Here's an example of that analysis in action. It's a direct mail campaign. The organization's control package was a freemium notepad package. The test package removed the freemium. The thinking was that the freemium was an old folks gimmick and that it was a turn-off for more "mission minded" younger prospects.
Hypothesis: the freemium package would win over the mission package among older prospects and the opposite would be true among younger prospects.
The packages were tested with randomly selected panels from the client's continuation lists. We appended age information after the fact.
The age split that yielded the largest mail quantities for test reliability was at the 70 year mark. The 70+ year olds were mailed 21,000 of each package and the under 70 year olds got 15,000. This first point is that their DM continuation lists were weighted heavily toward the older end.
The graph below shows the response rates of the two packages by age:
As we expected, the Notepad package had a nice lift in response among the 70+ prospects (mostly Silent Generation). Contrary to our hypothesis, the Notepad also won among younger prospects (mostly Boomers).
The mind-blower is that the freemium had a higher lift with the under 70 crowd -- a 55% lift versus the 30% lift for their older counterparts.
The good news is that the control optimized performance from both age groups. But this finding also gives rise to developing freemiums that are specifically tailored to younger prospects.
I'll keep you posted.
This is a good test and analysis. Although I did not find the results to be surprising, would the following factors be at play as well?
ReplyDelete1. The gender difference in responding to freemiums. Females in general have longer lifespans and therefore there should be a higher concentration of female prospects in the 70+ group. And females would usually be more prone to freemiums. If that is the case, gender can be a confounding factor in this test.
2. As you pointed out, 70+ dominated the continuation lists. I would imagine that the 70+ group is also more likely to be on multiple lists and probably come from lists exchanged or rented from other organizations. If so, 70+ may have been exposed to more solicitations (from other orgs) with freemiums or premimums. This may dilute their likelihood of responding to your org.
3. The acquisition campaign timing could be interesting too. Suppose younger donors are more likely to be seasonal givers and the older people tend to give around the year. Then, if the campaign dropped in the season (say the year end), then I would expect the freemium to have a higher lift on the younger group.
Just some random thoughts for discussion. Thanks, Jon.
George Zhang
Thanks for your comments, George.
ReplyDelete1. The gender aspect could be at play here. Might be interesting to add this in the future.
2. Good point.
3. The campaign discussed here was in summer. I agree that season could be a factor. We'll keep looking at this at different seasons.
Hello, I am kind of new to the nonprofit world.
ReplyDeleteI have a [maybe stupid] question, what exactly is "freemium?"
Thanks
Ryan
facebook.com/rmhbuffalo
Ryan,
ReplyDeleteThanks for tuning in!
A freemium is a premium given up-front for free. Examples of freemiums are address labels, note cards, notepads, and booklets.
Jon