There are sophisticated models, used mostly by bigger players in the commercial space ,to answer this question based on the ROI of different channels and medium. These marketing mix models determine, statistically, the sales impact of various marketing activities by using sales revenue (or volume) as the dependent variable and the various marketing efforts/programs as independent variables to determine their relative impact.

The larger, take-away observation is that determining where best to spend the next dollar is answerable with analytics. But we don’t need a sophisticated media mix model to make empirically driven decisions.

Consider this, according to the Customer Service Institute, it costs five times as much to attract a new customer as it does to keep an existing one satisfied.

A study by Marketing Metrics found the average company has a,

• 60-70% probability of selling again to existing customers
• A 20-40% probability of successfully selling to lapsed customers
• But only a 5-20% chance of selling to a prospect.

Despite these statistics and realities of the cost to acquire versus retain, the non- profit sector is overwhelmingly oriented towards acquisition. Why is this? Part of the answer is the incentives and metrics and focus are all geared towards a) new, b) campaign success (vs. LTV) and short-term targets, respectively.

There is also a dearth of innovation and unfortunately, the notion of shifting the next dollar to retain instead of acquire is squarely in the innovators box at the moment.

The other challenge, until now, is a lack of empirical rigor on ROI forecasts –beyond the generic – for retention. In our view, this is answered through relationship building and donor experience using a framework that is as rigorous and defensible as any short term campaign metric – e.g. response rate, avg. gift, cost to acquire.

For more on how to provide this empirical framework to identify donor relationship building by identifying the donor experiences that matter, mapping them against all touchpoints by lifestage, segment and channel and working through the operational change required to execute, check out this deck as an overview.