How do you know your investment in any marketing efforts is paying off? Most people refer to ROI, or return on investment as being tied to results. While it’s partially true, it’s not the whole picture. So how should we measure our marketing efforts relate to those in churches and ministry?

 

Here are a few questions you should consider:

 

Shouldn’t nonprofits have a ROI?

Because the return for most non profits and churches is not measured just in dollars, ROI is not always able to be measured.  In its essence, ROI is a mathematical formula: the money you earn, minus what you spent to earn that money, divided by how much you spent. In the U.S., it’s expressed in dollars, and the outcome is typically a percentage. Say you spent $5,000 and you earned $10,000; (10000 – 5000)/5000 = 1, or 100% ROI. For every dollar you put in, two dollars came out. So if you are wanting to grow your volunteer pool or the presence of your church or non profit in the community, ROI is not going to measure that, even though those things are critical for your success.

 

Shouldn’t we measure the return on ad spend?

Yes, and that’s an easy equation: the amount of money you made from the ads minus the amount of money you spent on them. But unless you understand the lifetime value of a donor or member, even the RAS can be misleading. You cannot measure the first interaction with a donor, visitor, or customer as the only way to assess success of failure of your campaign. You have to understand their entire journey with your organization.

 

Why is the LVC, or lifetime value of a customer, important?

Beyond the many other factors, understanding the Lifetime value of a customer or donor will give you a guide on how much you should spend in acquiring them through marketing, donor development or any other type of outreach-focused expenditure. LVC is measured in the total average giving or spending by a single donor or customer over the average time that person is engaged with a brand or organization.

So for example, my first visit to a church I donate $20 but the for next year I end up giving the church over $500 and I attend that church for the next 4 years, my lifetime monetary value to the church is $2,000. There are other factors like volunteering time and recruitment that would go to get a total picture.

Unless you understand the total value a member of your church or non-profit brings to the organization, is difficult to measure your marketing efforts only in terms of dollars.

Listen to more detail of this discussion on our podcast.

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