Acquisition – what do you need to know?
Written by Jon Kelly
As I have previously noted, one of the big themes across the charity sector that I am hearing these days is the challenge of acquiring new donors. Whilst this has of course always been a challenge it does seem to be getting harder and harder to find new donors at scale and at cost. Pick up any benchmarking report, or attend any conference, and you will undoubtedly here about it.
One of the upsides of this is that charities are finally turning their attention more to retention and thinking more about how to engage and nurture the supporters they do have. I have always been a big advocate of focussing more on value from existing supporters so definitely welcome this. But we still need to breathe new life into our supporter files as we will always face some attrition from our base no matter how good our engagement programmes are.
I found the quote below from the recent Open / Sequoia Charity Benchmarks study very revealing in that it shows this is not a problem of budget.
“The Challenge is not the availability of the budget. The challenge is the availability of which viable routes in which to invest”
Up to now, the acquisition problem has generally been about budget (if I spend more I get more) but now it appears that even with bottomless pockets it is still not easy to recruit at the volumes needed to drive growth. Traditional channels (Face to Face, DRTV) are becoming more saturated (and more expensive) and whilst there are more and more opportunities out there (Digital, Social, Web) and Cost per Acquisition (CPA) can look very attractive, they are not (in most cases) delivering the required numbers.
So, what do you do about it?
Well unfortunately I don’t have any quick fixes or easy answers but there are three pieces of analysis I can highlight which will help you get your acquisition back on track.
Lifetime Value (LTV)
Firstly, if you don’t already, you really should be tracking the LTV of your donors. It is essential to review your acquisition strategies beyond the initial touch point and understand the future engagement of new donors you are recruiting. If you are not looking beyond this you may be missing out on recruiting long term loyal donors, or you may be wasting money on donors who provide little ongoing engagement.
Understanding the LTV of your donors will help you better assess how much to spend on recruiting them. Whilst channels like Face to Face and DRTV are becoming more expensive, longer term payback can still justify the cost. Conversely digital channels may appear attractive with lower CPAs but if these donors don’t go on to engage further it may not be worthwhile.
Audience Review
Secondly, now is a good time to understand more about who you donors are. An audience review will help you identify what your most profitable donors look like so you can then align your recruitment to these people and ensure you are using the right channels and messages to attract them. It can also reveal gaps in your mix and identify potential audiences that are not engaging with you.
We recommend using an existing market segmentation such as Mosaic or SONAR to match against your CRM data to understand how these groups currently engage with you. Propensity to give, or share of wallet metrics, can then identify the potential headroom in each audience and so help you decide your optimal marketing mix.
Forecasting
Finally, bringing it together it is worth investing in a simple forecasting tool or process which will help you evaluate the longer term impact of your activity and determine the optimal mix for long term sustainable recruitment at the right value and volume for your programme.
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