The Connection Between Donor Retention, Donor Relations
This is a powerful quote by Lynne Wester:
Fundraising has a major problem facing its sustainability, and it has nothing to do with the charitable tax deduction, with the transfer of wealth or with the new generation of donors—the Millennials. It has everything to do with donor retention.
I’m 99 percent in agreement with it. Why not 100 percent?
My blog two weeks ago talked about Millennials—and I still stand by my point that they are coming, they are bigger than any other generation, they will have the greatest spending power because of their size and the nonprofit industry is not really ready to build relationships with them. But, as I’ve said many times, I am absolutely convinced our biggest issue, as an industry, is retention.
In my opinion, donor retention and donor relations are so connected it is hard to know where one starts and the other ends. In fact, I think the overlap is pretty significant. So, why do many fundraisers and marketers get a bit squirmy when we start diving into donor relations?
Wester and her team at DonorRelationsGuru.com often reference the four pillars of donor relations—acknowledgements, reporting, recognition and engagement. If you haven’t spent time on her resources page or reading her blog, you really are missing some great insight and samples of work from around the country.
But, the topic for today’s blog is the connection between donor relations and donor retention. Everyone says he or she is working on donor retention, and, in fact, it is a priority. But I think the problem is that most people think of “donor relations” as the people who answer the customer-service emails and phone calls, and help with the higher-level acknowledgement.
Most organizations prioritize acknowledgement and have a system to make sure complaints and questions are handled. But, the minute you step out of those narrow focus-areas of donor relations it often is met with great resistance. Questions like these seem to make the industry want to stand by its "traditions”:
- Should we communicate differently (less or even more) to improve the donor relationship?
- Would more targeted/customized/personalized communication sent fewer times actually improve the relationship and therefore retention and long-term value?
- Is it really the best for the donor relationship to ask for another gift right after the donor has given one? Does that really help a donor feel appreciated?
- Is it bad that one organization’s request for donations looks exactly like another organization’s request? Do our donors deserve (and need) a different approach?
- Should we be communicating based on how someone gives (i.e., channel preferences)?
The list can go on and on. In my eyes, it is the great debate that continues over and over—and, in fact, I have talked about it over and over in my blogs. But, it seems that the answers never come to the questions in a way that everyone is ready to make change and take action.
Does your organization ask these questions?
If yes, I have some thoughts below for you. If no, you really need to ask yourself why, because you should be asking these questions.
• Should we communicate differently (less or even more) to improve the donor relationship?
Recommendation: If you are a fundraiser, you are measured on the amount of money you raise. Have you determined what every percentage increase in retention brings you in additional net revenue? Have you determined at what point your loss of donors actually outweighs your upgrading of donors and your acquisition efforts? You should not make changes to your marketing plan unless you know what you want to change and why you want to change it. If you want more donors to stick with you, then you should do everything possible to test what works best.
The challenge is that it takes time, because improvements in the relationship that create new retention behaviors take time to impact. But don’t get distracted. Pick the top four things you believe could improve the relationships with your donors (and retention) and create a plan for the year.
If you can ask your donors—more specifically, your lapsed and active donors—do it. If you can’t, there are enough basic donor studies out there to give you a head start on what improvement might look like:
- Feeling more appreciated
- Understanding preferences for channel
- More personalized communication
- Less communication
Some of these might feel painful to think through, so test them and get your answers. But, test correctly.
• Would more targeted/customized/personalized communication sent fewer times actually improve the relationship and therefore retention and long-term value?
Recommendation: If the above bullet was too lengthy, let me be brief and specific with this answer. Testing the number of asks should be done, and it should be measured over a period of time—at least nine to 12 months.
Message testing should not be done on a hunch. This should be informed by what you have heard from your constituents or what they are telling you with their behaviors. If your message testing is just to re-churn through the most popular formats in the industry and/or what’s being used by other organizations, this is not what we are talking about relative to better targeting/personalized messages.
• Is it really the best for the donor relationship to ask for another gift right after the donor has given one? Does that really help a donor feel appreciated?
Recommendation: I’ve been in conversations with consultants where they say, “We know that an out-of-the-blue ‘thank you’ with no ask is the right thing to do.” I’ve also been with people who will cut those thank-yous from a plan because they are a cost with no revenue attached.
If you want to answer this for your organization, test it. Test it immediately. It’s not hard. Create a cohort of new donors and a cohort of renewed donors, and test whether they get a resting period or just keeping getting touches like everyone else. But don’t just measure it over a month or two—give it six months and see what happens. Are you really getting extra gifts? You should answer that question.
• Is it bad that one organization’s request for donations looks exactly like another organization’s request? Do our donors deserve (and need) a different approach?
Recommendation: Gosh, this is such a hard one. If you are a direct-mail donor, you know that the mail you get from multiple organizations often can look similar. I think the most important thing is if your donors can pick you out in their mailboxes versus stacking you up in the piles with all the other mail they get.
If you look like everyone else, do you stand out? How do you stand out in the mail? This is one of the hardest things for every organization, and if your branding is not strong, it can be further complicated.
You have just a few seconds to get someone’s attention with your carrier/outer envelope. Then you have a few more seconds to keep the individual’s attention if he or she opens your envelope. You constantly should be focused on how to make your outer envelope look different than everyone else’s. This can be done with imagery, teasers, questions or, sometimes, nothing.
• Should we be communicating based on how someone gives (i.e., channel preferences)?
Recommendation: The answer seems simple, right? Of course we should be communicating based on someone’s channel preference. But, wait, how do you define preference? Is it because they gave their first gifts a specific way? Their only gifts? Two gifts? Five gifts? This is where theory and reality clash.
If someone gives a gift online once, that does not send up a flag that he or she prefers online giving only. Should you give them chances through other channels? Yes. Should you open up all channels at full pressure to a single-channel donor? No.
My recommendation is that you recognize and dabble. Recognize donors’ channel behaviors by communicating through those channels, but slowly dabble in the other channels—but you must listen. If they do not respond, don’t just keep things on autopilot.
None of this is hard, but it isn’t easy making decisions around things that might impact short-term revenue in pursuit of a longer-term return on investment. You need to go ahead and get over those nerves because, as I said last week, the Millennials really are going to challenge us on all of our comfort zones. Do your testing with today’s donors to start learning as quickly as you can.
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.