Whether you love them or hate them, premiums are everywhere. In fact, about 60% of nonprofits’ solicitations include the use of premiums. Why are premiums used so often? It is because they work. Usually.
I know, I know…premiums don’t work for all nonprofits, and they certainly don’t work in all types of mailings. But the right premium in the right mailing to the right group of donors can yield incredible results. That’s right.
Why do premiums work?
The power of premiums is that they break-through the clutter in the donor’s mailbox and get noticed and get opened. As you know, getting the donor’s attention is half the battle. Premiums also give you an opportunity to convey your message in a new and creative way.
Premiums are often successful because of the principle of reciprocity, which says that in many social situations we feel obligated to give a gift when we get a gift. In other words, donors are more likely to make a contribution if they first get something from the nonprofit.
Premiums that can be used in public, like a tote bag or hat, offer donors an opportunity to more closely identify with your nonprofit. In that way, premiums can help your donors feel like they’re part of the cause, and that they are helping the mission by spreading awareness.
Premiums can be a smart strategy to use because they significantly increase response rates. Premiums, however, will also raise the cost of the package. That means you need to do careful analysis to make sure the tradeoff works in your favor. You should not just look at package results in the short term, but also track renewal rates and subsequent giving to ensure the long-term picture is favorable for your nonprofit.
Which premiums work?
There are so many options of premiums to use from hats, tote bags and fleece blankets to gardening tools, calculators and calendars. Some organizations have success with relatively inexpensive premiums and others have found more expensive premiums to work for them. Some groups include multiple premiums within one package to increase perceived value and add bulk to the package.
Remember, premiums that work for one nonprofit may not work for another. The key is to test different premiums and carefully track the results.
The very best premiums are those that connect directly to your nonprofit’s mission. So be creative and put your own spin on premiums. Find out what items donor’s value that are also true to your mission.
Examples of connecting the premium to the mission
The best way to explain how to connect a premium to your nonprofit’s mission is by looking at a few examples of nonprofits that have successfully used mission-based premiums. Here are a few:
The Wounded Warrior Project
The Wounded Warrior Project did a mailing that included shoelaces, an unusual and inexpensive premium, that definitely got the donor’s attention. The copy asked donors, “Can you imagine not being able to tie your own shoes?” Very powerful.
St. Jude Children’s Research Hospital
St. Jude Children’s Research Hospital has had great success using address labels as a front-end premium. Many organizations use address labels, but what makes these address labels especially successful is that the labels are printed with artwork created by the young cancer patients at St. Jude’s. This adds an emotional element that ties the address labels back to the kids the donor is helping to save.
St. Joseph’s Indian School
St. Joseph’s Indian School uses a dream catcher in the mail, and often pairs it with greeting cards, pens, or other smaller premiums they have meticulously tested their way into using. The dream catcher is a unique item that many people don’t own that is distinctly part of the Native American culture. Part of St. Joseph’s mission is to help preserve and promote the Lakota (Sioux) culture, and by sending dream catchers they are fulfilling part of their mission and raising money.
If you aren’t already using premiums, be sure to slowly test your way into using them. Be aware that donors acquired through a premium package may need another premium package to inspire a second donation.
Mission-based premiums are the most powerful premiums you can use. Donors will often enjoy receiving them, and you can feel good about sending them. Especially when you see the results!
References: 1. https://liberalarts.tamu.edu/blog/2018/11/08/does-giving-donors-stuff-actually-raise-more-money/