What’s an email worth?
Over here at Care2 we
get this question a lot. And we should. Any nonprofit seeking to recruit
online supporters should rightly be concerned with the ultimate value derived
from such supporters. The following is
an attempt to address this question, without any presumption that it will
provide a definitive answer. Check out
the simple calculator below, and if you want more detailed explanation, read
the details at the bottom of this blog post, or give us a call. We value the
expertise of our colleagues and welcome any feedback or comments.
To use this calculator
simply enter the data from your organization.In selecting the number of addresses you can use a subset, such as all
email gathered from a particular source or in a given year, or your entire file. If you are carrying a lot of inactive
addresses the average value will of course be lower. The second calculator
shows benchmark values from a recent study so that you can compare the
performance of your names with those of other organizations working in the
the average one year value of an email
How do you compare?
Here's a summary of
the lifetime value per email from different issue areas, based on a recent
benchmark study and assuming the 50% of the emails on each list go inactive
Benchmark average value
of an email address
*Source: Convio; The
Online Marketing (eCRM) Nonprofit Benchmark Index™ Study January 2007.
The first challenge in
answering this question is that different organizations use and value online
supporters differently. Many
nonprofits that have large, active email lists do little or no fundraising
from their lists, others use these lists almost exclusively as a source of
donations. The same goes for advocacy.
In fact, some nonprofits have two completely separate email lists, one for
advocacy, and one for fundraising.
A second challenge is
that organizations vary greatly in how they measure this value. Some base the value strictly on the
donations raised compared to the cost of acquiring an online supporter. Others factor in the value of advocacy,
community, mission fulfillment, and branding.
In some respects
answering the donor value question by measuring donations is the easiest, or
at least most easily quantified, approach. There are many ways of measuring
donor value, and here we’ve created a fairly basic calculator that looks at
the value of an email address based on average donations over time. From a
business perspective any source of email that costs less than the average
lifetime value is a good source, from there it’s only a matter of choosing
the best source.
The amount of money
you are willing to spend to acquire an email address should be determined by
the value that your organization will receive from having that email address
(and permission from its owner to send messages to him/her, of course). If
the main value you are concerned with is donations, then you will want to
make sure that the donated dollars you receive from the average email address
that you acquired is higher than the average price you paid for these
addresses. But don't fall into the trap of counting only the first donation.
Instead consider the lifetime value of the email addresses you acquire,
because many if not most of your donors are going to keep on donating
Q: How is drop-off measured?
A: This is the number
of emails in your file that go inactive each year, there are diferent ways of
determining whether an email is inactive, the most important thing is to be
internally consistent in how you measure this. One common measure is if the
email hard bounces, unsubscribes, or does not open in 12 months.
Q: Does this include offline giving too?
If your organizations uses direct mail, telemarketing, and other methods for
asking your online supporters for money this should be included.
Organizations that use multiple channels to appeal for support report a
higher value and larger gifts from their online supporters.
Q: Does this account for inflation?
To accurately assess the value of any activity businesses typically calculate
the net present value of the asset. This takes into account all revenue
generated by an activity into th future, discounted for inflation. We did not
include a discount, or inflation, rate in this calcualtor, mostly for