Website Analytics For Nonprofits
This article is about the key metrics you need to measure if you plan to generate revenue for your nonprofit from online marketing activity like Google Ads, Facebook Ads, or any other strategy that involves bringing traffic to your website then converting users into donors.
How should you spend and how do you measure success?
The 5 Most Important Marketing Metrics For Your Nonprofit
After setting your marketing strategy into motion you need to see if it’s working and that means setting up your analytics.
There’s a long list of analytics we could talk about but I want to emphasize the 5 most analytics that you need to understand in detail if you’re serious about growing your nonprofit. These metrics are:
- Step 1: Website visitors
- Step 2: Conversion to leads
- Step 3: Conversion to paying donors
- Step 4: donor acquisition cost
- Step 5: donor lifetime value
Before we talk about each of them, let’s make sure we understand the sequence of events involved with getting a paying donor. You should create an outline of the sequence of events for each service, target market, and promotional channel. Think of these as individual sales funnels.
For example, if you want to offer estate planning services to people in your local area by using Google Ads to bring people to your site (visitors) then ask them to signup to receive a free report (leads) like “5 Critical Thing To Consider When Planning Your Estate” the follow up with an email to offer your services, your funnel could be: Google ads > landing page > email opt-in > email sequence for 5 weeks > schedule a call > paying donor
If you wanted to offer CFO services by using SEO your funnel could be: SEO > landing page > email opt-in > email sequence for 5 weeks > schedule a call > paying donor
Visitors, Leads, Paying Donors
- In this case, you want to know:
- How many people visited the landing page?
- How many signed up for a free report?
- How many scheduled a call?
- How many became paying donors?
A typical result would be: 100 visitors, 5 scheduled calls, 1 paying donor.
Donor Acquisition Cost (DAC)
Now that you have this information you can calculate your average Donor Acquisition Cost (DAC). In this example, if the 100 visitors were from Google Ads and you paid $5 per click then you spent $500 to get one donor. This is your CAC.
Donor Lifetime Value (DLV)
Now, you need to decide whether spending $50 per paying donor is an acceptable number. The first thing you need to do to answer this question is to calculate the Donor Lifetime Value (DLV).
For example, if the average donation amount is $10 then the DLV is only $10 and you made a loss of $40. If the average donation is $10 per month and the average recurring donation continues for 10 months then you made $100 of revenue less $50 in ad spend so you are left with a $50 profit.
In some cases, you will be profitable after selling the initial service. In other cases, you will only be profitable after providing the additional services. The critical conclusions are:
– Comparing your Donor Acquisition Cost with your Donor Lifetime Value allows you to understand how profitable your marketing activity is over the short, medium, and long term.
– You can use this information to understand whether to scale up, adjust or terminate a marketing strategy.
– You need to be “very proactive” about optimizing each step and ensuring that you are accurately measuring each step. You need to maximize the traffic flowing into the top of the funnel and you need to optimize the conversion rates at each step and you need to maximize your ‘backend’ (additional) services.
As you can see, these 5 simple metrics can tell you almost everything you need to know about how effective your overall marketing strategy really is.
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