Dangerous Myth #1: Too Much Solicitation Causes Poor Retention
In the run-up to last year’s winter holidays I posted Don’t Eat the Poinsettia as an appropriate reminder that in fundraising — as in life — there are many myths we take for gospel.
Some false or untrue myths like “Don’t swallow your gum; it stays in your stomach for seven years”, or “Don’t sit too close to the TV, you’ll hurt your eyes”, or “Don’t crack your knuckles, you’ll get arthritis” are harmless, even if adhered to religiously.
But when it comes to fundraising there are some myths that are not only untrue, but if put into practice will prove damaging to your fundraising.
So, I’ve decided to mount a mini-crusade against those myths I consider the most dangerous — beginning with …
Dangerous Myth #1: Too Much Solicitation Causes Poor Retention.
Bottomline: Across a range of studies on donors to 250+ nonprofits in the U.S. and the U.K. conducted by our colleagues at DonorVoice over the past four years, there is absolutely no evidence that frequency of solicitation negatively impacts retention and lifetime value. Period.
I know that some consultants, boards, CEOs and, heaven forbid, even some fundraisers love to engage in the navel-gazing exercise jargonistically labeled ‘cadence’ — the frequency and timing of appeals and other communications touches to donors.
While such exercises may make for interesting fodder at a board meeting or a staff bull session, they are worthless when it comes to raising money. In the end, any fundraiser worth his or her salt will tell you that more mailings on the house file equals more net revenue.
For an excellent discussion on this subject listen to Jeff Brooks’ Future Fundraising Now podcast here.
So, I was more than a little troubled when last month I came across a post by Penelope Burk, of Cygnus Research, claiming:
“Over-soliciting and insisting on unrestricted gifts are largely why 65% of donors who make a first gift never make a second and why 90% or more of donors who start giving are gone within five subsequent appeals.”
I can’t think of a more inaccurate claim or conclusion. Or one more potentially damaging to your bottom line if you blindly follow it. Penelope’s claim contradicts virtually all of the retention research by the field’s two experts — Adrian Sargeant and Kevin Schulman. See also Agitator’s Why Donors Drop Out.
I’m not sure how Penelope arrived at her conclusions. I could find no evidence in her post or in the executive summary of The 2013 Burk Donor Survey to back up her claims. Nor is there any evidence in any other research I’ve seen elsewhere that indicates either the frequency of appeals or the donor’s inability to designate their gift makes a whit’s worth of difference in retention.
What I can report is that Penelope’s methodology did draw a rebuke or at least some raised eyebrows from the retention researchers over at DonorVoice. You can read those here.
Tom and I follow retention trends and retention research like hawks on the hunt. When it comes to frequency of communications and appeals, here are the facts versus myth as we see them:
- The frequency of ‘touches’ or contacts is not a driver of donor relationship strength and retention rates. What this means is that sending more or less within the frequency ranges in the industry today, does not negatively OR positively impact relationship strength or value.
- We hypothesize, but have not seen proof, that extreme frequency on either end — sending 100 solicitations or just 1 — will negatively impact relationship, retention and value.
- Fundraisers can argue correctly that if they solicit less they raise less. That fact is often based on a short-term financial snapshot that places a premium on ‘now’ vs. future.
- The larger question is whether sending a ton of stuff out now negatively impacts LTV and retention rates long term. The work we’ve seen over at DonorVoice has shown this is not the case.
- The relationship between ‘frequency of ask’ (or ‘cadence’) and relationship strength/retention is not linear. This means at some point, beyond the range of solicitation frequency seen in the nonprofit sector today (generally between 6 and 24 times a year), it can or will have a negative impact.
- The corollary to this is having too few touches — just a single appeal as an extreme example — will prove detrimental to relationship strength, retention and value.
In short: Do not set out to build a donor/supporter journey plan that is different than whatever you’re currently doing if you’re using number of touches or appeals as the primary or even secondary criterion for what you think should be ‘in’ or ‘out’ in the plan. Doing so will not move the needle — one way or the other — on retention.
What’s your experience on frequency?
Roger
P.S. This is my first post since taking a few weeks’ leave to enjoy the great customer (donor) service of the Cleveland Clinic for a hip replacement. My thanks to Tom for doing double duty.
P.P.S. And please send along your candidates for ‘Dangerous Myths’ you’d like exploded.
23 responses to “Dangerous Myth #1: Too Much Solicitation Causes Poor Retention”
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I’m so happy to see this post. I’ve admired Burk’s research and donor-centered approach for a long time. Attending her seminar and reading her first book truly altered my approach to fundraising.
I’m diligent in providing acknowledgements that are (1) prompt, (2) personal, and (3) centered on letting the donor know the impact of their gift. And, I always provide the donor with some additional information about their gift’s impact before I ask again. But…
I do ask again. And part of my total approach to fundraising has included counseling folks that, regardless of a few random complaints that “you send us too many fundraising requests”, charities that solicit more get more money. That much is clear, no matter what board members may believe to the contrary.
So I was dismayed when I read this new research as I believed Burk to have a good research discipline. You and the folks at Donor Voice have taken the blinders off, which is encouraging. Here’s the part I most like in The Donor Voice article:
“Identify the experiences and touchpoints (via modeling and a framework guided by how your world works) that matter to loyalty and retention and by extension those that do not and build a new supporter journey that drops unimportant touches, increases those that work and fixes those that matter but are “broken”.
Thank you.
Yippee. Myth busting. There are so many myths everywhere – including in fundraising. Too often, people blindly follow “commonly-accepted wisdom” – to their detriment. Thanks, Roger and the Agitator.
As usual a thoughtfully argued piece. As a fundraising practitioner turned academic and researcher I have to agree that the is little evidence to suggest that an increased frequency of APPROPRIATE solicitation does little to impact retention but I fear that we are approaching a paradigm shift. I also observe that there is not such thing so donor fatigue, only people tired of being asked inappropriately by charities they never would support. Communications need to be balanced, timely and appropriate.
The impending change is, I believe, (Maple & Branchu 2012) that the huge cohort of baby boomers are giving differently and whilst they may continue to support their favourite causes in their lifetimes they are far more likely to exclude those same causes from their wills if they feel that their views have not been heard.
So I would caution fundraisers looking to increase revenue now by more solicitations, without very carefully testing and retesting the impacts on their legacy propositions.
Tremendous post!
As a kid my favorite myth was the one where you would roll your eyes and they would stay that way when the clock struck 12.
or of course the myth of ” eat your carrots and you’ll have great eyesight!”
glad we’re making these myths go away. I work with so many small organizations who worry about this. They think two appeals a year is too much! Thank you for sharing!
Welcome back Roger! I just had the pleasure of speaking at the same NPO conference in Idaho last week with Penelope. The results of the research and the possible 90% attrition were mentioned and well received. During her talk it struck me to worry about research based upon outright question surveys. I know there is a place for both types of research. Being a database maven, I tend to lean much more to the data from databases.
When the groundbreaking results on donor retention were released by the Fundraising Effectiveness Project, which were based upon actual summary data from thousands of donor databases, the truth on retention rang out clear. It was bad and getting worse.
One of my wonderful mentors in the sector is Chuck Longfield. When I worked alongside of him at Target Software, he was quite proud of his indexes being based upon actual database data. No accidental faking or opinions were allowed to enter in.
May the debate rage on, which is always a good thing to stimulate best practices and better fundraising results!
Jay,
Hi, I hope all is well. It is important to note that the problem with the Burk data is not that it is attitudinal in nature. It is the methodology, namely, as you point out, asking certain questions directly that yield unreliable answers. (Note: not all attitudinal data collected via direct questioning is unreliable).
However, one cannot maximize retention and loyalty without attitudinal data and to further bury the false choice of transactional vs. attitudinal, one cannot build models to identify cause and effect – i.e. what does the organization do that causes loyalty and by extension, retention? – without combining attitudinal data (the right kind) and transactional.
One can get bad answers by only looking at one or the other and by misusing (or “mis-collecting” in the attitudinal case) either (or both).
The real tragedy is that getting the right answer to the most important question – how to increase retention – doesn’t cost more than getting the bad answers.
I think Penelope’s comment is taken out of context. I’ve read her book and attended her seminar. I understood her to mean that you will “over-solicit” if you don’t first say thank, report how the money is being used, and ask again for a good reason. And, of course, what donors say they will do and what they do are two different things. Her research was on what donors said they would do…and, only focused on major donors, not all donors. Thanks for the post!
I’m all for asking early and often! BUT I am also a strong believer in Penelope Burk’s work. Here’s my take: I wonder if we are not talking about two different types of donors.
Penelope’s research focuses largely on major donors, as far as I know. Most of the research from donor files is based more on smaller donors, I believe, who would be solicited far more often – and successfully – than major donors.
Clearly from a major gift donor perspective, you’d take care not to make your donor feel over solicited. You’d be shooting yourself in the foot. You are always customizing your solicitations very carefully for that type of donor.
I’d be interested to know if my hypothesis about major donors vs smaller donors is correct!
I have to say that I’m confused by this post. These two statements seem to be in conflict with each other:
“The frequency of ‘touches’ or contacts is not a driver of donor relationship strength and retention rates.”
“The relationship between ‘frequency of ask’ (or ‘cadence’) and relationship strength/retention is not linear. This means at some point…it can or will have a negative impact.”
What am I missing here?
And how does this “myth busting” fit with your “I Can’t Get Enough Fundraising Emails” post that disparaged sending email fundraising appeals too frequently? If frequency doesn’t affect retention or value, then why should fundraisers care if we bombard our donors’ inboxes with appeals every day?
I love it whenever you guys take on the over solicitation issue. Under solicitation is clearly a much bigger problem, especially for small shops. I once had a group call me for help with an acquisition package to mail to their professional association members. Odds were good they would attract some donors since the folks were very committed. But they absolutely insisted that once the members responded by giving a donation, they would stick with their rule of only mailing one appeal every year. I told them not to waste their money on the acquisition.
That said, I will also add that I attended a Burk workshop a few years back where she talked about over solicitation but from a different perspective. I will quote loosely from memory.
“When you ask donors why they stop giving to an organization they have supported, the #1 answer is over solicitation. But, when you probe further and ask them what over solicitation means, they say, “you asked me for another gift before you told me what you did with the last one.” In this way, we can see that over solicitation is actually about under communicating with your donors.”
This gets to the question of whether we’re cutting back on our newsletters and other stewardship efforts (which most organizations struggle to keep in their budgets). In this context, I think she’s onto something.
Heather, your question is a very good one and appears to catch a typo of sorts.
Here is what we know:
1) there is no math based relationship between frequency of asks and relationship strength or loyalty.
2) there is a relationship as many a fundraiser can attest between frequency of ask and financial value. More asking yields more revenue.
3) the question often not addressed with short-term fundraising metrics is whether asking a lot wins the battle (e.g. short term revenue) only to lose the war (e.g. negative impact on retention and LTV)
4) our answer is no. The Burk claim is exactly the opposite. if there is a subtext to this claim – as Kathy Swayze suggests – then the Burk headline needs radical changing because it does not state this and can lead many charities to the wrong conclusion. In fact, if her subtext is what Kathy suggests than empirically one could show there is NO relationship between freq and value/decision to stay or go if the other elements of the donor experience are accounting for (which is what we do in a model).
5) The comment about “non linear” meant to suggest that the relationship between financial value and frequency is likely non-linear. This means one gets more bang for buck increasing from lower frequencies (e.g. 4 to 8) than from higher (e.g. 24 to 28). It it also possible the positive slope could turn negative if one were to go beyond the normal ranges seen in the sector (e.g. 8 to 1 or 30 to 100)
6) in a similar way there is no relationship (linear or otherwise) between frequency of ask and relationship strength/loyalty WITHIN the ranges we’ve seen as “normal” in the industry. One can hypothesize that this might change if a charity were to go to one extreme or another on frequency.
Kevin,
Thanks for your clarifying response, especially number 5 on your list. Very helpful.
Thanks, Roger. All the analysis that I have done totally supports what you say.
Kevin’s comments really clarified this for me.
As a non-profit mailer who first tip-toed over the edge of the norm in frequency of appeals 5 years ago and is now pretty far out there, the “winning the battle but losing the war” question has always nagged at me, and we struggled to find an accurate way to measure it, especially without intentionally losing a bunch of battles.
I am (somewhat) reassured that we should look harder at message and cultivation as the cure for retention problems.
Reading how the metrics are arrived at in the FES the following is correct.
1. There is no data in the Fundraising Effectiveness Survey that measures donor retention. Renewals are measured and recaptured donors. Retention is measured via understanding time on books not single year renewals. This short term thinking is part of the reason retention actually is so low. Not sure how you address what isn’t yet seen.
2. Without knowing how you collected your data or how you are defining volume of solicitation it is impossible to have faith in your conclusion.
3.
Jay,
You’re correct that donor retention is not a metric in the FEP annual reports. Actually, the word “retention” only appears once in the entire document. And, “donor retention” does not appear.
I drew on http://www.afpnet.org/FEP and review the FEP Donor Retention Supplement where the authors focus primarily on donor retention. http://www.afpnet.org/files/ContentDocuments/FEP2011ReportSupplement-11-18-11.pdf
Rather than “retention”, the FEP has focused on “attrition” as a key metric. It’s the FEP donor “losses” ratio — along with the donor “gains” ratio. Attrition is the reciprocal of retention. Jay Love/Adrian Sargeant at Bloomerang and The Agitator are promoting improving retention as a key way to increase results while the FEP has been promoting reducing attrition or losses (from lapsed donors) — as well as increasing gains (from new and recaptured) donors.
The FEP gain/loss concept is presented as “For every 100 donors gained, 105 donors are lost” (attrition) This analysis cannot use the retention metric — it combines the gains (how about introducing the term acquisition?) with losses (attrition).
The folks who prepare the FEP very much want to include more on retention metrics and we’ve begun discussions on that. You might also want to take a look at the 2013 FEP report http://www.afpnet.org/Audiences/ReportsResearchDetail.cfm?ItemNumber=3113
Roger
Roger,
The retention supplement you reference does not measure retention. How are you defining retention? In Mr Sargeant’s work I have seen measures of renewals or measuring retention as a percentage. That isn’t logical in trying to measure the customer momentum being created by strategy.
If Penelope Burke is hurting the industry by stating that over solicitation is a negative, then equally as harmful is the suggestion that understanding retention is related to a short term metric.
I applaud your effort to get focus on this topic.
The premise of this article may be true “for many donors,” but neglects to specify that. Pretending you can’t oversolicit (or that “nobody” really minds) is absurd and irresponsible. Oversoliciting may not bother ninety-five percent of your donors, but you are ~really~ pissing off the other five!
I will NEVER donate to any cause that contacts me more than two different times in a single year. THAT INCLUDES PHONE CALLS. Near year-end, I sort and respond to all solicitations from the previous twelve months. If any THIRD touch arrived from one source, ALL materials from that source go in the recycling bin, unopened. I will NOT condone that misuse of my gifts (or, in the case of paper mail, the creation of that amount of trash).
I’ve asked repeatedly and fervently for many to take me OFF their lists — call lists especially. Some can’t (or won’t) respect my request. One alma mater of mine seems utterly clueless and abusive in this regard. As a result, in three decades I have never sent them a dollar.
I’ve given a great deal (mid six figures, and thousands of hours) to a variety of non-profits over the years. Every one of them had the good sense NOT to contact me more than twice per year. Any who solicit me repeatedly, per the advice in this column, will get ZERO.
If you haven’t asked — or won’t respect — which of your contacts may share my feelings, you are actively driving us away from your cause.
Jay, how do you, or would you define donor retention?
The Fundraising Effectiveness Project definition is the “overall donor retention rate = all of last year‘s donors who gave again this year as a percentage of all of last year‘s donors” from page 13 of the 2011 FEP Donor Retention Supplement, downloadable at: http://www.afpnet.org/files/ContentDocuments/FEP2011ReportSupplement-11-18-11.pdf. You will also find a lot more retention related definitions, descriptions and clarifications in the FEP supplement.
Hey Bill,
The ONLY way to actually define retention is to actually measure retention. Let’s start with the simple dictionary def.
1. The act of retaining
Retention is about time, not next year. Let’s imagine that one key ingredient to increase lifetime value is to increase the part of your life you support us. Can you imagine knowing what the ave length of time you kept a donor on the books 10 years ago and then also know what the ave time is now. With just those two numbers you could quickly see the impact of every strategy and communication model you implemented.
Measuring retention as a % of last year coming forward accomplishes very little in having real impact on donor retention. More importantly it is completely the wrong question and takes people’s eye off the really matters.
A “lifetime value” indicator –> “Average time a donor stays on the books”
Makes sense. We’ll see if we can measure it using the new FEP gift-transaction database.
Thanks and stay tuned.
Roger, you asked for additional dangerous myths.
One major fundraising cost Myth: “Direct mail fundraising is inefficient and expensive” when direct mail fundraising has always been, and still is the most cost efficient and inexpensive method of solicitation on the basis of cost per solicitation (except lately for solicitation by email).
Fundraising solicitation cost efficiency = cost per solicitation, not cost per dollar raised!
A charity can mail an appeal to 100,000 people for as little as 50 cents per solicitation. Telemarketing is more expensive and can cost $5 to $10 or more per solicitation. Major gift solicitation, on the other hand, is very expensive. Members of the Fundraising Effectiveness Project (FEP) team estimate today that the minimum budget per major gift solicitation would be $250 for a $5,000 prospect. Compare direct mail’s $0.50 cost per solicitation to major gift’s $250.00 cost per solicitation. Which is less cost efficient? Which is more expensive?
More importantly, which gives the under $100 donor an inexpensive way to participate in philanthropy?
An analysis making the case against this myth was formally presented to state charity officials and charity watchdogs going way back to 1978. This analysis, “Illustrative fund-raising cost-effectiveness comparison by type of fund-raising activity,” was later published in 1981 (Table 2, The Average Gift Size Factor, Philanthropy Monthly, July/August 1981). A copy of this article is available on the Urban Institute website at http://nccsdataweb.urban.org/PubApps/levis/gift_f.html. The original table has been published several times since 1981 and can still be found in print today in “Regulation of Fundraising Costs,” page 95,The Law of Fundraising, Fourth Edition, Bruce Hopkins, 2009, Wiley.
Unfortunately, this myth persists today.
Bill,
You won’t be able to. If you would like to let me know I would be happy to assist. Traditional tools and methodologies were not designed to measure much else but transactions. Best j