Here are some results of a study regarding customer loyalty completed by the customer data powerhouse, Acxiom.

This study is well worth a read. Acxiom was surveying corporate marketers, but the case made regarding customer retention and how to build it applies 100% to fundraisers, and the refrain is the same as we all hear in the nonprofit sector … there’s a lot more talk than action. Some findings:

• The vast majority (84.5%) use customer retention marketing strategies. Barely half (48.8%) believe their strategies are working.
• Less than half (49.6%) know their best, most loyal customers.
• 60% spend less than 20% of their marketing budget on retention.
• The biggest impediments to collecting customer insight are budget limitations (52.2%), lack of IT support (48.9%) and lack of the right tools (47.8%).
• The numbers are similar between those who do (41.3%) and those who do not (43.5%) aggregate data in order to form insights that capture a holistic view of their customer; the remainder (15.2%) were unsure.

The report cites data on the value of retention that The Agitator hopes you’ve heard before, internalized and are acting upon:

“Bain Consulting found the average company loses 20-40% of its customers every year. Reducing customer attrition by a mere 5% can improve a business’s bottom line profits by 25-85%. Similarly, increasing customer loyalty by 1% is equivalent to reducing costs by 10%.”

In the commercial sector, Axciom says it is not customer satisfaction or participation in reward programs that drive customer loyalty, but rather true interactive dialogue, which then enables marketing efforts that are based upon actionable ‘voice of the customer’ insights. Axciom, like The Agitator, chides marketers for studying customer (donor) defection after the fact, noting that predictive analysis can indeed differentiate potential defectors from those with commitment.

Within the Agitator family, we focus on donor ‘commitment’ as the driver of retention. If you want to see how donor commitment and retention can be analyzed and influenced, visit our colleagues at DonorVoice.

Tom