Recently I was speaking to an association about the cost to acquire a new member. A few individuals thought the industry norm for a nonprofit of their size was about $55 in resources, including staff time. This spurred some debate about budgets, approvals, and how much the association should be spending on new member acquisition.
One of the largest budget items for many organizations is marketing. Knowing the lifetime value of each member will help set appropriate budgets for annual marketing campaigns.
To estimate the cost of acquiring a new member, you should consider the following:
- How much does your organization spend in marketing to acquire new members annually?
- What is the average number of new members each year?
- What is the average number of years an individual is a member?
- Do the numbers add up? Is your nonprofit actually increasing net revenue when it comes to membership acquisition?
Knowing the lifetime value a new member brings to your organization will help you prioritize your marketing budget. Annual marketing campaigns aimed at acquiring new members can be successful when you know how much value a member brings to your organization over the lifetime of their membership.
Do you know the average lifetime value a member brings to your nonprofit? How should this knowledge impact what you spend to acquire new members?
© 2015 Nick Spencer & Sutton Enterprises Inc.
Nick is an experienced Marketing, Branding and Association Management leader. Throughout his career, Nick has developed various strategies to support the nonprofit and association management worlds. At Sutton, Nick develops Marketing and Sales Strategies and plays a key role in the development and implementation of special projects.
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