3 Top Analytics Techniques Every Fundraiser Should Know, Part 3

[Editor’s note: This is the third and final part of a three-part series based on a session, “Analytics in Plain English: 3 Top Techniques Every Fundraiser Should Know,” presented by Don Austin, director of analytics at Infogroup | Nonprofit, Lawrence Henze, managing director of Blackbaud’s Target Analytics, and Bryan Terpstra, vice president of client services at LW Robbins, at the 2010 New York Nonprofit Conference held Aug. 24-25. View part 1 here and part 2 here.]

Lapsed donors
Terpstra wrapped up the session by discussing ways to motivate and engage lapsed donors, as well as how to use data and analytics to improve lapsed reactivation rates. He began by telling the audience to ask themselves three questions:

• Who is lapsed?
• How long have they been gone?
• Why did they leave? “If you can answer why they left,” Terpstra said, “you can figure out how to get them back.”

There are three big groups of lapsed donors, Terpstra said:

• Pre-lapsed — 10-12 months with no gift
• Lapsed — last gift was within 13-24 and 25-36 months
• Long lapsed — last gift was 37+ months ago: “Don’t give up on long lapsed donors,” Terpstra said.

It’s not news that reactivating lapsed donors is less expensive than acquiring new ones, but did you also know that reactivated lapsed donors typically have a much higher long-term value? To illustrate that point, Terpstra provided a case study example of an organization he worked with that analyzed its reactivated lapsed donors versus new donors. The reactivated donors had a higher annual renewal rate and a much higher average gift, resulting in a lifetime value after five years that was more than double that of new donors.

Exploring lapsed donors vs. new donors even more, Terpstra cited a recent study of more than 20 direct-mail charities by Brickmill Marketing Services that showed acquiring new donors is getting even harder. According to the study: