The impact of direct mail cultivation on donor retention
Experiment ID: #14762
Hillsdale College
Experiment Summary
Timeframe: 07/01/2018 - 06/10/2019
Hillsdale College was looking for new ways to help retain existing donors. Knowing the importance of good cultivation and stewardship, we wanted to focus on methods that could improve the frequency and method for communicating impact and gratitude to the donors. One hypothesis was to send post cards throughout the year that both thanked them for their support and reminded them of the impact their gift.
To do this, we isolated 350K donors and split it randomly in such a way that there would be equal representation for each donor lifecycle segment. Half of these donors would receive four post cards throughout the year in addition to the normal communication stream. The control group would just get the standard communications.
Research Question
Does sending cultivation and stewardship-focused post cards increase donor retention?
Design
C: No Post Card
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)
)
)
Results
| Treatment Name | Conv. Rate | Relative Difference | Confidence | |
|---|---|---|---|---|
| C: | No Post Card | 34.4% | ||
| T1: | With Post Card | 35.0% | 1.8% | 100.0% |
This experiment has a required sample size of 44,690 in order to be valid. Since the experiment had a total sample size of 352,108, and the level of confidence is above 95% the experiment results are valid.
Flux Metrics Affected
The Flux Metrics analyze the three primary metrics that affect revenue (traffic, conversion rate, and average gift). This experiment produced the following results:
0% increase in traffic
× 1.8% increase in conversion rate
× 0% increase in average gift
Key Learnings
Given the large sample size, we were able to validate a 1.8% increase in donor retention for those donors that received the post cards. But this is only part of the story...
When we exclude major gifts, we discovered there was no statistically significant change in revenue per donor. In fact, overall revenue was close to equal between the two segments. While we lifted retention by 1.8%, we saw a similar decrease in revenue per donor (not statistically significant) which resulted in the near-equal total revenue.
When we dug into the individual lifecycle segments, we did see some interesting trends:
- 2nd Year Donors - No statistically significant change in retention
- 2nd Year Reactivated - No statistically significant change in retention
- Key Multiyear - 1.7% increase in retention
- 13-24 Mo. Lapsed Reactivated - 2.3% increase reactivation with a 91% level of confidence
- 25+ Mo. Lapsed Reactivated - 5.6% increase in reactivation
In summary, we saw statistically significant lifts when reactivating lapsed donors and retaining long-time donors. It did not have much of an impact for the donors that had been acquired (or reacquired) the previous year.
When we factor in the costs to send the post cards and compare it to the incremental donors that were retained / reactivated, the total cost came to $157 cost to retain / reactivate. (This is the total mailing costs divided by the 1,099 incremental donors.)
Given these incremental costs with only a minor lift to retention (and no impact on revenue), this style of cultivation does not seem to be sustainable long term. It would be worth retesting the concept if we can reduce the number of mailings and / or potentially increasing the targeting and relevancy based upon the donor's anniversary or specific appeal mailings throughout the year.