How lower cost premiums impact donor conversion
Museum of the Bible
Experiment Summary
Timeframe: 12/21/2018 - 01/01/2019
The Museum of the Bible was running the early part of their year end campaign. Since the urgency and motivation is relatively low in the middle of December, they decided to utilize a premium as part of the appeal. The original idea was to offer a DVD the documented the building of the museum for a gift of $150 or more. However, there was also concern that such a high price for the premium may dissuade many potential donors from making a gift. We decided to run an experiment where we offered the same DVD but for a gift of $50 or more. We would then measure both donor conversion and overall net revenue to the organization.
Research Question
Will a premium offered at $50 instead of $150 increase the number of donors and amount of revenue to the organization?
Design
Results
| Treatment Name | Conv. Rate | Relative Difference | Confidence | |
|---|---|---|---|---|
| C: | $150 Premium | 0.05% | ||
| T1: | $50 Premium | 0.10% | 102.6% | 99.3% |
This experiment has a required sample size of 22,735 in order to be valid. Since the experiment had a total sample size of 84,721, 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
× 102.6% increase in conversion rate
× 0% increase in average gift
Key Learnings
The $50 premium resulted in a 102% increase to donors acquired and a 183% increase to revenue for the organization. Even with the lower donation ask, we actually saw an increase in average gift too. The $50 ask increased the donors giving but did not decrease the gift amount of the donors that would have given anyway.
For future experiments, we may want to test offering a premium such as this for $75. Finding the optimal “price” for a premium such as this would allow us to maximize our potential revenue.
Note: The total revenue for the control was $3,494 vs. $9,885 for the treatment. When calculating net revenue, the DVDs were assumed to have a hard cost of $2. Additionally, since the difference between the two emails was in the content itself, the sample size is based upon the number of subscribers that opened the email.