On Mon, 4 Mar 1996 Sallyclark <[log in to unmask]> wrote:

>Does anyone have any suggestions for estimating the "lifetime value" or of
>a member to the art museum in terms of future membership and other cash
>contributions?
>
>In other words is there a formula for economic impact on the institution
>if we bring in 10 members.  We can calculate renewal rates, but what other
>factors and or values should be calculated?

"Lifetime value" is a concept developed by the marketing community, I
believe.  There is a way to roughly calculate the lifetime value, either by
using statistics from existing members or by educated guessing.

First, you determine the "lifetime" of the member.  How many years, on
average, do you expect a person to be a member.  Then, look at all they
ways your member will have an economic impact as far as benefits to you.
This can include not only membership renewals but also estimated gift shop
sales per year, food service sales, membership upgrades (from individual to
family?), lecture attendance, referrals of new members, etc.  You might
also want to look at the yearly costs to you (membership notices, mailings,
free admission, etc).  The actual benefits tend to follow a sloping curve,
with small profits in the early years, larger ones later as you gain
advantages from a loyal member, then tapering off as the member starts
"dying".

Hope this helps.

Kate

Kate Desulis                            (312) 322-0821 phone
Adler Planetarium & Astronomy Museum    (312) 322-2257 fax
1300 S. Lake Shore Drive                [log in to unmask]
Chicago, IL 60605                       URL http://astro.uchicago.edu/adler/