Alexa Langford

Manager of Research & Analytics
Email Alexa

alexa.langford@grizzard.com

Alexa's primary responsibility is to help establish Grizzard as a recognized leader in the design and application of analytically-based research projects that achieve meaningful results for our clients. She executes research initiatives for Agency clients and for the Agency itself. She works closely with the VP of Research and Analytics, clients, internal sales and creative teams and...
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You’ve Acquired a New Donor . . . Now What?


1/30/13

Many nonprofit organizations acquire most of their new donors during the holiday period, loosely defined as October through December. Most nonprofits won’t see positive net revenue from their acquisition campaigns during this time period. The initial and subsequent gifts from these newly acquired donors will break even at a future point, usually between six and 24 months, depending on the client vertical and the acquisition strategy. The first step to breaking even (and starting to gain net revenue) is acquiring a second gift, thus cementing the donor’s relationship with your organization.

Therefore, second gift conversion rate is a key metric for determining the success of any acquisition campaign.

Second gift conversion rate is calculated as:

We recently completed a set of second gift conversion analyses for one of our large, faith-based client verticals. Historically, the timing of second gifts has been very consistent for this donor group. In addition to measuring the performance of past acquisition efforts, these analyses allow us to plan future donor conversion strategies taking acquisition channel and seasonality into consideration.

Here are a few key findings from this analysis:

  • Overall second-gift conversion rate is almost 62%.
  • 73% of direct mail-acquired donors who convert do so within the first 12 months after being acquired.
  • 88% of all donors acquired who convert do so within the first 24 months after being acquired.
  • Donors acquired during the holidays have a greater tendency to give their second gift during subsequent holiday periods than donors acquired at non-holiday periods.
  • While online-acquired donors have a lower conversion rate overall, a larger proportion of them convert within the first three months (40%) when compared with direct mail-acquired donors (29%).

Taking this analysis one step further, we also analyzed the historical donor value (sometimes known as lifetime value) of donors acquired five years ago by the length of time between their first and second gifts:

As seen in the graph above, there is a correlation between historical donor value and the length of time between first and second gifts.  In other words, for this client vertical, donors who give a gift sooner tend to have a higher historical donor value.

Organizations employ a variety of techniques in order to get that second gift quickly – new donor welcome packages, personalized thank you letters, voice broadcasting telephone calls – just to name a few. Video “appreciation footage” integrated into social networking sites, email links and website landing pages can act as a powerful communication vehicle and incentive to drive future engagement as well. What additional engagement strategies can you commit to testing in the new year, to get this critical second gift?

 

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2 Responses to “You’ve Acquired a New Donor . . . Now What?”

  1. Danielle Says:

    Good information. Can you go a bit further into the techniques for the second gift giving? Ive also seen numbers for donor retention to be very low, such as 41% of returning donors. Are you also looking into that data when analyzing this donor behavior?

  2. Alexa Langford Says:

    Hey Danielle, these are great questions. Many of our clients have seen a lot of success with First Gift Conversion programs for new donors. In these programs, donors typically receive a phone call and a series of targeted messages, welcoming them to the organization.

    Retention rate definitely goes hand in hand with second gift conversion rate for new donors. They are similar, yet distinct, metrics. Looking at them in tandem gives a rich picture of new donor behavior. In the case of this analysis, donor retention is built into our calculation of donor value. So, we are taking donor retention into consideration, even though we’re not directly reporting on it.

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