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How To Turn Donors Into Life-Long Friends

“Never love anyone who treats you like you’re ordinary.”

We’re sure when Oscar Wilde wrote that, he wasn’t referring to a donor retention journey. And yet, it resonates so much – if you don’t care about your donors, how are they supposed to care about you?

Lately, the term ‘donor retention’ has been a hot topic of conversation among fundraisers. The focus, you may have noticed, has shifted recently from acquisition strategies to retention strategies. A renaissance of sorts, and for very good reason:

 Donor retention is kind of a big deal

Finding new donors is hard. It’s also more expensive than ever. That’s because the donor pool is shrinking. On top of this, up to 60% of new donors never give again; that’s a huge loss on investment for many organisations, and a very bleak future indeed.

But we have good news for you, too!

The real benefit from acquisition comes when a donor continues to give, again and again. We’re not saying that acquisition isn’t an important part of your fundraising mix. It is. But to have highly engaged donors you must have a plan to keep both new and existing donors for the long haul.

 


 

The ladder of loyalty

The first customer retention programs started way back in the 1700s. American retailers would hand out copper tokens to customers with their purchases, which they could redeem for products on future purchases. It’s a strategy that would remain popular throughout the 19th Century, paving the way for the loyalty programs we know today.

Loyalty programs have always been about moving customers along the ‘loyalty ladder’. A donor journey is no different.

 

Here’s how it works:

You identify a series of stages that your average donor will progress through during your relationship. A ‘journey’ is then mapped out to maximise engagement opportunities and move donors along the infamous ladder of loyalty.

 

A typical loyalty ladder will look something like this:

NEW DONOR  >>  WARM DONOR  >>  REGULAR DONOR  >>  MID VALUE  >>  HIGH VALUE  >>  BEQUEST/ADVOCATE

 

Of course, not every donor will end up a leaving a bequest to your organisation. The key, however, is to treat them as though they might.

As fundraisers, we put a lot of effort into a donor’s first gift. But as you can see from the ladder above, a first gift is not the endgame. When a donor first supports your cause the relationship starts. It may ebb and flow over the years, heat up or go cold. However it evolves is completely up to you.

 

Friends with benefits

Good donor retention has a number of positive side effects. For a start, you’ll enjoy reliable income year to year. You’ll also be able to set reasonable fundraising budgets, thanks to your solid understanding of the number of donors you need to acquire.

Let’s take a closer look:

Say you raised $400,000 on your last warm tax appeal, and this year you need to raise $500,000. If you were able to retain all of your donors (unlikely, but just roll with it for argument’s sake) from the previous year, you may only need to raise $100,000 in new donations. But, if you have high donor churn, you’ll need to spend a lot of effort, time and money to raise more in new donations.

I have a retention problem. Or do I?

Here’s the scenario: you’ve done the hard yards and worked out a fantastic, sustainable retention strategy. Problem is, you’re still losing an alarming number of donors every appeal. How come?

This may have more to do with whom you’re attracting, rather than how you’re retaining. Keep in mind that no matter how brilliant your donor journey, you can never expect a 100% retention rate because it’s impossible to always attract the right donors for your cause.

So if you think you have a retention problem, it might pay to stand back and look at your acquisition strategy. If your retention rates are low then maybe you have an acquisition problem instead.

Profile like a pro

Traditional acquisition premium direct mail packs may lift response rate and average gift but analysis on these packs over the past five years is showing something else: these donors don’t give again because it wasn’t the cause they connected with – it was the tote bag! When the next ask arrives and there is no high-end premium included, they simply won’t be interested.

The best way to get around this is to profile the donors already engaged with your cause. Find out who they are, then make a plan to acquire more like them. The goal is to attract the donors who understand your cause and feel some kind of connection. In turn, they will be the advocates and strong supporters helping you deliver your mission.

Look who’s leaving and track the churn

It’s just as important to understand why donors leave, as to why they stay. How many donors are you losing each month? Why are they ending their relationship with you?

Tracking donor churn can help you understand if your retention plan is effective (if the number goes down) or needs tweaking (if the number goes up). The purpose of tracking churn is to understand when your donors leave so you can adjust your donor retention plan accordingly.

Analysing churn rates by donor segment highlights donors who are at-risk and require an intervention. An intervention may be an impact report card, a phone call, an invitation to an event, a donor survey to hear how they are feeling, a tour, a meet and greet, or a simple birthday card. Churn analysis is a simple metric that tells us a lot about when and how to interact with donors.

So don’t give up on your donor retention plan or assume it isn’t working. Instead, look closely at your donor churn rate. The more you understand how and why donors leave, the better your insights into what’s working and what needs to be changed.

 


Heed the wisdom of Oscar Wilde

Love your donors, and they’ll love you back. Be inspired by your cause and share that passion in an interesting and respectful way. If you don’t, we guarantee someone else will snap them up.

 


 

Finally, remember these key points:
  • Retention is a cost-effective way to keep hold of new donors and ensure they continue to give, year after year.
  • With a solid strategy, you can budget for future campaigns with confidence.
  • Donor churn forces you to look at retention from another angle, and is incredibly helpful to identify where donors drop off and why.

 

We’d love to hear from you! Let us know what you think below.

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