Not your transaction costs, the donor’s.  Why does a mailing to a well curated list of folks garner such a low response rate?   It’s only one of two reasons,

• A bunch of people on the mail list shouldn’t be – i.e. the list sucks reason
• The cost in time, convenience to give your mailing attention is really high – i.e. the donor’s transaction cost.

In truth, it’s probably a mix of both but I’d argue the transaction cost is the far bigger one.  In B2B marketing there is 95-5 rule, meaning at any given point only 5% of your market is “in-market” for your offering.  The same is likely true for charitable direct marketing when properly defining the myriad ways that transaction costs can get in the way.

Donors Not Even Opening Envelope

• Donor just gave (either to you or someone like you).  For this donor the loss of not giving to the same group or similar one is very low.  The cost in time and feeling unappreciated  or annoyed because their name was sold is high.  Best to throw it in the trash immediately.
• Donor is busy – these three words could probably be rewritten 10,231 times followed by a different busy reason each time.

Donors Open Envelope But Don’t Read

• Donor habitually sorts mail at the same time in the same way and decides to open your mailing but doesn’t have time in their routine to read it.
• Donor sets aside the open mail with the intention to read it but never does and it gets put in trash bin at end of week.

Donors Open Envelope and Read but Don’t Donate

• The reply form is the only obvious way to donate or the one that seems to be preferred by the charity and this donor hasn’t written a check in years
• The reply form is in six point font and they don’t have readers handy, get annoyed and throw it away
• They have readers but don’t have a checkbook handy and throw it away
• They have readers and decide it feels like way too much work to fill out all the fields

These are all transaction costs felt by your donor.  There are myriad, unique ways to tackle the different ‘failure’ points where transaction costs > the psychological reward of donating.  Lowering Open transaction costs is very different from lowering them in the Keep and Convert stages.

Here’s one great example at the Convert stage as fodder for generating further ideas to lower transaction costs for those at the bottom of your funnel, staring at your reply form.

That’s it, just fill out the form a bit with the payee details (for bank transfer) and increase response by 26%.  This exact test isn’t the point but rather, the amount of money left on the table by making it inconvenient to donate at the precise time I’m ready to do so.

Transaction costs are a killer.

Kevin