How often do nonprofits reach out to donors potential and actual online, yet have no real sense of how successful the outreach was? Did the time and money spent developing a program or launching a campaign prove to be worth the support? Dan Norris, founder of the online-analytics service Informly offers a tool to help you make that call. He also recently posted his somewhat-scientific results on using his ‘Cost Per Acquisition‘ (CPA) calculator to see what kinds of costs he was incurring to get people engaged with his for-profit business. Let’s see how the costs to acquire customers or donors can prove strikingly steep.
Dan recently ran a series of thirteen paid traffic tests using such services as Facebook Ads, Twitter Auto-Follow, LinkedIn Premium and the like. He also built is findings on Google Analytics and Google URL Builder, which helps you build unique URLs for any online outreach you might have. With the various URLs, you can trace which channels proved most cost effective and you can focus on those channels in the future. “Unless you have a bucket of money to throw at advertising then you probably want some idea of whether the advertising is bringing in customers for less than they are worth long term. If you want something that scales ideally you want to acquire customers for significantly less than they are worth to you long term.”
He has even offered his handy and elegant CPA Calendar for anyone who wishes to include it on their sites − and we thought you’d wish us to do just that:
First, you enter what you are paying for the hope of landing that customer − what is the cost per unit of the online service? Google’s AdWords starts at $5, for example. And for that $5, you’d like 10% of the people who click on your AdWords to get involved with your organization. And you’d like 5% of those people to give donations. The calculator then tells you that you are paying $1000 for each donation, which means you better have a pretty large ‘ask’ at the end of the process.
Dan’s calculator, as he notes himself, is geared toward businesses − not nonprofits − and it offers guidelines for long-term costs vis á vis the long-term value (LTV) of the customer. You could also buy a single Facebook ad that touches hearts and rake in thousands to support your organization’s good work.
Nevertheless, nonprofits and for-profit businesses have similar ambitions with their outreach/advertising: “Don’t ever do paid traffic if you don’t have estimates for your key metrics. $1.80 can very easily turn into $3,500 to acquire a customer without you realizing it.”
If it all seems a bit beyond your staff’s expertise, let’s note one of the outreach media that proved especially cost-effective. Straight-up traditional email blasts got him the highest number of visits and signups. And you are using email, right?
thedannorris says
March 28, 2013 at 19:40Thanks for the mention glad it helped!