Acquisition

Direct Marketing 201Direct Marketing 201

AcquisitionKatie Valvo

Associate Director, Acquisition

The Nature [email protected]


Audience BalanceBalance High Value Audience GrowthList TieringCooperative Data

CreativeMultivariate TestingPackage to AudienceHigh Value

Direct Marketing 201

Mail Volume increased by 10% from FY07 to FY10


Average Gift Falls Year-over-Year


Recession begins in September 2008 (FY09) – average gift had already fallen against

FY08 Average Gift

Jun; FY08; $18.89

Jun; FY09; $16.44

Moving average trend line with period = %PERIODR² = NaNMoving average trend line with period = %PERIODR² = NaNMoving average trend line with period = %PERIODR² = NaN

FY08-FY09 Average Gift Overall

Aver

age

Gift


Response falls then bounces back


With the increase of QTY in FY08, response dropped by 10% and the Av Gift drops over

$1 less than FY07


Package TrendsDid a change in the mix of packages used or

a decline in performance in one package negatively impact FY09?

Program has been very reactionary from heavy testing, economic conditions and package-driven performance months.


Lists – Performance by TiersLists used in the previous fiscal year were ranked by net/donor, excluding the calendar mailing. For the following fiscal year:

• Lists in the top 25% of net/donor are labeled Tier 1.

• Lists in the next 35% of net/donor are labeled Tier 2.

• Lists in the final 40% of net/donor are labeled Tier 3.


There is a significant drop in the use of Tier 2 lists. We need to be diligent on list universe make-up.


Another View: Tier 1 increases Yr Over Year, With Tier 2 Shrinking & Tier 3 increases – FY10

Appears to be on a Good Start


60% of universe on Test & Tier 3 Lists & highest Cost/Donor – directly affect the bottom-line


Average Gift Softened Most with Tier 1 Lists


Environmental Lists Impact All Tiers


ImpactFY11 - Present


Creative


Multivariate Test Design

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Recipe A B C D E F G H J K L M N O PQty

MailedResponses

Response Rate

Avg Gift RevenueAvg Gift

(w/o outliers1)Revenue

(w/o outliers1)Revenue1

/ 1,000 mailedNet Rev2

/ 1,000

1 – – – – – – – – – – – – – – – 19,916 271 1.36% 16.65 4,512 16.19 4,387 220 2202 + – + – – + – + – + – + + – + 19,906 239 1.20% 15.77 3,770 15.42 3,685 185 1513 + + + – + – – – + + – + – + – 19,902 207 1.04% 15.71 3,252 15.47 3,202 161 1184 + – – – + + + – + – + + – – + 19,911 241 1.21% 16.10 3,881 15.69 3,781 190 1555 – + – – + + – + + – – – + + + 19,904 164 0.82% 18.99 3,115 18.77 3,040 153 1406 – + + – – + + – – + + – – + + 19,900 214 1.08% 16.86 3,607 16.86 3,607 181 1697 + – – + + – – + – + + – – + + 19,914 186 0.93% 18.17 3,380 18.17 3,380 170 1408 – – – + – + + + + + – + – + – 19,924 200 1.00% 17.92 3,584 16.85 3,370 169 1649 + + – – – – + + – – + + + + – 19,918 205 1.03% 14.69 3,011 14.32 2,936 147 106

10 – – + + + + – – – – + + + + – 19,903 197 0.99% 15.85 3,123 15.60 3,073 154 15011 – – + – + – + + + + + – + – – 19,900 266 1.34% 15.21 4,046 15.15 4,031 203 20112 + + – + – + – – + + + – + – – 19,916 212 1.06% 16.49 3,495 15.78 3,345 168 12613 – + + + – – – + + – + + – – + 19,919 280 1.41% 17.36 4,860 16.49 4,616 232 21814 + – + + – – + – + – – – + + + 19,909 212 1.06% 18.02 3,821 18.02 3,821 192 16015 + + + + + + + + – – – – – – – 19,919 234 1.17% 15.51 3,629 15.51 3,629 182 14016 – + – + + – + – – + – + + – + 19,922 281 1.41% 15.17 4,264 15.00 4,214 212 200

318,583 3609 1.13% $16.45 $59,350 $16.20 $58,117

1 26 outliers adjusted ($0.01 removed and all > $50 ($60-$134) adjusted down to "$50" as the value)2 Less the cost of elements A, B, C, F, J, and M


0.00%

0.00%

0.00%

0.01%

0.02%

0.03%

0.04%

0.04%

0.04%

0.06%

0.06%

0.06%

0.09%

0.13%

0.28%

0.00% 0.10% 0.20% 0.30%

K+: Font in letter

D-: Envelope teaser

L-: Underline passages

B-: Envelope texture

P+: Ask highlight

J-: Images from calendar

E-: Ink stamp on envelope

N-: Asks

H-: Tangibles letter

C+: Envelope color

M+: Calendar sticker

G+: Reply form

A-: Back-window envelope (control)

F-: Letter format (control)

O-: Upgrade ask (control asks)

Effect (Avg RR of test - control)

The Nature Conservancy Calendar Test: Response Ratecontrol = 1.36%, optimal = control

Elements: sign of effect (optimal setting)

Significant effects(beyond line)


0.85

2.80

3.61

4.12

4.31

4.70

4.81

7.07

8.87

11.44

13.64

15.71

20.96

32.97

45.91

$0 $10 $20 $30 $40 $50

J+: Images from calendarK-: Font in letter

L-: Underline passagesG+: Reply form

M-: Calendar stickerH-: Tangibles letter

D+: Envelope teaserC+: Envelope color

E-: Ink stamp on envelopeN-: Asks

P+: Ask highlight (yes, asterisk)B-: Envelope texture

F-: Letter format (control)O-: Upgrade ask (no)

A-: Back-window envelope (control)

Effect (Net Rev/1k of test - control)

TNC Calendar Test: Revenue - incremental cost / 1,000 mailedcontrol = $220.28, optimal = $233.92 (6.2% increase)

Elements: sign of effect (optimal setting)

Five significant effects:

A-: Control envelope is better (by 20.8%) with a cost of $29.85 / 1k for the new OE

O-: With the drop in response, the upgraded asks have a negative impact on net revenue (hurt 15.0%)

F-: Larger letter format hurts net revenue by 9.5%at a cost of $1.80 / 1k

B-: Bubble-padded OE hurts net revenue 7.1%at a cost of $9.80 / 1k

P+: Highlighting one ask increases revenue 6.2%


Optimal PackageTest Element Control (-) New Idea (+)

A Back-window envelope Control OE with window on back (calendar showing through)B Envelope texture Control Bubble-padded faux OEC Envelope color Control New colorD Envelope teaser No Add OE teaser ("2013 TNC Calendar Enclosed")E Ink stamp on envelope No "Do Not Bend" ink stamp on OEF Letter format Control (8.5 x 14") Larger (8.5 x 17")G Reply form Control Redesign reply formH Tangibles letter Control letter Tangibles letterJ Images from calendar No Add images from the calendarK Font in letter Control Use larger font in letterL Underline passages No Yes, underline passages in the letterM Calendar sticker Control Add sticker on front of the calendarN Asks Control 3 asks ($10, $15*, $25)O Upgrade ask Control Higher target ask ($10, $15, $25*)P Ask highlight Control Asterisk on target ask ("this amount will really help")


Package to Audience Mix

and High- Value


Audience Balance Balance High Value Audience Growth List Tiering Cooperative Data

Creative Multivariate Testing Package to Audience High Value

THANK YOU!

Acquisition

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