Last week I looked at the Long-Term Value of new donors. I used a 5-year timeframe to quantify LTV, as one possible approach.

An important companion metric to LTV is Long-Term Cost (LTC). LTC is sum of Cost of Acquisition (what it costs to acquire a donor) and the Cost of Cultivation (the cost to cultivate the donor beyond acquisition, using the same timeframe as used in LTV).

LTV and LTC are two building blocks to understand the acquisition program's ability to generate net revenue and to provide a return on investment.

Here's an example:

LTV = $350
LTC = $80 (COA is $40 and COC is $40)

The Long-Term Net is $270 (LTV - LTC) and the Long-Term ROI is 4.38 (LTV / LTC).

Try calculating these metrics on your various acquisition programs. The result will provide insight into where you should be spending your precious acquisition dollars for maximum growth.