Defecting Donors Don’t Disappear … They Switch
I hate to pile on … but I will. A couple of days ago Roger wrote about the high attrition cost of poor customer service, suggesting that the same applied to poor donor services. Here’s another study on the subject; this one from consulting firm Accenture.
Their study, across 32 countries, Accenture Global Consumer Pulse, asked consumers to assess their experiences with a number of companies in ten industries.
Accenture says that customer switching due to poor service cost the ‘losing’ companies $1.3 trillion. The highest switching rates were found amongst retailers, cable and satellite providers, and retail banks.
What is poor service? 91% of customers said they were frustrated by having to contact a company several times to address the same issue. Nine out of 10 respondents also complained that they were put on hold for long periods of time or had to deal with several service reps to resolve a single issue. Only 18% of customers agreed their providers offered them tailored experiences. Some 58% said they are frustrated with inconsistent experiences from channel to channel.
The kicker? 82% said their service provider could have done something to prevent them switching.
Reviewing all this, I had a minor epiphany.
With all the work and writing Roger and I have done on donor retention, I had never actually thought about lost donors as switchers. I never focused on that … they just ‘went away’.
But now I’m thinking … apart from those that literally die and those whose incomes shrink, your defecting donors don’t simply retire from charitable giving … they most likely give to someone else … and (just a hypothesis) someone else in the same sector! They don’t switch from cancer research to Greenpeace.
So, if you really want to get motivated to improve your donor retention efforts, think about that. Not only is your organization not getting those defectors’ contributions … your competition is. Your old girlfriend/boyfriend is now dating your best friend.
How’s that for rubbing salt in the wound?!
Tom
4 responses to “Defecting Donors Don’t Disappear … They Switch”
Behavioral Science Q & A
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Interesting question. I had a quick look at the testing done on this topic. On the positive side, in all cases, over half of donors decide to cover the fee. In some cases, it goes as high as 65%. Not a negligible percentage at all. Here’s another test from iRaiser showing consistent results (see point […]
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I’m not an expert in this but a quick search surfaced this article on the effect of tax reforms on 2019’s charitable giving. The researchers didn’t find a reduction. Actually, they observed an “increase in charitable contributions in 2019, even with the lower tax rates and the dramatically smaller number of taxpayers who itemize their […]
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Yes, yes! Switchers. I’ve been saying that for years in my work. It’s way past time that fundraisers, CEOs, boards – the entire organization – understand that donors are giving THROUGH an organization to achieve their own aspirations, to fulfill their own values and desires.
It’s critical to remember that there is practically no totally unique organization. If my desire is to help at risk kids, I can give THROUGH boys and girls clubs, Ys, faith groups that work with youth, etc. etc.
Donors aren’t leaving behind their aspirations, values and desires. Donors are just leaving YOU, a particular organization. Do the loyalty stuff badly and your donors will just give THROUGH another organization.
Good point.
Welcome to 2002!!
Terrific post. Will tweet to my followers. Can I use the chart in my presentation on retention. It says so much. ” 82% said their service provider could have done something to prevent them switching.” Wow.