This article was originally published in my Digital Tip-A-Month Newsletter. Sign up to get more tips like this in your inbox once a month.
The latest version of the M+R Benchmarks report came out recently, making this a great time to take a look at your big-picture performance metrics – and to establish your own benchmarks, if you don’t have them.
A benchmark is a point of reference, a yardstick against which to measure yourself. The annual M+R report combines data from dozens of nonprofits to give you benchmarks from peer organizations, everything from the basic essentials like open rates and email conversion rates, to new benchmarks like site speed and mobile traffic, investment and return in digital advertising, and donor retention.
But as I like to tell my clients, your first go-to benchmark should always be your own performance. Whether you’re comparing against yourself, or against peer groups, developing your internal benchmarks is a key first step.
One Hour Exercise: Benchmark Yourself
You can (and should!) develop benchmarks for every part of your online program. This boils down to generating some long-term averages for your key metrics. An easy place to start is with email performance:
- Download the performance data for all of your recent emails. Ideally, use the past 6-12 months of data – the more data points you have, the more reliable your averages will be. (But don’t go back too far, because these rates will change over time.)
- Add up your total messages sent across all emails during this period, and do the same for the total opens across all emails.
- Divide total opens by total messages sent, giving us the average across all messages. That’s your benchmark open rate.
- Do the same for click-through rate, unsubscribe rate, and, if appropriate, conversion rate.
That gives you your four most basic benchmarks. You easily can do the same for any other metric where you have the data available, and with more effort, gather or start tracking data where you aren’t currently doing so.
Going Deeper
If you want to go deeper, or if you already have those benchmarks, try breaking them down for subsets of your messages. You could calculate them for different types of messages (M+R uses advocacy, fundraising, and newsletters, though you may have other types), different audiences (emails to highly engaged activists or past donors are likely to have higher engagement rates than those to your full list), or any other dimension that makes sense for your organization.
Analyzing Your Results
The first step is always, always, to compare your numbers to your own performance. How do they compare to past years of your own data? How do recent months or individual emails rank against your benchmarks? Your organization is unique, and so is your audience, so why would your benchmarks look just like everyone else’s?
On the other hand, comparing yourself to sector-wide benchmarks can help inform your work in a number of ways:
- Is it everyone, or just you? If your email response rates (for instance) are down from past years, you’re not alone. Benchmarking can help you gauge if changes in your list’s performance over time are related to your activity, or are part of a larger industry trend.
- Are you falling short in a particular area? Last year, the average organization got 16% of online revenue from monthly giving – and that number is growing. If you accept monthly gifts but aren’t seeing much revenue from them, that’s an opportunity for improvement.
- Have you skipped investing in areas where other nonprofits are seeing great success? Seeing that the average nonprofit spent 24% more on online advertising last year (with strong returns, too) may be the data you need to convince your boss that it’s time to do more.
You can plug your numbers into this tool on the report site to generate an automatic comparison to some of the key metrics in the report. (Or just print out your new benchmarks and keep them handy by your desk.)
Don’t just panic if your numbers are low, and don’t simply pat yourself on the back if you’re above the benchmark. The key is to look at your program, and the full story your metrics tell, and understand why you performed the way you did. Benchmarking against yourself helps you understand whether your current performance is good or bad for you – and helps you zero in on areas to improve.