How a book premium impacted acquisition offer revenue
The Fund for American Studies
Experiment Summary
Timeframe: 12/04/2019 - 01/31/2020
In an attempt to boost ROI from their acquisition efforts in expanding their digital program, The Fund for American Studies (TFAS) was looking for ways to increase their average gift, while ideally not impacting their donor conversion rate. They decided to test a gift premium tied to the $100 gift amount to see if they could improve results substantially and drive ROI to a higher level.
Research Question
Would a book (gift premium) work to increase either donor conversion rate or revenue (and subsequently ROI) for our acquisition offers?
Design
Results
| Treatment Name | Revenue per Visitor | Relative Difference | Confidence | Average Gift | |
|---|---|---|---|---|---|
| C: | No Book Premium | $1.14 | $42.20 | ||
| T1: | With Book Premium | $1.37 | 20.6% | 89.8% | $57.44 |
This experiment was validated using 3rd party testing tools. Based upon those calculations, a significant level of confidence was not met so these experiment results are not valid.
Key Learnings
With a 89.7% level of confidence, we were able to achieve a +20.6% increase in revenue by using the book as a gift premium (tied to the $100 gift level) on our acquisition offers.
Although this experiment did not fully validate (at the 95% LoC that we would typically require to declare a winner), because of the preference to increase ROI, TFAS decided to rollout the treatment and take the increased revenue (and ROI).
There are a few more observations made throughout this experiment, notably the following:
- We did also observe a -10% donor conversion rate (although that only achieved a 55% LoC, which means it was not validated).
- The increase in revenue, albeit with fewer donors for the treatment was driven by the dramatic increase in average gift (+36%).
- Specifically, the treatment experience produced nearly 25% of the overall gifts received at the $100+ gift level (to receive the premium), whereas the control experience only achieved 6.4% of the overall gifts received at that same gift level ($100+).
- Overall, the overall net incremental cost the organization was an additional $3 to acquire these book premium donors at the $100+ gift level.
For all of these reasons, TFAS decided to take the much higher volume of $100+ donors through their acquisition efforts for the additional $3 net cost to acquire them.
It should be noted that if you are considering using a book premium, that the placement of the book (after the core value proposition) as well as the relevancy of the book to the core value proposition that is chosen is highly recommended.
in this case, a high-profile alumnus wrote the book used in this experiment. We believe that these two factors are critical for acquiring long-term supporters for the organization (as the offer is not the book, but the core value proposition, and that the book sits behind that core offer as an incentive to “give more” to receive it for the donor).
Because of this, future testing with this book serving as the control will be considered, whereas new and more relevant books will be considered as treatments to future acquisition offers.