Monday, March 23, 2009

Acquisition in a downturn - case study

With Australia experiencing the economic pain of the rest of the world, with our first contraction in 8 years during the last quarter of 2008, many charity staff are especially concerned about acquisition. We know it will become harder (wasn’t it before the recession?) and we know it will become more expensive, so should we still do it?

I wanted to share the story of The Lost Dogs’ Home, which has grown their regular giving programme through cold acquisition during the last quarter of 2008; on budget and beating targets. For me it illustrates that with effective planning to minimise risk, acquisition is still possible in tough economic times.

I would recommend the following steps to help with your acquisition.

1) data analysis
2) strategic plan
3) implementation and monitoring
4) results and evaluation.

Data analysis of past campaigns

Analysis of past acquisition activity allowed us to see subsequent donor behaviour - attrition, upgrade, conversion, additional cash gifts, bequest conversion – by recruitment source (face-to-face/direct dialogue, direct mail, phone, online etc.). Armed with this information we were able to see which recruitment channel was delivering value beyond the original results, and determine where to invest.

Developing the strategy

The data analysis showed the differing behaviour of donors recruited through each channel. For example, DM recruits went on to make cash gifts through cash appeals where F2F didn’t, and online recruits upgraded at a higher rather rate than DM.

Using the information about additional value from regular givers, we opted to focus acquisition on straight to regular giving. We knew that at a campaign results level we would get a lower year 1 ROI with regular givers vs cash, however, the additional value identified in the analysis (especially cash gifts from regular givers in year 1), would lift the year 1 ROI for regular givers closer to that for cash. Also, additional gifts aside, we also knew regular givers offer a higher year 5 ROI than cash.

To keep costs low and maximise learning from prior campaigns, we focused on tactics, creative and media that we knew worked for each channel.

Implementation and monitoring

We opted for a 3 month trial phase using F2F, mail, phone and online to see if the economy was affecting particular channels. With the learning from this we would then roll-out across the best performing channels.

With campaigns running at different times, it was essential that we had real-time monitoring to keep spend and acquisition rates on target.

Results and evaluation

At the end of three months of activity we had recruited 1600 monthly giving donors, increasing the active supporter base by 19%. Other key metrics were also positive with the ROI and average gift meeting target.

We also reached a milestone for the Home recruiting the 10,000th active Friend of PAWs regular giving donor, having only 97 regular givers just four years ago.

Building on this success, we are now in the roll-out phase to the end of June and hope to have recruited another 2000 Friend of PAWs donors by the end of the year. Watch this space.

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