Everything That Is Wrong With Our Retention Programs and How to Put Them Right
Is anyone's loyalty program actually working (and, just to clarify, I'm using the more traditional definition of "working" as you used to lose loads of donors but now you don't)?
I've never met anyone who could answer "yes." But that doesn't stop us squandering enormous amounts of time, energy and money on this entirely unproven "best" practice. I know several fundraising directors who know for sure retention got worse after they introduced their loyalty programs. But they continue to run them. It would be funny if it wasn't tragic.
No one has been able to provide a shred of hard evidence that these programs make any long-term difference. Yet collectively we squander millions of donated money into them while continuing to lose anywhere from 60 percent to 90percent+ of our newly acquired donor's year on year. The only people for whom these costly programs work are the agencies and consultants selling them!
You can't go to a conference or read a blog without being preached to about how important it is to say "thank you" and show outcomes. And of course that's true. But when did these things become separate and apart from fundraising? When did we tell ourselves that asking for money equated to fund raising and that saying thank you for the money equated to fund maintenance? If you are working with that formula you are doing neither well.
So what's the alternative?
Getting past the overly simplistic view that loyalty can be built in a day and realizing it has to be built day by day. Understanding that loyalty isn't created as the result of the "loyalty" experience you offer, but rather is a result of a donors' attitude toward the sum total of experiences they have with you.
Think of the enormous volume of experiences, or touchpoints, your organization creates, not just in fundraising but across every department. Every single thing you deliver, tangible or intangible, creates an attitude which in turn has an effect on loyalty. The trouble is you have no way of knowing whether it's having a good effect or a bad one. Of course you can say appeal X did better than appeal Y. But can you say how appeal X influenced attitudes toward appeal Y?
And that's just in the microcosm of one campaign to the next. What happens when you throw everything else that the rest of your organization does into the mix, things that have no direct value attached? Your magazine for example, does it help or harm? Most charities have one. Most ask for money. Most make a big financial loss. To your CFO it's a red number that needs to be ditched. But many fundraisers believe it adds value; that donors appreciate it, and that in turn it positively influences attitudes toward future giving. But they have no way of knowing.
But now they can, thanks to a remarkable study conducted by Kevin Schulman and Roger Craver into what precisely makes a committed donor. Their study was carried out across 250+ organizations around the world.
They've deconstructed precisely why what we're doing right now isn't working and shown us how to put it right. You'll see how every experience and touchpoint you create, today, can be viewed through the lens of a commitment model and given a precise financial value. In other words, you'll be able to see which, of all the experiences you create, matter and are causal of loyalty and which don't and aren't. From there you'll be able to create a donor-led strategic blueprint, of the current world you serve up, telling you exactly what needs to be kept, fixed, scaled or ditched.
Take a moment to let that last sentence sink in ...
Today you're spending an enormous amount of time, energy and money to deliver a huge range of experiences. Some matter and some don't, but you don't know which are which. From now on you can. From now on poor performance, value and retention are not facts of life but choices to pursue broken "best" practices instead of proven better ones.
Charlie Hulme is managing director of DonorVoice. Part of the team that conducted the sector’s only empirical and applied study into donor loyalty. Today, he works with charity partners to radically alter the donor's experience and subsequent lifetime value.