Are You Benefitting from Database Co-ops?

Nonprofit organizations acquired and reactivated donors in 2020 at performance levels that have not been seen since before the recession in 2008. The growth in new donor acquisition was remarkable, to say the least!

The universe availability for those participating in the many co-ops that are available offered bonuses for many of Masterworks’ clients. Masterworks’ clients who use both co-ops and traditional lists saw:

  • Co-ops provided 89% of the universe mailed and 89% of new donor responses.
  • Average gift sizes from co-ops were $5.00 higher than those delivered by traditional rental lists.

While co-ops shined in these performance metrics, other important metrics relative to cost are what made co-ops truly attractive. As compared to traditional rentals:

  • Cost to acquire was $10 lower.
  • ROI was 20% higher.
  • List CPM was less than half of that from rental lists!

With performance metrics such as this, why are some nonprofits resisting the use of co-ops?  Every conversation surrounds concerns about privacy and data security. And, those conversations should be had, not only with your agency but also with co-op providers as well. 

Let’s review the “what, who, when, and why” of co-op participation and data contribution.

What is a co-op?

In a nutshell, a co-op is a large universe of names and addresses whose transactional information has been supplied by nonprofit organizations and consumer companies. There are several co-ops that nonprofit organizations can rely on to deliver new donors through their use of robust statistical modeling techniques.

Who uses a co-op?

Nonprofits and consumer companies alike should be! I like to think of these as powerful repositories for the greater good of not only marketers, but also for consumers. Those using co-ops benefit from powerful models targeting the ideal prospect who is most likely to be receptive to your offer.

When is the right time to use a co-op?

With your next direct mail acquisition campaign! Just like direct mailers learned the power of testing into traditional rental lists to build prospecting universes, testing into various models within a single co-op, as well as testing into multiple co-ops, is a must.

Why use co-ops?

Co-ops provide a new universe of names beyond those offered by traditional rental lists, delivering more high-value donors than you may have previously thought possible. Prospects supplied by co-ops have been scored and selected through statistical modeling techniques that can be geared towards responsiveness and/or higher average gift sizes. Organizations that participate in co-ops can also benefit from a myriad of other solutions offered, such as house file modeling to lapsed donor reactivation to major donor prospecting. Opportunities for improved performance metrics abound with co-op participation and testing!

Let’s circle back to the significant privacy issue:

  • Cooperative database companies maintain strict confidentiality about existing members.
  • Several databases are considered blind databases.
  • Member participants cannot be told what other organizations also belong to the co-op. This confidentiality is a value proposition that co-op companies hold steadfast.
  • Participation does not impact your house file results.  If you are still concerned or unclear about how your donors’ transactional data is used, ask the hard questions of the co-ops themselves. All are happy to clarify and discuss.

If you are an organization who has tested into a co-op, I applaud you! Understand your acquisition goals and begin testing into more of them.

If you are an organization that is still skeptical about what this means for your donors and their transactions to you, I urge you to reconsider. As this past year has shown us, direct mail continues to be a powerful channel. Maximize it to its full potential and reap the benefits that co-op participation can offer you.