The three attribution models
You may want to assess the value of your programs, tactics, and channels outside the measurement funnel, and there are at least two advanced techniques you may find useful.
This can help you understand the impact of involving your audience in multiple programs.
A basic way to conduct a cross-involvement analysis is to look at two types of involvement with a nonprofit. You can look at things like how many people each program attracts, demographic differences, and how the giving behavior for those involved in both programs differs from the giving behavior of those involved in just one or the other.
This technique can help you identify the types of people who are more likely to engage in both programs. You can then plan outreach efforts that draw such an audience in and thus boost the
overall lifetime value of your donor base. Naturally, this analysis can expand to cover all types of segments or involvement types. You don’t have to limit yourself to just two groups.
Unlike revenue and other direct metrics, attribution models measure the impact of a specific tactic that may have happened before the conversion.
There are multiple attribution models, but we focus on the three used most frequently: linear, time-decay, and position-based. They uncover the value of different touchpoints in the conversion journey — email, direct mail, telemarketing, or online advertising, to name a few — by assigning varying credits to each.
In a linear model, which is most helpful for measuring your marketing strategy holistically, each touchpoint receives equal credit.
In a time-decay model, the touchpoint closest to the conversion receives the greatest credit and the one farthest from the conversion receives the least credit. This model is effective at determining which channels regularly drive conversions and which are primarily top-of-funnel.
In a position-based model, the majority of the credit (let’s say, 40 percent) is assigned to the first and last touch points prior to conversion. The remaining touchpoints receive equal credit. It’s a model that can help you identify which channels or tactics are best for acquiring donors or audiences and which are best for converting them.
Tying It All Together
Now that we’ve gone over what indirect metrics are, the specific direct and indirect metrics that comprise your measurement funnel, and reviewed advanced techniques for measuring strategies, tactics, and channels, how might we tie all that together to craft a budget and plan for the coming year? Here are the steps we recommend:
- Begin with your pre-pandemic base forecast for fiscal year 2020 (FY20) and apply the gain in donor count and revenue since the pandemic began. Add the retention tactics and new donors acquired during the pandemic.
- Evaluate the impact of your non-fundraising tactics by leveraging both direct and indirect metrics.
- Tweak your investment options—you may end up allocating more to digital ads, for example, and less to email campaigns—to optimize your communications mix (one that includes fundraising, acquisition, and retention strategies). This will balance fundraising with other tactics, and also your short-term revenue goals against the long-term health of your donor file.
As you plan for the future, remember to look outside of just pure direct metrics. In fact, focusing only on hard numbers could lead to a degradation of your donor file health in the long run.
Indirect metrics can inspire your nonprofit to enact better engagement and retention strategies. This is valuable for stabilizing the health of your file and driving greater revenue in the long run. The investment in some of the tactics we covered will hopefully result in a loyal base for your mission in the long term. Armed with these analytical tools, you could begin to see the immediate benefits of tracking both direct and indirect metrics for your nonprofit.