My Favorite Metric
So many metrics, so little time!
At Allegiance Fundraising Group, we use a healthy variety of metrics to determine the success of our direct mail campaigns. Response rate, average gift, cost to acquire – you name it, we can calculate, analyze, and share insight. I could talk for hours about how successful a campaign actually was, slicing and dicing with the best of them. Give me a roomful of people interested in the nitty-gritty, and we’ll go down the rabbit hole together and come out muddy on the other side.
But what if we’re short on time? If I need to quickly surmise how an active donor segment performed, what’s the one metric that I’d highlight? Without a doubt, Gross per Piece Mailed (GPPM) is my go-to number.
GPPM = Gross Revenue/Quantity Mailed
GPPM balances quantity, revenue, response rate, and average gift into one performance metric. GPPM is especially effective when you’re looking at results over time. With a few years of GPPM history by package, and you can now determine package performance by segment.
Here’s an example. The chart below shows GPPM for WAFG’s (a fictional organization) Additional Gift mail segment over a 3-year period:
Just a quick review of this chart shows me what I need to communicate — Package 1 and Package 2 are the top-performing packages for this segment and that there are testing opportunities, particularly in fall and winter campaigns. Additionally, there are now benchmarks to judge future performance.
Comparing campaigns in the same time frame year-over-year also helps you to understand external factors — events not directly related to your campaigns but affecting them nonetheless. Here’s the same chart framed with some of those elements:
Sometimes these external factors — weather, politics, other newsworthy events — won’t impact your campaigns, but many times they can. Plotting their timing can help you to frame the conversation. Why didn’t the Summer 2016 campaign perform as well as the others? The forest fires in the area diverted donors’ attention from your nonprofit to another.
Using GPPM as the go-to metric simplifies your case. Plotting historical GPPM bolsters it by benchmarking both campaign and package data alongside external events.
Want to learn more about simplifying your metrics? Email me!