How much should you spend on ads or growth at your nonprofit? What is each email address worth? You need to know how to calculate customer acquisition cost and lifetime value.
In this webinar, author and University of Southern California Professor Paul Orlando gives a friendly and accessible introduction to Unit Economics. Paul will demonstrate methods to assess and calculate Customer Acquisition Cost (CAC), Lifetime Value (LTV), and more.
What You’ll Learn
- Ways to calculate Customer Acquisition Cost (CAC) and Lifetime Value (LTV) with additions like customer segments, cohorts, retention, and more (and why they can be imperfect methods).
- How to manage the cost of growth along with potential value generated.
- The difference between growing and scaling a nonprofit.
Important Definitions
Customer:
Anyone who exchanges money with your nonprofit i.e. members, donors, ticket holders, corporate sponsors, etc
Lifetime Value (LTV):
“The gross profit that an organization earns over the relationship with a customer.”
Customer Acquisition Cost (CAC):
“Cost of getting a paying customer ‘in the door.’” (figuratively or literally)
Key Takeaways from this Webinar
- It’s important to balance Customer Acquisition Cost and Lifetime Value with time. As Paul mentions, it’s a race, and you have to make sure you don’t run out of time!
- There are many ways to get a customer/donor “in the door.” A variety of methods are discussed in the webinar by both the presenter and attendees.
- Using the formulas shared in the webinar, nonprofits will be able to calculate Lifetime Value and Customer Acquisition Cost and use that data to help guide their focus.
- Segmenting customers/donors is an important part of calculating and tracking LTV and CAC.
Bonus Q&A
Stay tuned to the end of the webinar for the Q&A and get answers to these questions:
- Should ads be focused on the top three performing segments and consistently test for that segment using a single platform?
- Which is better: Excel templates or online calculators?
- Where should you begin if you are new to Unit Economics?
Watch the recording to learn how to calculate customer acquisition cost and lifetime value!
Additional Resources
- Apply for the Google Ad Grants: https://www.google.com/nonprofits. If eligible, your organization could receive up to $10,000 per month for Google Search ads. Learn more about eligibility here
- Join TechSoup Connect Western Canada Chapter for more educational webinars and events: https://events.techsoup.org/techsoup-connect-western-canada-chapter/. You can also read more of our event recaps here: https://digitalnonprofit.ca/category/event-report/
About the Presenter: Paul Orlando
I build internal incubator/accelerator programs around the world (including Los Angeles, Hong Kong, Rome, and remote), getting companies to solve problems that they couldn’t in other ways. Building these programs I unlock new revenue and partnership opportunities for large organizations. These programs build autonomy and skills that keep employee retention high in an era when companies need to maintain their top talent.
Join the TechSoup Connect British Columbia Community!
TechSoup Connect British Columbia hosts online and in-person tech-for-good events that bring nonprofits together. We help you build communities, share resources, and discover new opportunities for social impact.
We welcome nonprofits, consultants, technologists, funders, and everyone else passionate about using technology for good.
Check us out: https://events.techsoup.org/techsoup-connect-british-columbia-chapter/
Sponsors
A HUGE thanks to our amazing community partners and sponsors. Give them love! Spend 💵with them!
