Mar/Apr 2008

Keeping up with the Joneses: Are You Leading or Falling Behind?

by Quinn Donovan, Client Success Services Analytics Manager, Convio

"Keeping up with the Joneses" is a popular catchphrase. It refers to the desire to be seen as being as good as one's neighbor or contemporary by using comparative measurements, such as the car they drive or the brand of clothes they wear.

Anyone who has gotten caught up in this trap can attest that trouble invariably arises if one party has more complete information than the other. For instance, after trying unsuccessfully to match the Joneses lifestyle, you discover that the reason why the Joneses could afford that new car and fancy vacation was a recent inheritance they didn't mention to anyone. Or that they simply projected the perception of success while secretly drowning in a sea of debt.

Nonprofits struggle with this same concept of asymmetric information. While you know exactly how your organization is performing across key metrics such as fundraising, email file health, and mobilizing advocates, you have little or no empirical data outside your organization to compare yourselves against.

"We're doing better than last year, but are we leading or falling behind our peers? And who are my peers?" are common questions I hear from many nonprofit leaders. Even when you get a glimpse into how another organization is performing, you are often wondering whether the other organization is a good comparable to measure against your organization.

To address this problem, Convio has compiled more than 400 nonprofit organizations' online marketing (eCRM) results to allow organizations to compare themselves against relevant benchmarks.

The Convio Online Marketing Nonprofit Benchmark Index™ Study published in March 2008 features benchmarks based on an organization's mission (vertical) as well as email sophistication (file size). Because a public broadcasting station's mission and how it operates is very different from a university or disaster relief organization, Convio created separate benchmarks for each of these verticals to allow nonprofits to compare their individual results against a group of peers that is most like their own.

Organizations are classified into 11 verticals: Animal Welfare; Association and Membership; Disaster and International Relief; Disease and Health Services, Environmental and Wildlife; Faith Based; Higher Education; Human and Social Services; Public Affairs; Public Broadcasting Stations; and Visitation, Performing Arts, and Libraries.

Since it is presumed that those organizations with large email files can communicate with more constituents and should drive stronger results online than those nonprofits with smaller email files, Convio identifies an organization's email file size as a separate benchmark for this Study.

Key findings:

• Email files continue to grow, outpacing online revenue growth. Email files grew 32%, suggesting that organizations are succeeding in growing prospect files online.

• Nonprofits' Web site traffic continues to grow, with some verticals having more success than others. Nonprofit organizations with fewer than 250,000 email addresses on file are growing their Web site traffic at 11% per year while some verticals are seeing flat or negative growth.

• Email file growth is supported heavily by offline activities. Email file growth is nearly three times that of Web site traffic growth, suggesting that organizations are adding more emails offline in addition to improving Web site registration rates. Some of the offline growth can be attributed to the increasing use of email appends.

• Online fundraising is growing. Fundraising including eCommerce is growing at 26%. However, similar to Web site traffic growth, not all verticals experienced positive results.

• Online average gift remains high. An average gift was $61, up from $56, reported in Convio's 2007 Benchmark Study. This is much higher than the typical average gift achieved through other direct response channels.

• Email open rates are declining. Average open rates are now at 14%, with email fatigue and the increasing use of appends as the likely primary factors. Convio's 2007 Benchmark Study reported an average open rate of 22%, but this was calculated from a much smaller cohort.

Let's get back to the Joneses — can you compare yourselves to them or not? Even with benchmarks based on your organization's mission and size, your online results are just part of the picture. How well your offline programs are integrated — direct mail, events, telemarketing, etc. — will have an impact on your online results.

Every organization is different, each with its own strengths, organizational challenges and goals. Organizations should use Convio's Online Marketing Nonprofit Benchmark Index™ Study as a starting point to better understand why metrics are important and which metrics and drivers can have the largest effect on your online marketing programs. Then test what works best for your own organization.