Why Response Rates Don’t Matter

It always frustrates me to hear fundraisers or their consultants concern themselves with vanity metrics like response rates for lead generation efforts. 

Honestly, I’m tired of hearing it!

Way too often, we (at MarketSmart) find ourselves being asked about our response rates resulting from our outreach efforts to our customers’ supporters.  But, I wonder, “What difference does it really make if we garner a 1% response rate or 20%?”

Lead generation marketing isn’t about generating percentages— it’s about creating opportunities that are likely to result in revenue (as soon as possible).

For instance, would you rather have a 25% response rate to outreach such as a donor survey (completed surveys) or would you prefer 100 highly qualified leads with hi-value, hi-capacity, hi-potential, wonderfully passionate supporters instead?

25% response rate VS. 100 great leads? Hmmmmm.

If your answer is that you’d prefer a 25% response rate, you might want to unsubscribe from your subscription to this blog right now.

Still with me? Great!

Clearly, you recognize that the purpose of lead generation marketing is not to just garner a response rate, it’s to support the revenue development process in a way that is tremendously cost-efficient. As we say in our office, “You are one of us.”

You are likely to tell your boss (or your consultant) that lead generation is just one step in the process of raising major gifts (and legacy gifts), and response rates make up just one component of that one step. Then you’ll probably talk to them about results.

Here’s one example of the results a devoted MarketSmart customer attained over 2 years (with our software and service assistance):

  • 1,447 leads total generated so far, completed surveys [By the way, this customer only averages a 1.8% response rate although she doesn’t care that the figure is so low.]
  • 1,211 of those are qualified but deferred leads not ready for 1-to-1 outreach yet but receiving value-oriented automated cultivation that helps them move themselves through the consideration process on their own so they build desire for giving without any pressure or friction.
  • 142 are qualified leads because they said are considering giving [And remember, we focus on major gifts and legacy gifts here at MarketSmart].
  • 45 said they already left a gift in their will or estate plan totaling over $3.8 million in potential realized bequest revenue.
  • 7 said they would like to talk to a gift officer now and 5 of those actually agreed to a meeting right away.
  • 81 said they were likely to accept outreach from a Gift Officer resulting in 41 more appointments set over time.
  • 33 said they wanted to share information with a friend, family member or colleague about the organization (this is called a ‘referral’) resulting in 7 meetings and one new board member.
  • 67 said they were likely to give from their donor-advised fund or family foundation and an additional 127 said they were somewhat likely to do the same.
  • 31 said they were likely to give financial assets (such as stocks, bonds, mutual fund shares or the contents of a savings or money market account) and 113 said they were somewhat likely to do so.
  • 9 said they were likely to transfer their IRA (roll it over) and 54 said they were somewhat likely to do so.
  • 3 said they were likely to give real estate and 9 said they were somewhat likely to do that.
  • 10 said they were likely to make a gift to receive income for life (such as a gift annuity or a charitable remainder trust) and 41 said they were somewhat likely to do that.
  • About 1% of the respondents are over 90 years old, 8% are 80-89, 26% are 70-79, 34% are 60-69 and the rest are under 60.
  • 25% have no children.
  • 7% updated their contact information for the organization including either their address, email address, or phone number (often providing their direct line in the office or even their cell number) making contacting them much easier.
  • And, 89% opted-in for follow-up (automated) email cultivation.

The total pipeline of potential revenue resulting from our collaborative efforts is now at least $25 million based on how this organization decided to carve it up. I believe it actually should be valued at over $100 million.

Of course, all of that revenue might not become realized. Or, perhaps it might become increased. That’s not MarketSmart’s job, it’s the fundraiser’s.

But, after reading all that, do you see any reason for her or anyone else to care about the meager 1.8% response rate percentage? I don’t.


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