How Do You Measure Success in Acquisition?

May 08, 2013 - by Bryan Evangelista

Your fundraising acquisition campaign is out the door. Gifts are coming in and you are excited and ready to analyze the results of the campaign. But with so many statistical measures to consider … how do you truly measure success?

Two of the most common metrics people look at are response rate and average gift, but limitations exist when looking at these for acquisition, most notably because neither factors in costs:

Is response rate (gifts/quantity x 100) your key indicator? It's definitely important — the goal of an acquisition campaign is typically to acquire as many new donors as possible, and response rate is defined as the percentage of the mailing quantity that responded. But what about the value of those donors? What about cost?

Is average gift (gross income/gifts) your key indicator? That's important too, because another goal of acquisition can be to acquire donors with a high initial value, and average gift is defined as the average size of the contribution. But what about the number of new donors acquired? What about cost?

So — what about costs? You can spend a lot on attention-getting carrier envelopes and fancy premiums that help improve performance, but if it costs too much to acquire the donor, is it worth it and ultimately successful?

This is why investment per donor (which we measure as net income/gifts) is the most important metric of all when evaluating success in an acquisition campaign. Investment per donor provides the most complete measure of success because of the variables it takes into account. Rather than focusing solely on response or average gift, it considers them both together along with costs, and measures the actual investment the organization is making in acquiring each new donor.

This is not to say that response rate and average gift shouldn't be considered as valuable metrics. They are strong indicators of package success, but it is important to remember that they only tell part of the story. If your organizational goals aren't specific to JUST increasing the number of new donors, or JUST improving average gifts, investment per donor should be looked at to measure the overall success of an acquisition campaign.

Note: Investment per donor is typically a negative — since acquisition traditionally does not produce net revenue — so the lower the number, the better the performance! Most organizations average between a $30-$60 investment per donor, but these values do vary depending on the list market and mission. It is also important to note that investment per donor should only be used as a key performance metric for acquisition campaigns. Appeal campaigns have a different key performance metric — net per thousand — since these campaigns net profit.

If you have any questions about this article, or have a difference of opinion you'd like to share, please email Bryan Evangelista, Account Supervisor, at bevangelista@lautmandc.com. He is a self-professed data nerd who loves to talk about stats!

Enews Articles

August 2017

Case Study: Using SMS to Get Donations at Year-End

May 2017

#17NTC 17 Tips for YOU!

February 2017

What (and Who) We Should Be Asking About State Laws

January 2017

2016 Digital Year-End: An Inbox Audit

September 2016

Production Blog

December 2015

An Ode to Sharing

October 2015

The Great Pumpkin and the Myth of the Unsolicited Donation

July 2015

Paradox of Choice

July 2015

#Bridge15 Take-aways

June 2015

Lady Gaga and the Importance of Relationships

May 2015

Back to the (Digital) Drawing Board

February 2015

Understanding Donors — The Old Fashioned Way

January 2015

My Four Fundraising Resolutions for 2015

November 2014

The Importance of Being Earnest

October 2014

AMMC Conference Teaches This Old Dog New Tricks

October 2014

Too Hot to Handle … How to Turn Warm Prospects into Donors

September 2014

Keeping Cross-channel Communications Consistent

August 2014

5 Tips for Better Fundraising Copy

June 2014

Keep Boredom out of the Boardroom

May 2014

Functional Creativity

April 2014

How to Raise Money from Baby Boomers

February 2014

Five Take Aways from the February DMA-NF Conference

January 2014

What Kind of Friend are You? Building Relationships That Last

December 2013

#GivingTuesday – Worth the Fuss?

November 2013

Donor Cultivation on a Budget

October 2013

1,500,050 Charities Making a Difference — A Statistic Donors Need To See

October 2013

The USPS Proposed Rate Hike — What Does It All Mean?

June 2013

Investing in Acquisition: How to Get Your Board on Board

May 2013

Redefining Charity Efficiency