Tuesday, December 30, 2008

Smarter acquisition

I've ranted... errrr blogged quite a lot over the past few months about how things in Canada look and feel pretty much the same as most other places I’ve worked.

I blogged very recently about the fact that in any country that we work in we need to understand the difference between informed versus intuitive decision making.

I wanted to take this a step further and talk specifically about something many organization's are wondering at the moment....

To recruit, or not to recruit...?

I think now is as good a time as ever to be actively looking for new supporters, with a caveat that we need to be smarter about the channels we use to canvass support and who we reach out to.

Check out the blog I posted recently on the Recession watch site and the state of play with street recruitment in North America. In short - the number of people being recruited to a monthly gift on the street is up around 5%!

Anyway I digress.

When analyzing your acquisition efforts, cost per recruit is important. So too is volume (the sheer numbers you are bringing in). Of course there is retention. And let’s not forget average gift values.

But frankly, for me one of the most key measures is the value to date (VTD) of a donor over a period of time. In other words, how much a donor (or group of donors) is giving to you in total over a fixed period, taking into account their subsequent giving behavior. This becomes even more powerful if you can work out the net value, taking into account all costs.

This – VTD - is more important than ever. Research undertaken recently by the guys at bluefrog showed that a chunk (40%) of those surveyed said they were unlikely to start support a new charity in the current climate.

Does this mean stop all acquisition efforts now? No. But it does mean we have to be smarter about those groups we reach out to.

I suggest that as well as looking at VTD that you should consider some donor profile analysis looking at the behavioral insights of your best donors – whether that’s regular donors or onetime cash givers– overlaid with some basic geo-demographic profiling (where they live, age etc) that enables you to look at who really is giving to you and where did they come from. Again this will enable you to identify those channels that will allow you to target like for like donors based on who you already have on file that have historically performed well in terms of their overall VTD.

Sound like a bit of work? It is! But in terms of the long term impact this can have on your recruitment efforts now and post-recession, it will be worth it.

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