Ecommerce Master Class Step 4: Picking and Testing the Best Donation Option

Now that we have identified your donation personas (Step 1), chosen your first nonprofit (Step 2), and established a relationship with your preferred nonprofit (Step 3) …

It’s time to choose and test the best donation options for your business.

This is Step 4 in the process. If you haven’t completed the previous steps, please go back and walk through them. This process is simple, but it’s necessary to follow each step sequentially to optimize your results.

The ten key steps are as follows: 

1. Choosing your donation persona
2. Choosing your ideal charity
3. Running a test for your ideal charity's cause
4. Picking and testing the best donation option
5. Conversion best practices
6. Optimizing AOV and LTV
7. Understanding compliance
8. Marketing the nonprofit relationship
9. Leveraging multiple personas
10. Measuring success

In Step 4 of this Master Class, we are going to teach you about different types of donation activations, like:

• Which donation methods have the biggest revenue impact
• Round-ups at checkout
• Add-on donations at checkout
• Percentage of sales
• Fixed donation amount per sale
• Donation matching
• Donating loyalty or rewards points

Which donation methods have the biggest revenue impact?

First, a basic rule of thumb:

Cause marketing, or partnering with a nonprofit, improves conversion, average order value (AOV) and Lifetime Value (LTV) because the customer is – on a certain level – resonating with your business.

It's no surprise then that the more you engage from a partnering visibility standpoint and also from a standpoint of matching or also contributing donations to your nonprofit, the greater the improvement in conversion, AOV and LTV will be.

In short – the more you invest in the relationship with your donations, the greater you signal support for the nonprofit and the more likely the customer is to engage deeper with you as a company.

Of course, it’s important you follow all ten steps of the Master Class to maximize impact.

With that in mind, here are the common donation methods and the typical results* we see:

Round-ups

• Conversion lifts 10-54%
• AOV lifts +20%
• LTV lifts +15%

Add-on donations at checkout

• Conversion lifts 10-54%
• AOV lifts +20%
• LTV lifts +15%

Percentage of sales

• Conversion lifts 25-54%
• AOV lifts +20%
• LTV lifts +20%

Fixed donation amount per sale

• Conversion lifts 35-54%
• AOV lifts +20%
• LTV lifts +20%

Donation matching 

• Conversion lifts 35-54%
• AOV lifts +20%
• LTV lifts +20%

Loyalty or rewards points donations

• Conversion lifts 25-44%
• AOV lifts +10%
• LTV lifts +10%

Round-ups at checkout

A round-up at checkout is the easiest test to run and will definitely have a positive impact on your conversion.

We’ve also found that it's the easiest test to get buy-in from management and other members of the sales and marketing teams because the commitment by the company to make matching or additional donations is not present.

So, if part of your challenge is getting company buy-in on the impact that a nonprofit partnership will have on your conversion, AOV, and LTV, then you probably want to run a round-up test first.

Of course, one of the drawbacks of round-ups at checkout is that the customer doesn’t perceive a strong level of engagement by your company since you are only facilitating the customer's donation to your chosen nonprofit.

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Pro Tip: For your round-up test, try a round-up & match campaign. It shows commitment to your customers, and it’s a low-cost way to test the waters on the conversion impact with limited donations impact out of the gate for your company.

Add-on donations at checkout

Add-on donations at checkout is an easy test to run and is analogous to round-ups.

Like round-ups, it’s an easy test to get buy-in team members because the commitment by the company is to simply market the association – it doesn’t involve any financial contribution by the part of the company.

Like round-ups, donations at checkout don’t convey a strong level of engagement by your company to the nonprofit’s cause. Even with that caveat, you will find that when marketed, it will have a nice, positive conversion impact.

Pro Tip:The best way to measure the impact of an add-on donation at checkout test is to limit the donation options to $1, $2, and $5 donations. It’s also helpful to show a progress bar with the amount of donations amassed so far. This is a showstopper both for lifting conversion and for driving donations.

Percentage of sales

A percentage of sales campaign is where your company donates a percent of the total cart value to a chosen nonprofit.

The advantage of this campaign is that it significantly improves conversion and conveys a very strong sense of commitment on the part of the company to the nonprofit. 

However, it also commits the company to a certain level of giving that the company might not be comfortable with until it sees the positive effects of conversion improvement, AOV, and LTV.

Nonprofits love this campaign because it tends to give them more donations – by definition, every customer purchase triggers a donation. 

Initially, it’s best if you run a series of tests to try out different donation methods.

With that in mind, set aside a budget for this percentage of sales campaign by drawing from your estimated sales. For example: if your weekly sales are $300,000 and you plan to donate 1% of sales, you can expect to donate $3,000. However, keep in mind that you should also expect to see a conversion improvement and immediate AOV jump by running a percentage of sales campaign. This means that your sales will increase – as will the donation amount. 

We absolutely recommend that you run this test with your chosen nonprofit because the results are often astounding. We also recommend that you don't run this test for the full 120-day test period. 

You should run this test for a portion of the test period so that you can compare its results to the other tests that you're running like round-ups at checkout, donations at checkout, donations at checkout with matching, and any others.

Pro Tip: Allow the customer to add to your donation with their own donation at checkout. 

Assuming you followed steps 1 and 2 closely, your customer should closely identify with your chosen nonprofit and will want to support this cause. Giving them a chance to add an additional donation will not only increase the overall donation amount you will be sending to the nonprofit, but also further engages the customer and builds a closer connection between your company, the cause, and the customer. This can pay strong dividends later in increased customer LTV.

So, in addition to donating a percentage of sales, allow the customer (at checkout) to round-up or add a fixed dollar donation of $1, $2, or $5.

Fixed donation amount per sale 

Like a percentage of sales campaign, adding a fixed donation amount at checkout is also very impactful.

Again, we recommend you do this as part of a test in your first 120 days.

As a general rule for fixed value donations from your company, start with these five basic principles:

1. Determine a minimum purchase amount to trigger a donation.
2. Do not make the minimum purchase too lofty. If your average cart size is $250, keep the cart minimum for a fixed value donation much lower – almost at break-even level. At the outset, don’t try to use cart minimums for the donation to lift your AOV because the fact that you are doing fixed value donations will lift your conversion rate materially. 
3. Test the minimum cart amount you want to require triggering your donation. We’d love to give you a rule of thumb on guidance, but every company’s average order value and median order value is clustered differently. Focus on getting #2 right. Once you’ve enjoyed the conversion lift, work on testing the minimum order requirement to maximize net profitability for your company as well as nonprofit impact.
4. Keep your company’s donations simple and small to begin with. We recommend testing a $1, $2, and $5 donation company at checkout. Again, this is a direct company cost, and the goal is to establish a sustainable nonprofit partnership. If you are able to drive serious conversion, AOV, and LTV impacts with a $1 donation from your company on every cart, then the campaign itself will perform better. 
5. Always reiterate to the customer that their purchase triggered a donation. It’s extremely important that the order confirmation page – and sequential email – has numerical and graphical confirmation (i.e. nonprofit’s logo) that you will be donating a fixed amount as a result of their purchase.

‍Pro Tip: During the cart checkout and the order confirmation process, show a progress bar that indicates the total money donated so far. This graphical representation of your commitment will help with deepening your customer engagement and drive excitement.

Donation matching

Donation matching is a great way to engage customers and provide a healthy conversion improvement. This can often be north of 35%!

What we love about donation matching is that your company and your customer are joining together economically in a commitment to support the nonprofit. It’s a true relationship based on a mutual interest in a specific cause.

Again, we recommend you run a donation matching campaign as part of your 120-day test.

As a general rule for matching value donations from your company, start with these five basic principles:

1. Determine a minimum sale amount to qualify the donation from the customer to trigger a donation from the company. For example, the customer has to meet a $25 purchase order value in order to make a donation that your company will match.
2. Determine a maximum donation match that the company will make with any one sale or customer. Active donors to a nonprofit (and the nonprofit itself) will figure out quickly that they can double the donation's impact by sending new customers your way. This is almost always a good thing: you’ll be lifting your conversion, sales, and profits nicely with this campaign. 
3. As with percentage of sales campaigns, once you have established a baseline with your conversion, consider testing the minimum cart amount you want to require triggering your donation. Once you’ve enjoyed the conversion lift, work on testing the minimum order requirement to maximize net profitability for your company as well as nonprofit impact.
4. Keep your company matching donation simple and small to begin with. We recommend testing with the following at checkout: “We will match up to $1, 2, and $5 donation” .
5. Always reiterate to the customer that their purchase triggered a donation by your company. It’s not necessary to say a donation was “given in their name,” although you can. But it is extremely important that the order confirmation, and confirming sales email, has numerical and graphical (nonprofit’s logo) confirmation that you will be donating a fixed amount as a result of their purchase and (very important) that you were matching their donation. Use as much “we” (as in the customer and your company) connecting as possible.

‍Pro Tip: During the cart checkout and the order confirmation process, show a progress bar that indicates the total money donated so far. This graphical representation of your commitment will help with deepening your customer engagement and drive excitement.

Donating loyalty or rewards points

Loyalty points can drive a triple whammy of customer conversion, engagement, and long-term loyalty. Using this method allows customers to donate their loyalty points to a nonprofit, which your company then converts into a specific dollar amount to donate. 

If you have a vibrant, pre-existing loyalty or rewards points program, then this is an attractive program for you to consider testing.

If you don’t have a vibrant loyalty program, pass on this test. The loyalty and rewards program itself needs to be pre-existing and self-sustaining for loyalty and rewards points to pump up conversion with ecommerce.

‍Pro Tip: Work that loyalty program email list! The best thing about a rewards program is you can promote regularly to your rewards members that you are supporting a nonprofit, are giving members the option to donate rewards points to the nonprofit, and make it very easy for them to do so online/in the app/in-store. It's a great combination of connecting your customers to your cause (remember in Step 1, we matched your nonprofit to your customer personas). This builds long term engagement and lifts lifetime value. We’ll discuss optimizing LTV impact in Step 7.

Summary

First and foremost: remember you are setting up a 120-day test with your nonprofit to discover what donation activation is the best fit for your company and the partner nonprofit. 

We recommend you pick two different methods.

1. Choose a method where you have little or no economic cost, such as round-ups or non-matched customer donations at checkout.
2. Pick a method that includes your company making an economic investment, such as percentage of sales, matching donations, or fixed donations per sale.

In the following steps, we will lay out how to deploy your nonprofit partnerships in ecommerce to increase conversion, average order value (AOV), and lifetime value (LTV).

*Results may vary depending on your deployment, usage, adherence to best practices, customer personas, and demographics. Estimates of performance are based on internal data and various external marketing studies and surveys.‍

‍Disclaimer: Examples and brands in the Ten Step Ecommerce Master Class are often, but not always, customers of Change. We try to show best examples of best practices in this Master Class, which sometimes includes businesses which are not (yet ☺) Change customers. We have no affiliation with any of the company or nonprofit examples shown above.