Why, Oh, Why Do We Have to Keep Writing About Donor Retention?
Every, single day when I open my e-mail inbox or an industry publication, there it is — the word RETENTION. Just today I got an e-mail about retention strategies and a separate e-mail about retention metrics — not to mention the e-mail last week about the "secrets" to retention.
It's almost like "retention" is in my inbox as much as "weight loss solutions" — and, similar to losing weight, I ask, why is this so hard? In my opinion, there are three reasons this seems to be such a problem for the nonprofit industry:
- Focusing on growth as the priority vs. renewal
- Not running the numbers
- Inability to make changes in strategy
Problem 1: Focusing on growth as the priority vs. renewal
Over the last five years, we all know acquisition has taken a pretty big hit — cost is up, cost per dollar raised is up, response is down. It has been harder and harder to get more new people into the organization as donors outside of community events. The focus should be on making sure our programs and strategies are optimized to make sure that all the donors we have already are happy, fulfilled and continue to give.
Yet, I would argue that many nonprofits are still putting more attention and prioritization on growing the file. I've been in meetings recently where there were significant opportunities to improve the engagement plan for current donors and therefore improve average gift and/or response (and ultimately annual retention), yet the majority of the conversation was about how to bring in new donors. Is this just a habit we need to break?
I'm not saying we should stop doing acquisition, but I am saying that we've got to make sure the renewal programs are the best they can be versus placing a higher priority on bringing more people into the organization. To look at retention is to focus on the following items:
- How are donors being acknowledged for their giving and support while also highlighting the need for more support? Do donors feel appreciated? Do donors feel as though you want a relationship with them?
- How many touches are in the program, and are they maximized? This doesn't only mean is it the best creative with the best segmentation. This means each touch is working hard enough for the organization, and if not, perhaps it is an opportunity to reduce expenses or reallocate to better opportunities. I'm not suggesting that we just drop appeals without testing them — but do the analysis. Make sure each campaign is working hard and drawing the types of donors you want.
- Identify the type of donor you believe is the best for the organization. Once you know what that behavior looks like, look to your other donors to cultivate that same behavior. Focus on the messaging; focus on the differences between your desired donor type and the other donor types. Not everyone will behave the same, but every organization should be spending significant time understanding who its current donors are and what makes them tick (yes, I mean understanding them from an attitudinal perspective). Plus, you must be able to define the best donor behavior you want to try to drive within your other donor relationships. After all, if you know what the "best behavior" is and who the "best donor" is, then it should make acquisition more targeted and less about "quantity" and more about "quality."
Problem 2: Not running the numbers
Let's keep this short and simple. The numbers prove it. And, by the way, it's nothing new — people are just not taking the time to run the numbers on their own files. Any organization that took the time to run these numbers out by just a few years would find it almost impossible to ignore the emphasis needed on retention.
Years ago, Adrian Sargeant told us in books, speeches, articles and many more ways that, "Improving donor retention by just 10 percent can double the lifetime value of your donor database!"
Bloomerang ran the numbers on the averages for the industry, and here's what it came up with — it's plain and simple. If your organization is not prioritizing this over everything else, you are focused in the wrong area. (See image at the top of the page.)
From Bloomerang: According to the Association of Fundraising Professionals' latest Fundraising Effectiveness Project data, the average donor retention rate is 41 percent. Using a sample set of 5,000 donors with an average donation of $200, what happens to donation totals if we increase that rate by just 10 percent?
Problem 3: Inability to make changes in strategy
In addition to looking at your communication schedule and the types of donors and their behaviors, take a hard look at your "strategy." In this instance I'm talking about messaging and channel integration. Perhaps the first look needs to be at the communication experience you are providing across all of your channels. If your organization has not taken great care to integrate your channels, you could not only be over-touching your donors, but you could be sending mixed and confusing messages.
Integration means you not only look at the calendar and when people are being touched, but how the messages from one touch to another build a solid case for giving and a consistent approach to building awareness and raising funds. And while you look at those messages and how integrated they are with each other, make sure you take the time to understand if they are the appropriate messages for your donors.
For years and years we have followed a pattern in this industry. Something works for one organization, and everyone tries it eventually — that's how we ended up with everyone having an annual fund, everyone having a match challenge, etc. But in the end, what matters most is if your messaging is connecting with your donors. Does it motivate them to not just give a first gift but continue to confirm their decision to give so they keep giving? Ask yourselves, have you talked with your donors lately about your mission and your messaging? Have you asked your donors why they are giving and what makes them not give? Have you talked with your donors who have stopped giving to make sure you understand why? Take the time to do this, and then apply those findings back on top of your strategy.
Yes, it means you might need to test some significant changes in messaging — but again, what can be more important than doubling the lifetime value of your donor file?
Vice President, Strategy & Development
Eleventy Marketing Group
Angie is ridiculously passionate about EVERYTHING she’s involved in — including the future and success of our nonprofit industry.
Angie is a senior exec with 25 years of experience in direct and relationship marketing. She is a C-suite consultant with experience over the years at both nonprofits and agencies. She currently leads strategy and development for marketing intelligence agency Eleventy Marketing Group. Previously she has worked at the innovative startup DonorVoice and as general manager of Merkle’s Nonprofit Group, as well as serving as that firm’s CRM officer charged with driving change within the industry. She also spent more 14 years leading the marketing, fundraising and CRM areas for two nationwide charities, The Arthritis Foundation and the American Cancer Society. Angie is a thought leader in the industry and is frequent speaker at events, and author of articles and whitepapers on the nonprofit industry. She also has received recognition for innovation and influence over the years.