Fish, Frogs and Files -or- How to Find the Value of an Email
Posted by:
Molly Brooksbank on
April 10, 2008 at
10:35AM EST
Some people like tuna from a can. Me, I like sushi. Like your email housefile, it’s all about how fresh it is and how you slice it. And fish that are carefully chosen and sliced with skill are more valuable than the stuff in a can for a reason.
Eric Rardin at the Care2 frogloop blog has posted an excellent calculator to help nonprofits answer a key question: What’s the value of an email? It’s a question Care2 has been taking head on since it’s important to how they connect activists and donors to causes.
As he mentions, Care2 gets this question a lot. As a consultant working with nonprofits, I ask it a lot. How should organizations be building a housefile? How do you prioritize? What tangible and intangible benefits can an organization offer to build a list directly? Are appends worth it? Should you advertise online? And for all of these questions – at what cost? If you’re trying to build your file, you need to be able to assess expenditures for acquisition and you need to be able to determine which source is most valuable.
In other words, you have to know where to get the best fish.
Tom Belford at the Agitator observed that if you’ve been running online campaigns for a while, you should already have your own way of measuring the value of email addresses and should be taking into account the cost of acquiring those addresses, but nonprofits are definitely all over the map on this one. Depending on where you are, this calculator may be a very good starting point for you.
The calculator gives results based on a number of campaigns per year. Seems simple, but you have to know what you mean by a campaign—it’s usually not just email responses. Email alone typically drives about 15% of donations and the rest comes from a variety of other sources. A single campaign could include donations driven from direct mail, search, viral referrals, or from activists, volunteers and information seekers who just happen to respond to an appeal while visiting your site.
Since the calculator uses a number of responses rather than a response rate, you can pretty much define your own terms, but if you want to compare your results against the benchmarks provided from our 2008 Nonprofit Benchmark Index Study, you’ll want to consider all online gifts in a one-year period, divided by the number of individual emails. In other words, the easiest thing to do is use your aggregate numbers as a single campaign.
If you’re already calculating the value of email, but you’re not looking at the multi-year implications, this is a great reminder to add it in. How fresh are your addresses? You can keep email addresses fresher through good communications, but there will always be some that become unusable.
If you’ve done that, try taking some different kinds of slices. Can you find the value of various relationships online (e.g. advocates or volunteers)? Are there constituents who are more valuable because of higher engagement (the people who open your email and read it)? Segmenting your file to speak to constituents in context can improve response rates, but you have to know your baseline, and if you want to learn to make beautiful sushi, you’re going to have to spend a lot of time studying fish.
P.S. I’m using tuna as a metaphor so I have to mention this tuna-related game developed by Conserve Our Ocean Legacy. It also conveniently happens to demonstrate an innovative way to educate, engage and list build at the same time. (You won’t see my name in the high scorers list. I got netted at 70,193).
(2) Comments
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Posted by: vbhagat on April 10, 2008 11:16PM EST
There are two primary caveats with value of an email address analysis like this:
1) It's online only $ - it does not factor the integrated marketing effect i.e. the lift that email/ online marketing has on offline direct response and major gifts
2) It's a blended rate and cannot be applied to all email sources. Some emails originate from people going online to donate. Those emails are likely to drive more value than a prospect email acquired from a viral campaign or third party site.
Vinay Bhagat
Founder & CSO
Convio
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Right - with integrated marketing you can convert up to 4 times more online incepted names to donors.
And just to clarify, I think your point on #2 is that not all emails are created equal. The *overall* value of an email address skews high because so many addresses are actually acquired through a donation process. You have to be careful not to compare apples to oranges when evaluating the potential of a list vs. your general housefile.
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