E-mail Appends: The Good, the Bad and the Realistic

Done correctly, this once-maligned strategy can be a real boon to your list health.

by Catherine Algeri - Posted originally at www.FundraisingSuccesMag.com

Aug 1, 2008

As with any new industry, the early days of online fundraising were filled with both success and failure. Some organizations quickly found a new stream of revenue … while others found themselves struggling to get out of that black hole known as the spam filter.

Now in 2008, a year where political donors broke every record for online giving — even contributing $10 million on a Web site in one night — organizations can move forward with online outreach knowing that others have blazed the trail before them.

Over the last five years, fundraisers have found a successful model for reaching out to their donors online in the form of the well-coordinated e-mail append.

A definition
The e-mail append at its best takes a portion of your donors and activists — those with whom you have established relationships — finds corresponding e-mail addresses and gives these donors a chance to decide if they want to hear from you via e-mail. It then appends these names to your files.

Common fears
Before I outline the difference between a good e-mail append and the type likely to relegate you to the spam folder for all time, let’s address the immediate concerns most nonprofits raise when considering an e-mail append.

1. I’m afraid an e-mail append will make me spam!
This fear speaks to the difference between a good e-mail append and a bad one. The early days of e-mail append certainly generated a few horror stories. Fortunately, the industry has really learned from its mistakes. Today, most reputable vendors send welcome e-mails on your behalf — on their own servers — and only return the valid e-mail addresses that did not opt out of e-mail communication. This way, when you start e-mailing these addresses, you’re in the good graces of your donors and the Internet service providers.

2. I’m afraid I’ll be wasting my money!
According to the article “Get An Email Address, Generate Income,” in the April 15 issue of The NonProfit Times, the average worth of an e-mail address on your file is $7.86 a year, per Convio’s recently published benchmark study on e-commerce between July 2006 and June 2007.

In fact, many nonprofits bring in $5 to $10 in contributions for every $1 spent on e-mail append processing, according to the article “Email Append: Hot online strategy or too hot to handle?” in NPT’s March 15 edition. Considering that you can append multiple e-mail addresses for $1, there is a low level of investment required to find out how valuable your e-mail addresses will be — and the research is in your favor.

3. I’m afraid I’ll anger my donors!
An e-mail append that gives your donors the chance to say no (opt out) to hearing from you via e-mail shows your donors that you respect their preferences.

Complaint rates for e-mail appends often are as low as half of 1 percent. Ask your vendor if it uses the Direct Marketing Association’s Email Preference Service list. What’s more, if you work with a vendor that has an aggressive suppression file, taking out those people who have hit the spam button or complained on e-mail appends for other clients just might whittle your list down to your friendliest donors.

Remember, these people are your donors because they care about your mission. Sending them e-mail updates between fundraising efforts is a great way to show them that you don’t just write when you need something, but that you value their participation. In reality, e-mail will strengthen your donor relationships, not weaken them.

4. I’m afraid an e-mail append will hurt my direct-mail program!
Think of it this way: There are two organizations in the same field — one has sent you a mail piece, and the other has sent you a mail piece and e-mailed you a reminder and an e-newsletter highlighting its successful use of donations. It’s likely that the organization making the extra touch will stick out in your mind. What’s more, many nonprofits are doing matchback analysis to keep track of how online and mail campaigns are working in tandem — and are thrilled with the results. In an increasingly competitive market, e-mail can bolster your direct-mail results.

The good e-mail append
Here are some questions you’ll be glad you asked your vendor and the answers you should be looking for:

Q. Is the database permission-based?
A. E-mail addresses should never be guessed or deduced. Your vendor might not be able to reveal every source of the data, but it should be able to confirm that every e-mail address has opted in to third-party e-mail messages.

Q. Are you CAN-SPAM compliant?
A. Breaking the law generally is a bad way to kick off a fundraising campaign! Congress passed the CAN-SPAM Act of 2003 to protect consumer e-mail rights. Make sure your vendor complies!

Q. Do you send a welcome message or just add the data to my file and ship it back to me?
A. If anyone offers to slap some e-mail addresses onto your file and then hand them back to you … run like the wind! A welcome message protects your server score with the ISPs and ensures that you only add valid, permission-based e-mail addresses to your file. Plus, no one wants to pay for bad e-mail addresses.

Q. What is your typical match rate?
A. This will help you set realistic expectations and strategies for your campaign. It also is an opportunity to find out if your vendor can do a name and postal address match. If it is able to link postal information, this typically increases the number of ways you can find a new e-mail address.

Q. Do you have a multivendor approach?
A. No vendor has all the e-mail addresses in the United States. See if your vendor is able to check your file against multiple databases, remove duplicates, and handle the process for you and your staff.

Q. Do you charge based on all matches or just valid matches (post-welcome message)?
A. Again, no one wants to pay for bad e-mail addresses. Make sure you find out up front if the vendor charges for every match found or for every valid match returned to you post-welcome message.

Q. Is this a household match or an individual-level match?
A. A household match is an e-mail found for the postal address of your donor. An individual match is linked specifically to your donor. If your cause is political or controversial, an individual match is critical.

Q. What type of a suppression file do you use?
A. Ask the vendor if it maintains a suppression file of complainers, bad addresses or spam-button pushers. Also ask if it uses the DMA Email Preference Service file as suppression.

Managing your expectations
Before you pitch the e-mail append to your boss or your board, make sure you are managing your expectations, which means avoiding these common fantasies:

Fantasy No. 1: I will immediately make money!
Yes, the average value of an e-mail address on your file is $7.86 a year. Yes, many organizations are recovering five to 10 times what they invested. But this did not happen with one e-mail; nor did it happen without a strategy. When you mail a 48-month lapsed donor, what type of response rate are you expecting? Look at your audience, and determine realistic response rates. E-mail is a fantastic way to cultivate your lapsed donors at a low cost.

Fantasy No. 2: An e-mail address will be good for all time!
E-mail updates are critical to the health of your file. When’s the last time you considered mailing a file that you hadn’t NCOA’d in the last six months? Out of the question, right? Well, it’s estimated that people change e-mail addresses at a rate of 20 percent per year. Continuing to e-mail addresses that ISPs have bounced back to you is a recipe for spam.

Side note: How does an e-mail update work? Similar to an e-mail append, you send a file of hard-bouncing e-mail addresses to a reputable vendor. It will search its permission-based databases for new e-mail addresses linked to your records. Then the vendor will send a “welcome back” message to those e-mail addresses on its server. It will return only those e-mail addresses that are valid and have not opted out of hearing from you at this new e-mail address.

Fantasy No. 3: If they didn’t opt out the first time, I don’t have to use an opt-out link in the future!
Not so fast. Giving donors an escape hatch in every e-mail is the best way to keep them from hitting the spam button. DMA guidelines [see box above] require that you give your donors the chance to opt out with each e-mail.

The final question
Why do you need to e-mail donors? Donors are critical to the health of our organizations, but it’s not an exclusive relationship. They are donating to other organizations and, increasingly, are being approached online for gifts.

In fact, FY 2009 budgets for most direct marketers, on average, have planned for a 55 percent increase in e-mail prospecting budgets, according to the article “Less for More” in the June issue of Direct. Staying at the forefront of your donors’ minds with e-mail has gotten much easier — and far more critical.

Plus, didn’t you hear? The average yearly value of an e-mail address on your file is $7.86!