Promotional merchandise - Premiums by Post

THE ROYAL NATIONAL LIFEBOAT INSTITUTE

The RNLI uses targeted promotional incentives to attract high-value donors.

Its direct marketing team have found that offering carefully selected merchandise to sailing professionals has helped bring more supporters on board.

Its 'Off-shore Membership' targets active sailors. As most will have a vested interest in supporting the charity, many sailors are prepared to make a large initial contribution, and the scheme asks people to make regular donations starting out at £4.50 a month.

When new members sign up to the scheme, the charity sends them a branded hand-warmer, a re-useable plastic device that heats up when activated by a metal trigger in the product.

"The hand-warmer has proved popular because it has some practical use," says Geraldine Chetin, supporter marketing manager at the RNLI. The charity gets consistently high response rates from the pack, and found that when it removed the hand-warmer, response levels dropped.

SENSE

Sense, the deafblind charity, sent out a recruitment mail pack that told the story of Jordan, a deafblind boy who uses scent as a way to distinguish his environment. The charity found that including a sachet of lavender bath salts in the mail pack significantly improved response rates.

"As a charity, it's important to have a reason for including any gift or incentive, partly to involve people further with the cause, but also if there's a clear reason for the incentive - donors are then less likely to think it is a wasteful use of donations," says Kathy McKay, direct marketing manager at Sense.

The charity made sure that the envelope clearly indicated that there was something in the letter for the responder by using the strapline "Open up and be refreshed". The recipient could also feel that there was something inside the envelope. The pack has proved hugely successful for the charity and has helped it to recruit 10,000 supporters over the past two years.

HELP THE AGED

Help The Aged included a free advent calendar for its 2003 Christmas recruitment campaign to help show how the reader's help could open doors for older people so they wouldn't have to spend Christmas on their own.

The charity runs annual Christmas campaigns, but decided to use a free incentive to boost response rates and try to make the appeal stand out from the hundreds of other campaigns jostling for attention.

"This was a bit of a different approach for us," says Sam Heggie, spokeswoman at Help The Aged. "It was colourful and also very involving to the reader as you could open the windows on the calendar to find out about different areas of the charity's work."

The charity found that recipients responded well to the calendar. It attributes this to its traditional look and the fact that supporters could use it to gain a clear understanding about how their support could help the 40,000 older people who spend Christmas alone every year.

Mail packs with incentives such as pens have been a mainstay for charities, but Annie Kelly finds that saturation and public concerns may see them off.

Angie Kean is a woman in her mid-fifties and a long-standing supporter of environmental and children's charities. She has her own income, buys organic and is a textbook target donor. But she's increasingly unhappy about what's coming through her front door.

"Last month, I received about eight charity pens, plus various stickers, badges, fridge magnets and whatever else," she says. "I'm beginning to feel that charities might as well just send my money back to me."

Look around the average household and you're likely to find a collection of charity paraphernalia. As the voluntary sector grows and competition for support becomes fiercer, increasing numbers of chunky mail-packs containing everything from cuddly toys to chocolate bars are dropping through letter-boxes imploring people to make a donation.

Incentivising a response

Incentivising people to start supporting a good cause remains the lynchpin of many charities' cold recruitment strategies, with direct marketing managers pointing to consistently positive results as proof that sending out promotional merchandise still works.

Mark Astarita, director of fundraising at the British Red Cross, is a champion of the free promotional incentive.

"You can't retain someone until you've got them in the first place, and the figures show that sending out branded merchandise works as a recruitment tool," he says. "When I headed up fundraising at the National Deaf Children's Society, our pen and address label mail packs were three times more effective than the award-winning creative packs designed by professional advertising agencies."

Cancer Research UK also uses promotional incentives to kick-start committed giving. Although it carries a range of merchandise, the main product used is the ubiquitous branded pen.

Tens of thousands of Cancer Research UK pens wing their way to addresses across the country on a weekly basis, and marketing director Sarah Lyness believes that pens still generate more support than a door-drop or a cold recruitment pack.

"Basically, the response rates we get from the packs add up to more than the cost of buying the merchandise in the first place, and we haven't found anything to rival it as a fundraising method," she says.

The cancer charity shies away from using more overtly branded merchandise such as stickers or badge-pins. According to Lyness, this is because Cancer Research UK donors want to keep the relationship a private one, and the pen is a more personal way of encouraging people to give. However, she admits that her marketing team is in a strong position. As the UK's largest fundraising charity, it not only has high public awareness and large national advertising campaigns further pushing the brand, it can also buy pens in such volume to cut costs.

"When, like CRUK, you're doing 10 million-strong door-drops, the cost of each pen will go down to around 2p, so it becomes a very economically viable option for a charity looking for a quick return on investment," says Mark Middleton-Heath, managing director at direct marketing agency Catalyst.

However, he adds: "What is more intangible and less measurable is the 'perception cost'. If, over the space of a year, you are sent 10 Cancer Research UK pens from separate cold recruitment campaigns, how is that going to affect your long-term view of the charity and how it fundraises?"

Middleton-Heath is one of a growing number of voices to warn of the danger from the public's increasing scepticism of how charities go about their fundraising.

With fewer people giving and more charities clamouring for attention, appearing to waste donors' money through excessive or lavish direct mailings, or through spending money on promotional incentives, is becoming a risky business.

Amnesty UK is one voluntary organisation that is starting to see this happen. Joel Voysey, supporter recruitment manager, admits he was "surprised" at figures from recent recruitment campaigns that indicated that people weren't buying into the pen incentive any more.

"We've always used pens, but have now cut them out of our recruitment strategy altogether because our last two campaigns haven't been working as well," he says (Third Sector, 21 April).

Pen-packs have long been a pivotal characteristic of Amnesty UK's marketing strategy. Not only did they uplift response, but they also have a direct connection to the cause through Amnesty's long tradition of encouraging people to fight human-rights injustice through signing petitions and writing letters.

The end of the pen?

"Traditional incentives such as pens may have had their day," said Voysey.

"I don't know why they stopped working for us, but I surmise that people aren't as inclined to give as they used to be, and are starting to see pens as gimmicks."

The Royal National Lifeboat Institute agrees. It has never used pens as a promotional incentive and on the whole has avoided sending out giveaways in recruitment drives.

Research conducted by the charity showed that its target audience saw free charity products as wasteful, and would prefer it to spend donors' money directly on the cause. Although fundraisers could see this as an example of the public's misunderstanding of the way that modern fundraising works, the RNLI weren't prepared to take the risk.

"Pens and other similar tokens don't fit in with our philosophy," says Geraldine Chetin, supporter marketing manager at the RNLI. "On the whole we don't include incentives because we feel that it's the wrong way to start a relationship with a newly recruited donor."

Chetin believes that the proliferation of promotional incentives shows an alarmingly short-term approach to fundraising, which could eventually accelerate the backlash started by public antipathy to methods such as door-to-door and face-to-face fundraising.

"At the RNLI, we want to take a long-term approach to protecting our brand, and we are far more inclined to use promotional merchandise carefully and in a much more targeted way," she says. "We don't want to set a precedent where people expect to receive something before they've even given."

One of the main problems appears to be the sheer volume of charities using exactly the same fundraising methods. Middleton-Heath sees it as a classic case of bandwagon syndrome.

"On the one hand, the increasing numbers of charities using promotional incentives show that this is a recruitment mechanism that works, but as with a lot of charity work, fundraisers got lazy and stopped thinking for themselves," says Middleton-Heath. "My advice to my clients is don't just stick in a pen or a sticker. Yes, you may get an initial uplift, but you've got to think about retaining those supporters who will be receiving charity pens all the time."

And some charities are starting to change their approach to recruiting new donors. Barnardo's has outlined plans to pull away from traditional acquisition channels, and plough resources into developing online recruitment and retention campaigns to reflect its belief that younger donors don't respond well to direct mail drives. Greenpeace and Oxfam are also investing heavily in this area, attracting new donors through targeted email and web-based campaigns.

And fundraisers' ability to think creatively is likely to become even more important if Royal Mail pushes ahead with its plans to scrap the current system of costing by weight and introduce a new size-based pricing scheme.

This would mean that charities would pay a premium on all postage that falls outside the standard envelope size, and could have a catastrophic impact on charities' ability to continue to use incentive-led recruitment packs.

The National Trust recently conducted a direct mail recruitment campaign testing leaflets to fit the Royal Mail standard size that registered a 10 per cent decrease in response (Third Sector, 14 April). And, although the new costs are yet to be confirmed, the charity estimates that size-based pricing could cost it £40,000 a year.

"Promotional membership material such as our supporter magazine and property guide can't be reduced in size and the new pricing will put our costs through the roof," says Berry Darcy, direct marketing manager at The National Trust.

And Amnesty UK's Voysey says that the new pricing could seriously hamper many charities' ability to use incentives as a way of attracting new supporters.

"To be honest, when I saw that our pen packs weren't working, it was a huge relief because from next year we wouldn't have been able to afford them," he says. "If the new pricing comes in, charities are going to have to start thinking very seriously about different ways of approaching people, because falling back on methods such as pen packs won't be viable."

Postcomm consultation

Subject to the Postcomm consultation, size-based pricing could launch in September 2005. The Institute of Fundraising is currently calling on charities to take advantage of Postcomm's three-month consultation and voice their concerns. But Astarita believes that charity fundraising has the capacity to adapt and move with the times, as long as the sector keeps its eye on changing public attitudes.

"Charity direct mailers manage to persuade hundreds of thousands of people to give and not get much in return. We do it on a shoestring budget and our income levels are higher than any other major direct mail industry," Astarita says. "If we get priced-out by new regulations, or if the public turn away from certain incentives, then we will find something else to take its place."

CASE STUDIES

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