Consider the term, Key Performance Indicator.  The first two words are great – “key” connotes importance and an answer at the same time and it modifies a word that is very positive.  The “indicator” word is the real weak link.

We should not tolerate an indicator that merely points to a problem and yet offers no prescriptive remedy AND zero indication of future direction.  Year over year retention rates as a KPI for retention, aside from being tautological, offer neither a prescription nor a projection.   A behavior based model that identifies the percentage of donors on your file likely to respond to your next appeal is certainly a forecast but still offers ZERO insight on what to do to get more people with “good” model scores.

Your organization should want more.

KPIs are, too often, a crutch. The term is overused, describing any form of measurement data, and overprescribed by measuring and reporting on everything that is easy to measure and count.  KPIs exist to reduce the complexity of organizational performance not confound it.

Consider a personal example we can all relate too – cholesterol level as an indicator of heart health.  This is, by our definition, a good KPI.  It is a good indicator of heart health and the projection is quite clear, keep it in the high range for too long and you are very likely to suffer a heart attack.  As importantly, we know the causes of high cholesterol and have very specific remedies from diet to medication.

Well done cholesterol test.  One, admittedly self-serving example, that is a little closer to home is our measure of Donor Commitment for Retention.  A commitment score for an individual donor, a segment or the whole file measures/indicates the:

1)      Strength of the donor relationship so it serves as a point in time temperature reading

2)      Likelihood retention so it is very predictive of what will happen.

3)      Is highly prescriptive since what you can do to increase Commitment is easily determined and,

Your organization probably needs fewer, more meaningful KPI’s.  Why not demand more for the few that are left (or should be left) standing?  Why not require them to be as good as the cholesterol test,

1)      Indicators of strength or weakness (the easy part)

2)      Forecasts (harder)

3)      Prescriptive (hardest but mandatory).

A sub-point on the prescriptive requirement; to get this right requires understand cause and effect.  In the case of retention, it is not caused by the mechanics of the mail program, namely frequency of appeals.  It is certainly true that not mailing (or not asking) will crush retention but to be a true CAUSE it must work both ways.  If this were a TRUE CAUSE then retention rates would be close to 100% if only you mailed enough.