Digging below the surface for lifetime value
- 1. Laura Connors TJ Hillinger Amelia Koch Rick Malchow Allison Porter #bridgeconf
- 2. #bridgeconf
- 3. Campaign Analysis vs. ROI Analysis. Campaign Analysis is a vital daily tool that gives the pulse to the overall program at any given time. Good campaign statistics with costs are essential to running a strong fundraising program. ROI Analysis digs deeper into long term trends and health of the file. When are your donors returning the investment? How does your ROI compare with other organizations? #bridgeconf
- 4. Measuring ROI. ROI = (Income – (Total Acquisition Cost + Resolicitation Cost))/Total Acquisition Cost Total acquisition cost is imperative as it is the initial investment. With list ROI, acquisition cost can vary greatly from list to list. Resolicitation cost can be left out altogether for the purpose of comparing lists as one can usually assume it is the same for all lists. If necessary, use an estimated resolicitation cost based on average contacts per member, cost per contact and retention. #bridgeconf
- 5. Visualizing ROI $50 Breakeven $40 $31 $11 Net $30 $28 $24 $20 $17 $42 $35 $10 $24 $12 $0 Year 1 Year 2 Year 3 Year 4 Cumulative Income Subsequent to Initial Gift Cumulative Cost • ROI can also be shown visually as in the chart above. The dotted line represents cumulative cost which is $17 in year one--$10 cost to acquire + $7 resolicitation cost. Resolicitation costs decline over time due to attrition. Cumulative income eventually overtakes cumulative cost to mark breakeven. #bridgeconf
- 6. NPCA Case Study Presented by: Laura Connors, Deputy VP of Membership National Parks Conservation Association 777 6th Street, NW, Suite 700 Washington, DC 20001 lconnors@npca.org ##bridgeconf
- 7. Acquisition is an investment that compounds over time This chart shows that members from the earliest years are still giving and the consequent long-term impact of acquisition. Revenue is compounded year after year. A drop in quantity one year would impact revenue in future years. ##bridgeconf
- 8. Direct Mail is still the predominant giving channel • Direct mail remains the major income channel though it has declined slightly. FY09, FY10 and FY11 direct mail percentages are 91.8%, 91.2% and 89.4% respectively. • TM income percentages for FY09, FY10 and FY11 are 3.6%, 2.6% and 3.8% respectively. • Online giving still shows great potential for growth with a structured solicitation program in place. Web giving is at 5.3% of income in FY11 which is up from .6% in FY03. Email income is 1.4% of income in FY11. ##bridgeconf
- 9. Giving Metrics by Fiscal Year All Membership • Metrics have been extremely consistent since FY05. ##bridgeconf
- 10. $50 plus members make up 29% of file, yet give 62% of the revenue ##bridgeconf
- 11. Member value is tied to size of Initial Gift • The member’s first gift is the best predictor of future member value. • For NPCA, there is a considerable jump in value at the $25 level. ##bridgeconf
- 12. Retention is tied to First Gift Amount • Members joining at higher giving levels tend to have better retention. ##bridgeconf
- 13. Online joins worth twice Direct Mail joins • Each consecutive join year is consistent in value for both join channels except for the outperformance of the FY06 Online joins. ##bridgeconf
- 14. First Gift Distribution of $1,000+ Multi-Gift Members Note: $1,000+ Single Gift defined as one gift of $1,000 or more (not cumulative) • 61% of $1,000+ multiple gift members joined the file with a gift under $100, which is strong compared to other organizations. These numbers are based on 2,975 $1,000+ Multi Members found in the database. Average years for joins under $1,000 to update to that level is 6.8 years. ##bridgeconf
- 15. TM Contacts have value even if no gift is made contact code quantity %gave gifts/mbr $/mbr avg gift CREDIT CARD 160 89% 2.0 $76 $38 CHECK 665 70% 1.5 $49 $33 REFUSAL 2,387 48% 0.9 $35 $38 NO CONTACT 3,884 44% 0.8 $34 $42 • Members who pledged via credit card were twice as valuable as members who were not contacted or refused to give. • Refusals outperformed those members who were not contacted. ##bridgeconf
- 16. Activist/Members have stronger value than non-activist/members % renewed $/Mbr 0.7 $45 0.6 $40 $35 0.5 $30 0.4 $25 0.3 $20 $15 0.2 $10 0.1 $5 % renewed $/Mbr 0 $0 ##bridgeconf
- 17. FY11 Income per Member by Previous Giving Channels members: 265 1,047 313 913 135 1,233 5,062 26,999 88,119 Members included were active within 12 months at the start of FY11, had a highest previous contribution of less than $1,000 and had given 4 or more direct marketing gifts over their entire membership lifetime. FY10 Sustainers were excluded. ##bridgeconf
- 18. Key Follow Up Test $25 ask in acquisition. Test no premium version in acquisition. Include recent non-donor action takers in acquisition. Use this information to help identify mid-level upgrade prospects. Reinstatement testing through multi-channel efforts and multi- program efforts (reinstatement/renewal/appeal). High$ Mail/Phone and Mail/Email to engage multichannel.
- 19. CBF Case Study Presented by: Amelia Koch, Director of Membership Chesapeake Bay Foundation 6 Herndon Avenue Annapolis, MD 21403 AKoch@cbf.org ##bridgeconf
- 20. The file has been flat in members and income since 2008. Members by Join Year and Fiscal Year (0-12 mos) Member attrition is usually more pronounced than income attrition because retained members tend to give more. ##bridgeconf
- 21. The cumulative member value for canvass joins was far lower than the value of direct mail and online joins. Additionally, direct mail value has declined since 2005. CBF must re-shift the composition of new joins acquired from low-value (below $15) to high-value members. $140 $140 $120 Direct Mail Joins $120 Canvass Joins $100 $100 $80 $80 $60 $60 $40 $40 $20 $20 $0 $0 $140 Yr 1 Yr 2 Yr 3 Yr 4 Yr 5 Yr 1 Yr 2 Yr 3 Yr 4 Yr 5 $120 Online Joins • Direct Mail joins are giving an additional $96 $100 in subsequent income after five years. This $80 is excellent compared with other $60 organizations. With lower dollar joins, this $40 figure will decline. • Online joins are giving $93 over the same $20 $0 period. • However, Canvass joins only give an additional $19 over the same five years. Yr 1 Yr 2 Yr 3 Yr 4 Yr 5 FY05 FY06 FY07 FY08 FY09 FY10 Industry Ranges ##bridgeconf 5-yr donor value: $44-83 CBF: $96
- 22. Canvass members made up a significant portion of new joins and will need to be replaced. 35,000 $80 30,000 $70 $60 25,000 $50 20,000 $40 15,000 $30 10,000 $20 5,000 $10 0 $0 FY04 FY05 FY06 FY07 FY08 FY09 FY10 FY11 DM New Joins Canvass Joins Web Joins First DM Gift First Canvass Gift First Web Gift ##bridgeconf
- 23. In the pursuit of a larger membership file, CBF acquired a higher percentage of low dollar donors Members 100% 80% 60% 40% 20% 0% FY05 FY06 FY07 FY08 FY09 FY10 FY11 <$10 $10-14 $15-19 $20-24 $25-49 $50-99 $100+ • Lower dollar members are not producing much income. As members under $25 have grown to 28% of the file, they are only producing 5% of the income. Other organizations are experiencing a similar lack of return on donors under $25. Canvass joins made up 35% of under $25 in FY11 – down from 60% in FY07-FY09. ##bridgeconf
- 24. The file has shifted dramatically to below $15 joins. This change will have a significant impact on subsequent revenue. Using FY08 as a benchmark and comparing FY11 returns, the shifting donor composition weighted with donor value has a clear impact on long-term revenue and return on the initial acquisition investment: FY08 FY11 First Gift % of New Subs. YR5 %of New Subs. YR5 Significant shifts in donors above $25 Range Joins Rev. Joins Rev. and below $15 lead to a difference of <$10 8% $24,798 7% $24,630 nearly $300,000 in subsequent gross $10-14 11% $36,899 33% $126,291 revenue after five years. $15-19 5% $24,701 2% $10,717 Additionally, 2008 reflects more new $20-24 4% $23,497 30% $191,402 joins at a significantly lower $25-49 50% $531,625 16% $192,639 investment. $50-99 11% $331,419 6% $146,816 $972,940 $692,495 Initial Investment: -$223,000 -$730,000 The calculations above do not include initial gifts over $100. 2008 exceeded 2011 in this New Joins 13,556 14,933 regard. ##bridgeconf
- 25. Don’t forget to visit the Solutions Showcase! Many of the ideas discussed today are on display at the Solutions Showcase! #bridgeconf