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 WASHINGTON, Nov. 17 ~PRNewswire~ -- The following was written b y Lee W. MacGregor and Philip M. Alexander of Alexander & MacGregor, Inc., Washington:
 As Republican fundraising veterans of the Carter presidency, we were active players in taking full advantage of the unprecedented fundraising opportunity the Georgia peanut farmer handed conservatives on a golden platter.
 There are similarities between the Carter era and the approaching Clinton era. But there are also some critically important differences from a direct mail fundraising standpoint.
 By way of background, when Jimmy Carter was in the White House, we both played a part in the historic growth in the size of the donor lists of national Republican and conservative organizations. This unprecedented explosion of donors continued almost unabated through the Reagan presidency.
 After the Ford debacle, literally tens of millions of successful prospect letters with Ronald Reagan's signature were mailed for Republican and conservative organizations. He deserves the academy award for his performance with Jimmy Carter getting the nod as best supporting actor.
 Today, the size of the "active" donor files of Republican organizations is down substantially from the mid-1980s. This is also the case with some conservative groups.
 If the early predictions about where the new president will first take action prove to be true, conservative public policy groups concerned with that large body of issues lumped in the "social" label will have the opportunity to substantially regain ground in the fundraising wars.
 Short of the appearance on the scene of a leader with the charisma and principles of a Ronald Reagan, it may not be possible to attain the numbers we reached in the 1980s. But then again, through new technology and other means, we might just be able to not only reach those levels but surpass them.
 The answer lies in no small measure with the future of predictive modeling. The need for this high tech approach to fundraising underscores the basic differences between direct mail funding then and now.
 In the Carter years, we could put a prospect letter in the mail in volume for 23 cents. Now it can cost twice that amount. But response rates haven't increased that much. And the average contribution, although it is now higher, falls far short of keeping pace with the higher costs.
 We will be one of the first to admit that one of the worst kept secrets among Republican~conservative organizations and agencies is that we all take turns mailing the same lists of prospects.
 There are probably 100 or so lists of members of organizations or donors to candidates and causes that we all wait in line to mail. These lists contain about 2 to 3 million names.
 And it's habit forming. After all, these people donate millions of dollars to Republican~conservative candidates and organizations each year. They are our lifeblood.
 How can we expand our donor base?
 We all have horror stories to tell when we've mailed compiled lists. One conservative organization was convinced that medical doctors would contribute to their cause.
 We dutifully put in the list order for a 5,000 name test. The results? The prospect package cost 55 cents in the mail and produced a resounding 10 cents per name mailed. We know of no organization that can afford to acquire donors at that cost.
 Are we to believe that in a nation were 38 million voters cast their votes for the top of the Republican ticket in 1992 that there are only 2 to 3 million people who would support their beliefs with a contribution? Of course not. The problem is how do you reach them economically.
 Enter predictive modeling.
 Let us caution you, don't run off to your computer software store to buy the latest software on "Predictive Modeling 5.0." It's not there.
 Right now the process can be very costly, although we believe in time it will be within the price range of most organizations. To develop a model or overlay, enough mail appeals must be mailed to a pure "nth" of a large broad-based or complied list with appended data to assure a statistically viable response group -- most often 100,000 pieces. So be prepared to spend some money.
 Respondents are compared to the file at large by their appended data -- information on lifestyle, spending, giving choices and any other data available.
 It is here that predictive modeling has evolved so dramatically from earlier efforts that relied on census tract data.
 Psychographic lifestyle, purchasing and giving choices form an overlay far more detailed than any kind of geographic prediction based on census tracts.
 Once the model for your organization is determined, you can mail sections of compiled lists using your own overlay.
 If psychographic predictive modeling doesn't fit into your budget, you should at least try some intuitive modeling on your own. Take a look at your donor list -- where are the zip codes where most of your donors fall? We know of some organizations who have had some success targeting their prospect mailing into their best zips. It's better than doing nothing.
 As postage rates and costs keep rising, we are going to have to use predictive modeling or a variation of it so our fundraising mail is not delivered to people who are not likely to be receptive to it. We just can't afford it anymore.
 Maybe your organization's "target audience" is left-handed, married males who subscribe to three craft magazines, vote in all school board elections, with wives who "pump iron" and have two children. If you don't know, you better find out -- because you're competing with commercial mailers who have spent a lot of money to send highly targeted mail to the recipient of your mail.
 And most important, we are also going to have to return to what helped us achieve record fundraising results under Ronald Reagan. And that is a return to basics and proven direct mail fundraising techniques that work and copy that sells our party and our cause.
 To start with, when you work your donor list, don't ever forget recency, frequency and dollar amount. This is the only sure basis for determining which donors you mail to. Believe us, it is etched in stone.
 And surprise. Surveys, polls and postcards to elected officials still work. They generate attention, get a message across, serve a purpose and raise money.
 In these days of higher costs, we are going to have to develop innovative cost cutting approaches to how we raise money.
 During the heyday of Republican~conservative fundraising in the 1980s, good fundraising lists rented for 8 cents a name. Today those same type of lists rent for 12 to 15 cents a name. We are not telling you not to rent these lists for your prospect mailings. We do for our clients and they work.
 But don't overlook where you can save money on list rentals. Frequently, the best prospects for your mailings are your own lapsed donors -- there is no list rental involved to drive up the costs of your prospect mailings. And if there are no restrictions, test non- donors with a different prospect mailing -- again, no list rental cost.
 And those large sized prospect packages are here to stay. Forget the doormat sized versions -- the Postal Service lowered the "whammy" on them with much higher postage. But the smaller ones generally seem to do better than conventional No. 9 or No. 10 sized packages. The reason -- they cost less to produce. They are produced "on line," which means basically you start with a roll of blank paper at one end of the computer~printing press and end up with a mailable package at the other end. Only drawback: not economical in small numbers.
 And you need to take a hard look at the costs of your business reply mail. It now costs 30 cents per letter, and 3 cents more if you don't use bar codes. Consider testing with a plain return envelope. You might be surprised with the results.
 Our observations on the challenges we face would not be complete without some thoughts on pricing policies in the list rental industry.
 They are going to have to make some basic changes in their rental pricing policies so we can more economically utilize new technologies like predictive modeling.
 Today, list rental prices are biased toward mailers who mail entire lists and penalize those who need more narrow selects of lists. These pricing policies are a throwback to the 1970s and 1980s when we could afford to mail entire lists. Well, we can't afford to anymore.
 We hope this serves as a "wake up call" to the list industry to change with the times.
 Another "wake up call" needs to go to any organization seriously considering agreeing to a joint list ownership arrangement with any agency.
 Under this arrangement, new donors to prospect packages are jointly owned by the organization and the agency. The agency is free to rent the names on the open market and keep the rental income.
 In the 1970s, the "early" days of direct mail fundraising when many new organizations were just getting started, limited joint ownership arrangements made sense and built up the donor lists of many organizations.
 But today, direct mail fundraising has changed dramatically from the "early" days. And organizations as well as agencies now have a much better understanding and appreciation of the real value of donor lists.
 There was a time when limited joint ownership served a purpose, but that time is long gone.
 Today it has become an ugly mutation that amounts to little more than a "fee enrichment scam" that can end up costing organizations dearly in terms of lost income from donors.
 Sometimes you will find it "masqueraded" as "Risk Free Prospecting." But don't be fooled by that line. You "can't have your cake and eat it too."
 If you truly believe joint ownership -- however it is disguised -- is beneficial to your organization, we know someone who would like to talk with you about buying a certain bridge in Brooklyn.
 In conclusion, Republicans~conservatives have to start getting "smarter" about direct mail fundraising.
 Will Bill Clinton give conservatives the same opportunity as Jimmy Carter did? The jury is still out. But we do know that if he does, Republicans and conservative public policy organizations have the ideological commitment, experience and, hopefully, the direct mail "smarts" to take full financial advantage of it.
 And welcome to Washington, Bill Clinton. We're out there and we're waiting.
 Alexander & MacGregor, Inc., offers a full range of direct marketing services, including but not limited to: consulting, creative, production and fulfillment coordination, media placement, premium programs and membership development. The company's emphasis is on creative innovation, cost consciousness and a results-oriented approach.
 -0- 11~17~92
 ~NOTE: If you would like an interview, call the contact below.~
 ~CONTACT: Lee MacGregor or Phil Alexander of Alexander & MacGregor, Inc., 202-833-5980 or, fax, 202-833-5986~

CO: Alexander & MacGregor, Inc. ST: District of Columbia IN: SU:

TW -- DC001 -- 1693 11~17~92 09:08 EST
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Date:Nov 17, 1992

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