client was waiting on a windfall. The consultant, understandably, wasn’t about to send the client on a wild goose chase. So, I asked if they used BREs, or business response envelopes. “Why would that matter?” she asked.
“If the client hasn’t paid their permit and postage fees, there’s a decent chance there’s a bin full of return envelopes with checks inside just sitting under a desk at the post office,” I replied. “They won’t call you, they’ll just hold the envelopes.”
At the consultants’ recommendation, the client called the local post office. An hour later, they paid the late fees and $2.01 postage per returned envelope and went home with a bin full of donations. The mailing was a success—like most acquisition campaigns, the initial revenue didn’t quite cover the cost of the mailing, but they had dozens of new donors whose support over the next couple of years would far exceed the cost of that mailing.
This is just one of dozens of such cases I’ve seen over the last 30 years in which nonprofits have wasted significant time and money in their mailing programs.
Many nonprofits today have invested in solid direct response messaging and a smartly designed mailing calendar.
But when it comes to direct response, it’s not just about the strategy. It’s about the tactics. Take the difference in returns between BREs and CREs.
A business reply envelope (BRE) has a printed indicia that says “No postage necessary if mailed in the United States” or something similar. When donors respond, the organization pays the return postage (first class plus an additional charge and about $370 to $3,670 in other annual fees). The idea is that by saving the donor the trouble of affixing a stamp to the return envelope, they’re more likely to put the check in the mail.
A courtesy reply envelope (CRE), by contrast, requires the donor to attach her own stamp. This saves the organization quite a bit in fees and postage, but many fear that asking donors to affix a stamp would depress reply rates, costing them much-needed revenue.
Like everyone else, I always thought BREs would deliver much higher response rates, and probably a slightly higher average donation amount. But over time, that’s not what we saw.
In fact, the more tests we ran for clients, the more we saw CREs outperform BREs.
Could our clients really be paying BRE fees and return postage costs for no reason? We decided to follow the old direct response axiom: Don’t guess. Test.
In the first test, randomized 50/50 acquisition mailing to just over 2,100 homes, we were shocked to find that CREs outperformed BREs by a significant margin. The client, a conservative think tank and publisher on the East Coast, saw the CRE responses outperform the BREs with almost triple the response rate (8.21% to 2.99%) and more than triple the average gift amount ($182.78 to $53.38). This was fascinating, but the outsized results and relatively small mailing curbed our enthusiasm. We needed another test.
Another client agreed to run the BRE vs. CRE test, but with two much larger mailings—500,000 pieces each. For the first mailing, both groups saw nearly identical reply rates but the CRE yielded a 12% larger average gift ($54 vs $48). The second mailing, the BRE had a higher reply rate (.29% to .23%), but the CRE saw an 18% larger average gift ($74 to $54).
In almost every case, CREs outperformed BREs in terms of our clients’ return on investment and ease of use . What we can’t say for sure is why this is the case. It may just be that if you're the type of person who donates via post, and you’re going to pick up a pen and write a check for $50 or more to a nonprofit, the need to put a 78 cent stamp on the envelope isn’t going to stop you. As to why this donor gives more on average, it’s hard to say. They just tend to do so.
From my work with hundreds of nonprofits, I can’t see a reason to use BREs at all. Why worry about the permit and postage costs if it doesn’t get you a significantly better ROI? Especially since missing a fee or postage invoice could result in you not receiving any replies. For a small nonprofit, monitoring your monthly postage balance and permit status can be major headache.
Will that work with your donors? Test it.
In my experience, I’ve tested everything from carrier design to opening stories to reply device ask strategies. I’ve researched postage rates and USPS promos (which can save you money), not to mention staying on top of printing and production efficiencies—many of which are overlooked even by seasoned mailing experts. Here’s another recent example.
One nonprofit I work with does a huge volume, mailing several pieces every year to each of their two million members. Before we came alongside them in their mission two years ago, they didn’t know about U.S. Postal Service promotions and discounts available to high volume customers like them. It turned out they qualified for a USPS postage promotion discount of 4%, saving them thousands of dollars in postage costs.
Sometimes, when you hire a fundraising consultant like yours truly to manage your direct response program, it can have a huge impact on both strategy and tactics. Make sure you’re getting the biggest possible bang for your direct response buck.
