Over a year ago, M+R released the results of a test in which we dropped the price of membership with a major nonprofit from $35 to $25 for a limited time for subscribers who had never become members. We teamed up with two University of Maryland economists to roll out the offer and analyze the results.
Reducing the membership to $25 and – here’s the key! – telling supporters it was a special discount raised just a hair more, but it got more people donating. This tactic reduced the average gifts, but increased response rates, securing first-time gifts from more people. Check out the full results from the original study.
But there was still a big question hanging over our heads: Would the donors who gave to the discounted $25 membership perform as well in the long-term, or were they just fair weather fans who would always need a special offer to get them to open their wallets?
We took a deep dive into this nonprofit’s data to find out, looking at 18 months worth of online and offline giving for the donors to the $35 and $25 offers from the original test.
What did we find? Supporters who donated in response to the discounted membership offer performed identically to those who gave to the standard membership offer. They gave as often and as much:
- In both the discount and non-discount groups, just over 40 percent of the original donors gave again and those who donated made the same number of gifts.
- On average, donors in both groups gave slightly more than $80 each.
And since the discount offer generated more donors, it raised 11 percent more in the long term. Apparently you can have your cake and eat it too!
But before you roll out your discount strategy, be sure to review our original study. How we framed the offer made a big difference in the results we got.
Here are a few top-line takeaways from our original study:
- If you’re offering a discount, say it’s a discount.
- When it comes to past donor-activists, run a test before you decide to offer them a discounted membership.
- Fundraise from your activist-only list.
- Experiment! Just because you’ve asked for $20 from new donors for the past decade doesn’t mean it’s still the best amount to ask for today.
But remember, it is possible to have too much of a good thing. Be strategic in when and how often you use this tactic.
One important point: Some additional testing we’ve done more recently has indicated that offering a discount can work with deeply lapsed donors, but could back fire with more recent donors. So please bear in mind that this study was conducted exclusively with subscribers who had never become members – and we wouldn’t recommend applying these findings to other audiences without additional testing!
Which leads us to an important best practice in everything we do: Any time you’re rolling out a new strategy, test it with your own file first!
If you have questions or would like to discuss your organization’s online fundraising strategy, please don’t hesitate to get in touch with us.
Vice President, M+R Strategic Services
Special thanks to Andrew Stocking, Ph.D., the economist from the University of Maryland who helped devise this test and conducted the data analysis.
ABOUT M+R STRATEGIC SERVICES
M+R is dedicated to helping our clients advance their missions in order to bring about positive change. We do this by helping organizations and campaigns we believe in develop smart and effective strategies, hone their messages, mobilize their members, build grassroots support, raise money, and communicate effectively with the media, the public and decision-makers, both online and offline. www.mrss.com