Boosting Nonprofit Revenue with Subscription Billing

A recurring billing model is the holy grail for many nonprofits, as it provides a regular and predictable source of revenue that can smooth the “feast or famine” cycles plaguing yearly business plans. However, a recurring subscription can be leveraged even further to increase revenue on an individual basis using these suggestions.

Reducing “Sticker Shock”

A key advantage of recurring billing is “sticker shock,” a well-studied phenomenon describing a person’s tendency to view smaller, incremental payments as less expensive than a one-time charge. This holds true even when the final amount is identical, so that a monthly payment of $10 will be viewed as a “better deal” than a one-time $120 charge. This fact can be leveraged to boost conversion rates and revenue by providing a value proposition to the buyer, especially when phrases like “small monthly payment” are used in advertising copy to prime the customer to perceive savings.

Demonstrating Accomplishments to Increase Donor Engagement

Studies have shown that donor revenue increases when marketing can successfully convey the value of the accomplishments that those donations are funding. The Heritage Foundation, a political organization in Washington, D.C., recently performed a series of tests across different donor landing pages. These tests demonstrated the effectiveness of a page layout and copy that put an above the fold emphasis on the specific goals and accomplishments of the Foundation’s work, and how those goals were met with the help of donor funds.

Even though this new landing page was much longer than the original, its performance metrics were decisive, with average donation amounts up by 189 percent and conversion rates up by 74 percent.

A recurring relationship with donors or customers allows a nonprofit to present this type of in-depth value and accomplishment breakdown on a regular basis. Indeed, a subscription often gives a donor a feeling of “ownership” which makes them even more likely to read and appreciate marketing information about what they’re helping to fund. This makes them promising targets for up-selling and otherwise increasing donation amounts in the future, and encourages them to renew their recurring agreement, creating a positive feedback loop for the organization.

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