How the Best Nonprofit Marketing Campaigns Optimize Lifetime Value

June 5, 2020

How are marketing strategies for nonprofit organizations unique? Just as you wouldn’t market two unique services in the same way to the same individuals, a successful nonprofit marketing strategy is all about finding and reaching the right individuals with relevant ads. While a single donation is always positive for your organization, donors that continue to give overtime offer the most long-term value for NGOs in the most cost-efficient way. 

In fact, it usually costs about 10x more to acquire new donors than it does to keep existing donors. And prospecting (i.e. finding new donors) can quickly become even more expensive without any kind of data to inform your prospecting strategy. This especially happens if you target too broad of an audience, which wastes budget on reaching individuals who aren’t interested in your specific cause. 

So how can you ensure that your nonprofit marketing strategy targets audiences that have a genuine interest in your cause, and drives continued and net new donations in the most cost-efficient way? The answer lies in measuring and optimizing donor lifetime value as it pertains to your nonprofit marketing strategy. 

Measuring and optimizing your donors’ lifetime value helps you see which donors contribute the most value to your brand over time. Higher value donors contribute to better overall ROI from both the individual and the advertising channels used to reach them.

Additionally, measuring and optimizing donor lifetime value can help inform audience targeting for future campaigns. You can use lifetime value insights to create lookalike audiences for targeted campaigns, and as a result, run more cost-efficient nonprofit marketing campaigns that reach the specific individuals that have the highest likelihood of converting (i.e. donating). 

So how do the best nonprofit marketing campaigns optimize lifetime value? In this blog, we’ll cover the basic definition of donor lifetime value, why it is vital for advertisers in nonprofit marketing, and how can you optimize it to drive more efficient campaigns as part of your nonprofit marketing strategy.

What is donor lifetime value and why is it helpful in a nonprofit marketing strategy? 

Donor lifetime value is a measurement of how much revenue, or total donation amount, a single donor will generate over the course of their relationship with your nonprofit. Lifetime value measures how much monetary value a customer/donor brings to your brand over time, and can inform marketing strategy by showing how valuable a donor is to your organization beyond their initial donation amount. This insight is important because you can use donor lifetime value to steer and benchmark fundraising results, as well as understand true marketing ROI. 

For example, users with a high lifetime value may not necessarily donate more upfront but instead will donate more over an extended time period. Therefore, paying higher CPAs for these donors initially can be justified by higher lifetime value since these identified donors will continue to donate over time. Simply put, leveraging these insights can help marketers decide which donor audiences and channels are actually worth the investment. 

An individual that continues to donate overtime drives reliable revenue and better ROAS through that specific channel. Strong ROI from both donors and their associated channels means marketers can better understand how to best reallocate budget, time, and resources, previously spent advertising to individuals with no proven likelihood to donate, to donor acquisition and retention.

It’s important to note that you’ll need more advanced data science techniques to calculate and predict individual donor past value and expected future lifetime value. Reach out to us here if you’d like to learn more about how we use predictive analytics for donor lifetime value

How do the best nonprofit marketing campaigns optimize donor lifetime value? 

Knowing the lifetime value of donors can also better inform your audience segmentation in new donor acquisition campaigns. Once you identify existing donors with the highest lifetime value, you can create lookalike audiences and target ads to those audiences based on what was successful for past high lifetime value donor acquisitions. 

To do this, you’ll first need to identify the shared characteristics of your current high-value donors. You can gather these insights via your advanced analytics platform (such as Google Analytics 360)

Next, you can gather, analyze, and act on users’ past donation data, demographics, and online behavior. You can then discover how these donors interact with your brand and find segments of these donors that you can feed through different advertising platforms.

With the help of machine learning algorithms, advertising platforms such as Facebook and Display and Video 360 can analyze a list of your high-value donors and highlight other audiences that are similar to them based on shared demographics and similar browsing behavior. Then, these algorithms can buy ad space and target these audiences based on the information you’ve provided about your current highest lifetime value donors.

As a result, your new campaigns are optimized to target individuals with a proven higher likelihood to donate, which cuts down on any media budget wasted by targeting individuals that don’t share any similar characteristics with your high-value donors. You can prospect smarter by casting a more accurate net with your audience targeting, which in turn ensures better ROI while cutting waste. 

Lookalike audiences help you prospect with the intelligence of your own data by casting informing specific audience segments to target. You can allocate and spend media budget more efficiently when you narrow in on audiences that have the highest likelihood to donate. More importantly, you can rely on your own data to guide media budget allocation across different channels and audiences.

From there, you can pinpoint users that are highly likely to donate to your specific cause. Donors that are passionate about your specific cause offer the best ROI, and you can also continue to run more cost-efficient campaigns that resonate with donors to boost donor retention rate.

Bottom Line

Measuring lifetime donor value not only helps identify your existing high-value donors but also helps inform future campaign targeting via lookalike audiences. Marketers are able to spend media budget efficiently by creating and serving ads to new audiences and individuals that look similar to current high-value donors in hopes of driving more conversions with the same media budget. 

Finally, measuring lifetime value allows you to understand the true ROI of individuals over time, which can help justify high CPAs to initially capture them as a donor. 

To learn more about how nonprofit marketing strategies can benefit from lifetime value optimization, get in touch with the DELVE team today to download our recent case study and discover how we helped UNICEF USA increase donation amount 78.56% by identifying high-value donors and optimizing for them with Google Cloud Platform and Display and Video 360.