Activating Your Lifetime Value Analysis: Flow Dollars Back Into Your Program
The Direct Mail channel has become more crucial to the integrated omnichannel marketing mix than ever before. And for nonprofit marketers, the implementation of smarter and more dynamic analytics tools has evolved our understanding of how to identify and cultivate the right relationships through direct mail, while removing many of the older (and costly) trial and error techniques. Over time, we’ve learned that investing in this knowledge is one of the keys to running a more impactful, cost-effective program.
Data analyses like calculating Lifetime Value, in particular, help marketers to narrow in on what their “best” donor may look like – more specifically, understanding someone’s monetary value, and later, what kinds of sources are bringing that person in, and what types of engagement tactics ultimately compel that person to give over time. It’s a valuable mechanism for more strategically approaching your house file and understanding what media sources may be higher up in priority to capture those high-value names. But it’s when the data insights gained from an LTV analysis become actionable that organizations can realize greater return on their marketing spend.
So, what are some of the tactics for making LTV Analysis actionable? Take a look at these steps to spend smarter, retain more long-term value donors, and bring dollars back into your program:
Diversify your list sources:
Once you’ve landed on the different personas or donor segments that reflect higher LTV, the key is to access the right sources that allow you to connect with them. Do the current lists you operate with show large clusters of these high-LTV prospects, or are they missing the mark? Consider exploring a fresh media mix in order to tap into new, untouched audiences. If you’re typically leveraging a lot of commercial media, broaden your horizons with new databases or types of lists.
Flex your negotiating skills:
The opportunity to weed out costs while optimizing where performance is strong is crucial to the overall impact a nonprofit can make. Once you’ve pinpointed what the higher LTV prospect looks like, chances are some of the names or lists you’re using might become less relevant. This is where list cost negotiation comes into play. As we mentioned in a previous post, the key is to negotiate a net arrangement that covers the names being lost through LTV analysis and optimization; that way, organizations can focus resources on the names most valuable to their program.
Reinvest in Additional Prospecting
Once higher-gift, higher-value donors are being engaged and list costs are improved, there may be a good opportunity to invest revenue back into the acquisition program and other marketing efforts. Consider broadening your acquisition strategy to reach not only new audiences, but also re-engage dormant donors. Scan your house file for donors who may have fallen off the “active” donor list, or those who may have been suppressed from the current acquisition campaigns. When activated through a new campaign or newly personalized content, there exists a great opportunity to re-connect.
LTV Analysis is a powerful method for honing in on more valuable donors from a short-term perspective, but it can also provide the tools for long-term program growth. Taking the above steps allows an organization to both increase their prospect volumes and improve the long term value of donors acquired – all adding back into the larger prospecting and acquisition efforts.