How the minimum premium gift impacts donor conversion
The Heritage Foundation
Founded in 1973, The Heritage Foundation is a research and educational institution—a think tank—whose mission is to formulate and promote conservative public policies based on the principles of free enterprise, limited government, individual freedom, traditional American values, and a strong national defense.
Experiment Summary
Timeframe: 06/10/2016 - 06/23/2016
On one of their donor acquisition campaign, The Heritage Foundation was testing the use of a premium to increase conversion and average gift. Previous experiments had proven that the premium increased the likelihood of a donor to convert but we wanted to see if we could also increase to overall revenue coming from the campaign. We decided to try testing the premium at a $125 minimum gift level. The control treatment had the minimum gift set at $100.
Research Question
Can we increase overall revenue by increasing the minimum gift required for a donation premium?
Design
Results
| Treatment Name | Conv. Rate | Relative Difference | Confidence | Average Gift | |
|---|---|---|---|---|---|
| C: | $100 Premium | 1.3% | $59.83 | ||
| T1: | $125 Premium | 0.54% | -58.4% | 99.2% | $87.33 |
This experiment has a required sample size of 1,215 in order to be valid. Since the experiment had a total sample size of 4,450, 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
× 58.4% decrease in conversion rate
× 46.0% increase in average gift
39.3% decrease in revenue
Key Learnings
The $125 minimum gift was able to lift the average gift by 46% but it decreased the overall conversion by 58%. This resulted in a 39% decrease to overall revenue for the treatment. In this situation, the $100 minimum gift amount was the clear winner between the two.
However, even if this test had managed a slight increase to revenue but still decreased conversion rate significantly, the control would still have been the winner. The purpose of this campaign was new donor acquisition. It would take a significant increase in revenue to justify any loss in the number of donors acquired.