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Use Of Premiums, Freemiums Rises In 2004

(July 6, 2004) Nonprofit organizations have increased the use of donor incentives across most categories during the first quarter of 2004, according to a recent study by ParadyszMatera's MarketTrends, which tracked offers and promotions in the disease/health, nature/wildlife and humanitarian fundraising categories.

Premiums, or back-end incentives, were used by 37 percent of mailers, while "freemiums"¨ or front-end incentives, were used by 41 percent of organizations. By contrast, in the first quarter of 2003 the use of premiums was at 32 percent while the use of freemiums was at 36 percent.

Within the freemium category, address labels were the most popular incentive overall used by nonprofit mailings. Of all fundraisers tracked, 26 percent used address-label freemiums in the quarter, up from 23 percent last year.

Other freemiums provided by nonprofits in the quarter included:

  • Stickers (13 percent)
  • Greeting cards (4 percent)
  • Calendars (2 percent)
  • Other types of freemiums, such as note pads (10 percent)

According to the report, personalized labels and notepads seem to be rising in popularity among nonprofits.

There is also a notable incentive increase in specific fundraiser categories.

  • The disease/health category saw a 9 percentage point rise in freemiums used in the first quarter compared with all of 2003. The overall incentive use was 52 percent -- roughly equal to what the category saw in 2003.
  • Ninety-nine percent of organizations in the nature/wildlife category used at least one incentive. Freemiums were used by 57 percent of charities, up five points from 2003, while premiums were used in 98 percent of the mailings.
  • For humanitarian fundraisers, 39 percent of promotions included incentives in the first quarter, up from 38 percent in 2003.

ParadyszMatera is a list brokerage and research company headquartered in New York that develops its reports through a proprietary direct mail promotion-tracking tool. More information on ParadyszMatera and its reports can be found at www.paradyszmatera.com.

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