Sustainer Donor Value

Sustainer Donor Value

We recently did some analysis on a client’s sustainer or monthly pledge donors. The client wanted to see how much donors were worth AFTER joining the monthly pledge program compared to their value BEFORE joining the program. While this wasn’t a test and we can’t directly prove cause and effect, we do find that the donors were worth $52 more – a 24% increase – after joining the monthly pledge program. If those donors stay on the program and maintain that difference in value, that’s an additional $260 over five years for every donor that joins the monthly giving program. So, maybe that means that they can afford to invest a little more in converting annual donors to monthly pledge donors. If they get an additional 200 donors to become sustainers each year, that’s an additional $10,000 each year. So, that’s $50,000 over 5 years. With an additional 200 new sustainers EACH year that’s $150,000 cumulative over 5 years! So maybe that means the organization can also spend a little more to cultivate and thank those donors once they become monthly sustainers. Even with a welcome package that costs $10 and another $10 invested in cultivation each year, that still leaves the organization with an additional $200 net per donor over 5 years. Pledge donors are more valuable. Are you treating them that...
The Medium and the Message

The Medium and the Message

I recently read an interesting article that reported on research from the USPS. It’s called “Why Direct Mail is More Memorable”. Now, the Post Office certainly has a vested interest in promoting direct mail, but aside from that, it’s a worthwhile read. If you have an extra 3 minutes, you should check it out. To summarize the study, the USPS partnered with the Center for Neural Decision Making at Temple University’s Fox School of Business to do the research. They studied people’s response to mail and print ads using Eye Tracking, Core Biometrics and Functional Magnetic Resonance Imaging – high tech stuff. Their findings? The article reports that the study participants spent more time with direct mail and print ads than they did with digital ads and they also remembered the messages more quickly and confidently with direct mail and print ads. “Physical ads elicited a stronger emotional response than their digital counterparts and, overall, had a longer-lasting impact.” Their conclusions are no different than what most savvy marketers already know – an integrated campaign is always the strongest campaign. We are creatures that like to touch things, interact with things. Including direct mail in a campaign gives a distinct advantage in being able to deliver a deeper...
More is Not Always More

More is Not Always More

As we Atlanta Falcons fans know, just because you’re ahead at halftime doesn’t mean that you’re going to win. More is not always more. We all know that Acquisition Strategy is important for donor long-term value and for a non-profit’s long-term income, but HOW important? I recently did some analysis for a non-profit, and the numbers were striking – especially when looking at the donor’s initial gift size and the subsequent LTV. Due to a change in Acquisition Strategy, the new donor average gift jumped 48% from $46 to $68 between FY14 and FY15. And the projected 5-year LTV for the FY15 new donors jumped 49% over the LTV for the FY14 new donors, from $159 to $237. Not surprisingly, with the new acquisition strategy, the client had a decrease in number of new donors. But, with a 10% decrease in number of new donors, there is still a significant increase in revenue over 5 years: 5,000 new donors X $159 LTV = $795,000 4,500 new donors X $237 LTV = $1,066,500 If you factor in cultivation costs at an average of $7/year per donor (and the savings from not mailing the 500 donors NOT acquired) that’s a net increase of $289,000 over 5 years. If you continue this same acquisition strategy for 5 years, that’s a net increase of $1,445,000 for those new donors. So, all told, acquiring more valuable donors to start with makes a big difference down the...
Major Donors – In the Beginning

Major Donors – In the Beginning

Recently, an organization wanted to take a look at where their $1,000+ donors originated. After a quick channel analysis, we came up with this chart. For this nonprofit, 55% of their $1,000+ donors came in through their Acquisition Mailings. Another 23% gave their first gifts online. Four percent gave their first gifts to codes categorized as “Cultivation Mail” – mostly newsletters – and 9% of the $1,000+ donors gave their gifts to “Miscellaneous” codes like White Mail. So, Acquisition Mailings are extremely important – not just for the new donors they bring on for direct mail – but also as the entry point for future major donors. Over half of new major donor come in to the organization this way. Do you treat your newly acquired direct mail donors like they are your future major...
Make Statistics Understandable

Make Statistics Understandable

Kent (the resident numbers/strategy guy on Veep): [on the news coverage of a salmonella outbreak] “The number of people taken ill is orders of magnitude below statistical significance. Do people not understand basic nonparametric statistics?” While those numbers folks – and aren’t ALL marketers numbers folks? – among us may laugh at the quote above from the show Veep, I’m reminded constantly how true it is – People do NOT understand basic nonparametric statistics. And we shouldn’t expect them to. As we look back on 2016 and start 2017, I’m reminded constantly that our clients, our board members and our executive directors are not all numbers people. So, our job is not just to do the analysis but to make the numbers make sense. To find what’s hidden within the numbers and to use that to drive the strategy. Then we need to explain clearly to everyone The What and The Why. It’s interesting that Kent’s title in the White House is “Senior Strategist”. Perhaps political strategy focuses too much on polls and on numbers to drive every decision. But often the rest of us focus too little on those things. We marketers can help to fix that by making the numbers make sense. Then they can drive the...