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Measuring Acquisition’s Long-Term Impact

by | Mar 12, 2018 | Avalon, Avalon Analytics, Avalon Insights, Blog

Once you get new donors in the door, your focus naturally turns to resoliciting and stewarding them. But there are other key metrics to look at when evaluating the effectiveness of your acquisition program. Are these newly acquired donors strengthening your overall program? What kind of return are they producing over time?

In our Avalon Inquire® master file analysis, we highlight our waterfall views, which identify subsequent revenue from acquisition campaigns, as well as major gifts coming in over time. Our return on investment (ROI) analysis shows the long-term impact of your acquisition program and gives you the tools you need to illustrate the substantial long-term revenue generated by the acquisition investment—as well as allowing you to pinpoint when your program meets the initial prospecting investment and begins to produce net revenue.

For many organizations, the break-even point ranges from two to five years. This wide range depends on a number of factors, and can also be dictated by an organization’s tolerance for investment and willingness to take the long view in terms of results. Regardless of when a program breaks even, subsequent revenue is significant for most programs.

Avalon’s ROI waterfall view also identifies major gifts that are generated by acquisition, both at the time of investment and over time, as upgrading efforts bear fruit. Direct marketing programs are typically a strong pipeline to major gifts—in fact, for Avalon clients, as much as 50% of their major donors first joined with a gift of less than $100.

The ROI waterfall view is a helpful tool that will give you a deeper understanding of the long-term benefits of acquisition and offer clear justification for future investment that can convince any organization’s leadership and board.

The organization in the example below will likely break even at the far end of the typical time range, which can still be very productive. The dotted line represents the point at which the initial investment is recouped. Clearly, the original investment has yielded significant major donor upgrades (dark green) in the years prior to the break-even point.

This organization has seen exceptionally strong results, recouping its initial investment within Year 1 (where the green crosses the dotted line at $0) and producing close to $750,000 in additional net revenue in the following year.

See what a waterfall view through our Avalon Inquire® master file can show you about the effectiveness of your acquisition program over time. Doing so will help with your investment scenarios and acquisition strategies.

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