6 Guiding Principles for a Successful Acquisition Strategy
Inflation and looming economic pressure have made Americans reevaluate everyday purchases, such as gas for their cars or a dozen eggs. Naturally, when wallets are feeling squeezed, charitable giving can be one of the first things to be questioned in a budget. That is why now, more than ever, nonprofits need to think more strategically about their acquisition investments.
According to the Fundraising Effectiveness Project (FEP), 70% of donors only make a one-time gift. The goal of acquisition is not to only have a one-time gift from a donor, but rather to form a long-term relationship of giving to your organization. As with any new relationship, first impressions matter. Being thoughtful about what your potential donors want and need from your organization will be crucial to establishing a long-term relationship with them.
Because acquisition sets the stage for the relationship you will have with your donors, it is important to keep these six guiding principles in mind to successfully build your donor acquisition strategy.
Before you embark on an acquisition strategy, make sure you protect your investment by having a plan in place to create an experience that will emotionally bond your newly acquired donors to your organization and secure that all-important second gift. This may require the investment of more time, money and effort — but it will pay off in the long run.
Having the technology in place to collect information on new donors as soon as they come in contact with your organization will allow you to thoughtfully curate their experience based on their interests and likes, cementing their bond with you for the long haul.
In their everyday lives, your donors are used to experiencing highly personalized service when shopping online and using social media, so why should they expect anything less when considering giving to your charity? Creating a personalized, memorable experience will go a long way in establishing a long-lasting relationship with them.
Economic woes not only impact donors, but also nonprofits themselves. When budgets are frozen or cut, it is hard to imagine spending more money upfront for the long-term investment of acquisition. Having a clear understanding of the risks, rewards and timeline involved with acquisition are imperative for a successful outcome.
The best way to do this is by setting a realistic budget for your acquisition strategy and understanding your organization’s risk tolerance. Before engaging in the acquisition process, your organization needs to be in agreement about what the investment entails and understand that it is not an overnight financial boon. Because it may take a couple of years to break even on your investment and a few more to truly reap the rewards of your efforts, your team, including leadership, needs to have a clear and patient understanding of that reality.
3. Case for Support
There are many nonprofits doing a lot of great things; so, why should someone donate to you? Identifying why your mission inspires donors by using data to identify their reasons for supporting you will make your organization an essential item that will not be cut from their budget.
Humanizing your mission to appeal to potential donors through first-hand accounts and stories will help draw donors to your cause. Tailor materials specifically for each donor in well-placed articles and engaging social media content to inform new donors and retain existing ones.
4. Channel Diversification
Omnichannel communication is a critical component of acquiring and retaining donors — but only if you’ve done the research to know which channels are most worth the investment. It’s critical before you start your acquisition efforts that you know the audience you are targeting and know where they spend the most time.
You may want to acquire the same kind of donors you currently have, acquire a new demographic or utilize a new channel. Depending on your focus, the approach and expected results may look different. Encouraging new donors to share their experiences at your organization on social media or subscribing to text messages will keep new donors interested and engaged.
Communicating through diverse channels offers greater opportunities for building brand and reaching more prospective donors more effectively, but it also comes with its own challenges. Being consistent with your communications and understanding which channel is most appropriate for your audience will be the key to success.
Always be testing. The great thing about direct response is the ability to test, read results, and then use those data points to evolve your program and retain donors for life. Testing allows data to be the diplomat in making decisions on everything from copy and design to whether it’s better to post at noon on Wednesday or 2 p.m. on Thursday.
Testing can come in all shapes and sizes; however, all tests are not created equally. Here are some key things to remember when you are testing aspects of your acquisition program.
Have a goal. It’s important you have a specific goal in mind that you are trying to move the needle on with your testing — response rate, average gift, retention, etc. You should not test unless you have clarity on what area of your program you hope to affect. Develop your hypothesis, and use it as an anchor to create your test.
Focus on one variable. Always remember to test only one thing at a time. If you change multiple variables, it is difficult to ascertain which variable drove the improved response or decreased performance. If you have the budget, you can consider engaging in multi-variate testing, but you would need an analyst to help set up the testing and interpret the results.
Aim for significance. Because there is a cost and risk associated with testing, it’s critical that you set up your testing appropriately so that you have results that are statistically significant and can be acted upon. Universe size will be important. The larger the test sample, the more statistical confidence you will have in your results. It is also important to establish a control panel of similar make-up (volume and segmentation) so you can measure the test results against it.
Account for cost. When evaluating results (especially on a net impact), be sure you are using rollout costs since test cost per piece can be much higher.
Go digital. Testing within digital has its advantages when it comes to cost and speed-to-market with learnings. Areas of digital acquisition testing include subject lines, donation button placement, email marketing and donation form A/B testing. Use digital as an inexpensive testing ground. Learn from digital and use that for other efforts.
Don’t be afraid to lose. Keep in mind, not every test will be a winner. In fact, more often than not the test loses. But testing is still worthwhile because, when you do find a winner, the positive impact on your program can be exponential and may even be extrapolated across more than one campaign.
How is your team measuring success? Is it through new donors, repeat donations, media impressions? Digging into the data discovered in your testing and determining the metric by which you measure success is helpful in determining where to focus your acquisition efforts.
Data is a critical component of any strategy, and it is a powerful tool you can use to gain support for investment. Having hard numbers to show your leadership team about the cost to acquire, long-term value, cost per dollar raised, the payback period, and coverage ratio will allow you to clearly and factually share metrics that will help you make your case.
Acquisition is the lifeblood of a healthy direct response program. Strategically investing in acquisition in good times and bad is paramount and can make all of the difference in how your organization emerges from an uncertain economy. Connecting with your donors through personalization gleaned from acquisition data is the key to inspiring life-long giving and breaking the cycle of one-time transactional donors. Making the investment upfront to understand your target audience better will equip your organization to deliver a memorable experience from the start and lead to greater acquisition success.
The preceding blog was provided by an individual unaffiliated with NonProfit PRO. The views expressed within do not directly reflect the thoughts or opinions of NonProfit PRO.
Rebecca “Becca” Segovia is a seasoned fundraising executive with a strong vision and passion to help nonprofits reach more donors and raise more dollars to further their mission. With over two decades of leadership experience spanning the disciplines of marketing, fundraising, and technology, Becca provides guidance across client services, marketing and sales to help nonprofit organizations achieve breakthrough results. She has a special affinity for omni-channel and relationship-based fundraising strategies aimed at increasing donor lifetime value and nonprofit health.