How “cost reduction” value proposition affects recurring donor conversion
Hillsdale College
Founded in 1844, Hillsdale College is an independent liberal arts college with a student body of about 1,400. Hillsdale’s educational mission rests upon two principles: academic excellence and institutional independence. The College does not accept federal or state taxpayer subsidies for any of its operations.
Experiment Summary
Timeframe: 04/17/2019 - 04/23/2019
Hillsdale College sent a chase email as a follow up to a direct mail piece that asked donors to become a recurring donor as a part of their Liberty & Learning Society. The direct mail piece indicated that, as a member of this Society, donors would receive less direct mail and thus help Hillsdale reduce fundraising costs. They wanted to understand the impact of this “cost reduction” value proposition as opposed to a “benefits-focused” value proposition. They crafted two emails—one which included the “cost reduction and reduced direct mail” value proposition, and one which focused on the benefits of joining the LLS.
Research Question
How will a “cost reduction” value proposition affect recurring donor conversion?
Design
Results
| Treatment Name | Conv. Rate | Relative Difference | Confidence | |
|---|---|---|---|---|
| C: | Version A | 0.34% | ||
| T1: | Version B | 0.20% | -40.8% | 99.8% |
This experiment has a required sample size of 10,723 in order to be valid. Since the experiment had a total sample size of 51,432, and the level of confidence is above 95% the experiment results are valid.
Flux Metrics Affected
The Flux Metrics analyze the three primary metrics that affect revenue (traffic, conversion rate, and average gift). This experiment produced the following results:
0% increase in traffic
× 40.8% decrease in conversion rate
× 0% increase in average gift
Key Learnings
The treatment, which removed the “cost reduction” value proposition as well as the promise to send less direct mail, produced a 55% decrease in overall revenue due to the combination of a decrease in traffic and a decrease in conversion rate. This shows two important learnings—first, that there may be a desire among donors to help Hillsdale be more efficient and reduce costs, and second, that donors who receive direct mail may have a desire to receive less of it. This learning can be refined in future testing—especially the dynamic between the two.