Learn more about analytics and research best practices, as well as real world examples and solutions for nonprofits.

RECENT POSTS

Jul 6, 2015

LTV SchmeLTV

guy and bar graphIf there is one metric our industry is fixated upon, it’s LTV (long-term value). And, like so many other things, though it started out as such a good idea, it is in serious need of a tune-up.

Now don’t get me started about the 7-ways to Wednesday that LTV is calculated. You’d think we would have come up with standard measurement for LTV.

My problem is our industry has blindly assessed the same LTV to a donor (usual by channel acquired) while disregarding the most critical driver to LTV . . . LIFE EXPECTANCY.

We did a study for one of our clients on their new donors acquired last fall. The average age for a direct mail acquired donor was 75-years old. According to life expectancy tables, a 75-year old’s life expectancy is 11 years. Compare that to a life expectancy of 30-years for a 50-year old.

Without taking life expectancy into consideration and assuming all donors’ LTVs are equal, we avoid going after younger donors because they are “too expensive” to acquire than are older donors. Yet, when you calculate life expectancy into the equation, the numbers show you can actually afford to spend more acquiring younger donors because the LTV is actually much higher.

If you aren’t using life expectancy when you are calculating your LTVs, you might be making big mistakes in your acquisition decisions.

One More Gift from Sustainers

I think we’d all agree that sustainers are great. Having a group of donors that have committed to giving every month is like money in the bank. And, not surprisingly, a lot of organizations are careful to limit additional appeals to this group so not to alienate any...

read more

Early Returns

We are knee-deep in analyzing last fall’s results. While there is of course some variation in results by organization, the general narrative is that last fall wasn’t great . . . but it wasn’t awful either. It was just OK. What we are seeing is that overall revenue was...

read more

How Fundraising Will Evolve

In honor of International Data Week, I’m sharing how the future of fundraising will evolve. Many people are concerned about fundraising (I’m not btw). For nearly two decades, the “experts” have been predicting the death of direct mail fundraising. Eventually, the...

read more

ARCHIVES

© 2020 Analytical Ones