Thursday, May 7, 2009

Turn media prices on their heads

Just a thought.

Charity A runs a new program to recruit new donors.
Spend is $30k on development fees and $200k on media (print, online, newspaper ads - whatever).

They recruit 1,000 new donors giving an average of $100 ie $100,000 income.

So they raise a net of -$130,000. In the results report a line will appear that the net cost of the donors was $130 each ie cost per acquisition (CPA) = $130. The projected rollout cost, which has no fees would be $100 per donor.

Now this particular charity knows that with its donor development program it needs to actually recruit donors at $50 per donor to make the exercise worthwhile. So, in this case the job is deemed to have missed target (it failed) and it is back to the drawing board.

But let's not start again.

There is a global financial crisis - media sellers are meant to be struggling. Surely a win-win here is to go back to the media seller and say "We will buy your media again - and we will buy four times as much, but at half the price." They get twice the income, and Charity A's cost per acquisition is now acceptable.

I know it seems naive, but if we all take this approach we can take real advantage of what should be a buyers market. There is no need to screw them - just get the price that works for you.

Anyone succeed at this please let me know. And if you try and fail, let me know too.


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