Determining the “price elasticity” of a recurring gift ask amount
Focus on the Family
Focus on the Family is a global Christian ministry dedicated to helping families thrive. We provide help and resources for couples to build healthy marriages that reflect God's design, and for parents to raise their children according to morals and values grounded in biblical principles.
Experiment Summary
Timeframe: 02/15/2019 - 02/26/2019
Focus on the Family had seen significant success acquiring new recurring donors through the popup recurring gift ask. The popup was a window that would appear, prior to a gift being processed, that asked the donor to convert their one-time gift into a recurring gift. We had done several iterations of experiments on the value proposition used on the prompt but seen limited success in increasing the conversion rate. With this in mind, we decided to instead see if we could increase the average recurring gift amount by increasing the minimum donation ask. We were trying to determine the price elasticity of the minimum gift ask.
In this situation, we would potentially lower the donor conversion rate but lift overall revenue by significantly increasing average gift.
Research Question
Will changing the minimum donation amount of the recurring gift prompt from $15 to $25 significantly increase overall revenue?
Design
Results
| Treatment Name | Conv. Rate | Relative Difference | Confidence | Average Gift | |
|---|---|---|---|---|---|
| C: | $15 Minimum | 2.3% | $0.00 | ||
| T1: | $25 Minimum | 1.2% | -49.3% | 95.8% | $0.00 |
This experiment has a required sample size of 1,048 in order to be valid. Since the experiment had a total sample size of 2,189, 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
× 49.3% decrease in conversion rate
× 0% increase in average gift
Key Learnings
We reduced the overall recurring donor acquisition coming from the recurring gift popup by 49% when we increased the minimum gift ask to $25. It was expected that we would see some level of decrease so we dug deeper into the data to determine the overall impact on revenue. When we did, even though we saw a 66% increase to average gift, we still see an overall 26% decrease in revenue from the increased minimum gift amount.
As a note, for the purpose of this analysis, we only included donors in the sample size and conversion metrics if they were giving a small enough gift to be impacted by the reduced gift amount ($40 or less).