We fundraisers love lists. Most are of the “Top Five Steps to Success” variety.

Frankly, I’ve always been more intrigued with the “Top Five Steps NOT to Take”.  Just as someone who’s just learning to ride a bike wouldn’t attempt to mount it wearing a 40-pound backpack or peddle with flat tires, there are several key factors you should be aware of and avoid or change when it comes to donor retention.  I call them retention barriers.

On Wednesday I’ll offer up my list of The Top Five Retention Wins. But today, I want to start with the Top Five Barriers to Retention.

Barrier #1: Silos.  These days everyone touts the glory of the integrated, multi-channel fundraising heaven. So why are so few actually making it through the pearly gates of multi-channel integration to receive its everlasting rewards?  In a word, “silos.”

Any reader who works in an organization with more than one department is familiar with the daily manifestation of silos. The online personnel do little to coordinate with the offline folks. Major gift officers look down on direct mail fundraisers and vice versa. Communications people and fundraisers are seldom on the same page where messaging is concerned.  And everyone ignores the donor service workers.

The result: a fundraising/communications/donor care system that is incapable of reciprocal interaction and reinforcement—a process that drives donors away.

Consistencyis an essential element for building any solid relationship.  And if ever there were an enemy of consistency it’s the silo.

Example:  the direct mail department (silo) brings in a new donor with a powerful message of saving baby seals.  The online department (silo) sends an e-mail thanking the donor for his or her gift but ignores any mention of seals and emphasizes the organization’s work on climate change. A week later the communication department (silo) sends out the organization’s newsletter arrives touting the importance of saving wetlands and completely ignoring the importance and focus on donors.

There’s little chance the new donor will stick around.  At the very moment the organization needs to be building trust with a new donor, it undermines itself with inconsistency.  That’s why for years I’ve urged that in today’s multichannel world organizations identify, and give authority to, a person who’s responsible for assuring consistency across channels.  ( See, Wanted: A Roll of Human Duct Tape.)

Barrier #2:  False Attribution.  We’ll never solve the retention problem until we rid ourselves of the myopic and wrongheaded metrics used to reward success in holding onto donors and increasing their value.

In terms of retention and lifetime value this means assigning performance results to various actions or sources.  As in, which factors (message, donor service, communications, thank-yous, donor recognition) contribute in what proportion to increasing or decreasing the lifetime value of a donor base.

Unfortunately, for too many organizations “attribution” amounts to little more than the annual or semi-annual internal battle over who gets credit for the proceeds from various fundraisingefforts.  As in, “How much did the renewal program bring in?” …” What about the appeals and reinstatement campaigns?’.  Immediate money, not long-term value, is the misplaced metric used too often.

And this is where the problem with retention begins.  When it comes to the metric that matters most—improving lifetime value— the research we did for my book Retention Fundraising shows that the tactics, techniques, or frequency of campaign activity from the fundraising department accounts for less than 20% of the ultimate value of the donor.

“Hooray, the October appeal was gangbusters, guess our great RFM segmentation was the reason for its success.”  By overvaluing single campaigns and attributing results in a campaign-by-campaign transactional approach we discount or ignore important ongoing activities that add real and lasting value –proper thank-you and welcome programs, donor-focused newsletters, extraordinary donor service.

Did not the well-constructed and timely thank-you letter to donors who responded to the appeal preceding campaign X have no impact on these donors’ subsequent decision to give to campaign X?

And always, campaign-oriented fundraisers fail to ask, “What about the massive number of non-responders to campaign X?  What if the message used actually hurt retention and subsequent giving?  Shouldn’t the fundraising team, always clamoring for credit, receive a negative attribution for harming retention and lifetime value?

Barrier #3.  Lack of Differentiation.  Apart from those who die and those whose incomes shrink dramatically; defecting donors don’t simply retire from giving.  They give to something else –and usually that ‘something’ is in the same sector. Remember: in study after study we’ve seen that 1/3 of all donors who leave –1 out of 3—hit the exit because they find other organizations more deserving.

When you fail to differentiate your organization as the best vehicle for meeting the donor’s aspirations—in other words, when you don’t appear much different from the competition—you’ve entered the Sea of Sameness where, with the exception of the name, your organization is indistinguishable from the others. And donors who can’t distinguish one group from another aren’t especially committed.  They’ll easily switch their giving.

Given the plethora of mailing list exchanges, cooperative donor data banks, and look-alike direct mail packages and emails focusing on technique rather than message and mission is there any wonder so many donors move from one organization to the next?

I can guarantee that as long as copycat fundraisers continue to order up yet more certificates of appreciation, plush toys, sets of labels, never-ending matching gift challenges—you name it—while ignoring “dull” but fundamental actions such as top donor service, seeking donor identity, preferences and feedback, and providing distinctive messaging there’s little reason for donors to stick around.

Barrier #4: Premiums and Tchotchkes.  It may take a while, but most fundraisers who’ve been at it long enough come to realize that over-reliance on tchotchkes, baubles and other gifts to boost acquisition response rates is a long-term prescription for poor retention and reduced lifetime value.

There’s behavioral science research to back this up. Controlled experiments have determined that extrinsic rewards (premiums) activate the same part of the brain and the same chemical (dopamine) as does cocaine.  When donors ae offered a premium, their focus changes to the self-interested question of what’s in for them rather than the benefit that springs from altruism.  This is why the hoped-for conversion from a premium donor to “normal” donor is so difficult to achieve.

Does this mean you should forgo all premiums and gifts?  Absolutely not!  Some organizations successfully use “lite” premiums such as address labels and note cards (as opposed to watches, umbrellas, stuffed animals) in acquisition mailings, but never use them again once the donor is on board.

A good strategy for building commitment and retention among your existingdonors is to occasionally offer a gift directly linked to your mission or program.  Photos from the field…a book authored by a staff member or donor…a photocopied and stapled stack of news clips.

Don’t tie your gift to a request for funds.  Surprise donors with these sorts of goodies as a thank-you for their support; on the anniversary of their becoming a donor, in celebration of a particular victory their generosity helped make possible. This sort of “premium” or gift will serve as a reminder of the donor’s important role.

Barrier #5.  Chasing the Unicorn.  Many organizations and their boards—especially in this age of dramatically escalating use of social media—are obsessed with chasing the types of donors they don’t have, using channels that are far less productive than proven channels like direct mail.  Always they yearn for “younger” …” more engaged” …and “active.”  Anything but what they imagine the current donors to be—staid, not-with-it 50 to 80-year-olds

More often than not this fixation on the “new” serves as the rationale for the suicidal tendency to seek out a “brand expert.”  After all, he or she will help figure out what look-feel, message will best appeal to this imaginary group.  This imaginary group of new ones are unicorns.  Beautiful, but mythical creatures.

Improving retention rates starts at the beginning –the new donor acquisition process—and the focus on the quality rather than the quantity of new donors.

Even though 20-somethings or 30-somethings are unlikely to respond to direct mail the same way a 60 or 70-year-old does, it’s essential to understand that the basic characteristics of a high-quality, committed donor don’t depend on age and don’t depend on the particular channel of communication. (The myth that younger people don’t respond to direct mail is simply not true.)

A better, more valuable approach to finding and acquiring higher quality donors is to build a profile of your organization’s most committed (high-retention, high-value donors and use that profile as a screen for filtering and identifying potential new donors.

The profile I’m suggesting differs from the usual donor profile found in cooperative databases or most look-alike models in that it differentiates the characteristics of lower-value donors from those of higher-value ones.  Ask your list broker or the owners of donor lists you deal with to:

• Eliminate the lapsed donors of other organizations.
• If possible, select prospects who have been donors to other organizations for two years or more.
• Request prospects who have contributed a minimum of $25 or more in single gifts to other organizations.
• Avoid donors acquired primarily with the use of premiums.

Because a request like this is out of the ordinary, the business-as-usual, volume-oriented crowd will offer countless reasons why it can’t or shouldn’t be done.

Persist in focusing and overcoming these Five Top Barriers and you’ll see the retention payoff.

Roger

P.S.  Up next on Wednesday:  Top Five Retention Wins  Easy and inexpensive actions any organization can take to boost retention.