Radar for Attrition

March 28, 2016      Roger Craver

The loss of donors — especially newly acquired donors — is silent and deadly. There’s no screaming or shouting. No door slamming. Seldom any advance notice. One day they’re just gone.

This is why it’s so important to discover, before the donor quits, which of the experiences you’re providing are seen as positive or negative.

Sadly, despite the massive hemorrhaging of newly acquired donors (the average attrition rate for first year donors in the US is 75%) few organizations have absolutely any idea, short of death, why a specific donor leaves. And absolutely no idea when that donor will hit the exits and what actions to take to keep that from happening. (See my earlier Agitator post Milkshake Mistakes.)

RadarIt’s of little help to infer donor attitude and behavior by segmenting your donor base by demographics (age, gender, education, income) or by past giving behavior (recency, frequency, monetary value).

You may find that your RFM buckets look different demographically. If you append enough external data you’ll probably find a group who loves blue hats and one who loves red. This is all very descriptive and and correlated, but none of it is causal of the giving decision; just red-herrings and rabbit holes.

It is this failure to get at root cause that is your retention problem.

The absence of any sense of why the donor gave, what preferences and interests he/she has, leads virtually every nonprofit to play the volume game. To send out loads and loads of ‘stuff’. Not only lots of stuff, but usually the very same stuff to donors with widely divergent interests and preferences.

This approach is about as effective as picking a stock by tossing a dart at the Wall Street Journal’s daily stock market tables.

Sure, as some will quickly argue, there are ‘best practice’ approaches labeled with all sorts of jargon (‘stewardship’, ‘cultivation’, ‘no ask communications’ … to name a few).

In reality this so-called ‘efficient targeting’ is the bane of nonprofit retention. It leads to the false belief that we’re really doing something materially different when, in fact, it is simply what I call ‘efficient spamming’ driven by sophisticated delusion.

Contrast the standard nonprofit ‘carpet bombing’ approach used on donors with commercial retailers. True, many a retailer and cataloger blasts lots of spam in their customer acquisition efforts. But, in my experience once you’re a customer and get online or into a retail store it’s a very different experience.

Online I log into my account and am presented with other items I might like. I can read user reviews, my purchase history is there. I can save ‘carts’ or lists for later, share with others. And when I go into the retailer’s brick and mortar store I’m treated with an interpersonal dynamic.

So how do we fix this problem?

The reason The Agitator, along with DonorVoice and SOFII is presenting the free April 12th webinar How To Reduce F2F Attrition in the First 90 Days is to address this basic retention problem. To illustrate — using one of the most fraught and expensive channels of acquisition as an illustration. Agitator readers can Sign Up here.

In short, the procedures, recommendations and solutions covered in How To Reduce F2F Attrition in the First 90 Days are just as applicable for direct, mail, telemarketing, DRTV or online activity.

The root cause of the attrition/retention problem is the absence of any effort aimed at actually measuring the quality of the donor’s experience and then taking action on that information.

What do you think best predicts whether a new Face2Face donor (and, by extension, any other channel’s donor) will stay or leave in his/her first 90 days?

If you’ve built a model or done some sort of analysis without measuring the donor experience (and let’s face it, this is at least 99% of charities) you probably found that the age of the donor matters, and perhaps the sign-up amount, the soliciting agency you’re using, whether a welcome call was done, the gender of the donor … on and on. You may even have model statistics suggesting your model is ‘good’.

What this model doesn’t come with is a ‘garbage in, garbage out detector’ to let you know you’ve found exactly the wrong answers to what causes 90-day attrition because you didn’t measure the satisfaction with the experience nor the Commitment Score™, an attitudinal measure of loyalty and future intent. These are the top two predictors in reality — i.e. the world where donors are not widgets on an assembly line. A world where value is assigned to the donor experience and measured.

In sum:

  • If you actually measure both street fundraising experience and donor commitment at the point of acquisition you will know — 90 days before it happens — who is going to leave. More importantly why and what to do to fix it.
  • If you don’t take these measurements you’re likely to go in the wrong direction and miss the root cause of the defection, what needs fixing and how. ‘Garbage in, garbage out’. If you have an incomplete view of the world you will get incomplete and incorrect answers on what’s wrong and how to fix it.

Put simply: If you aren’t measuring the donor experience, you can’t manage it.

It perplexes us greatly as to why the commercial sector assigns enormous value to measuring and managing customer experience while the nonprofit sector doesn’t. Yet our sector continually laments the high cost of acquisition, lousy retention rates and no net growth, while continuing to use the same old tired approaches and/or empty rhetoric and platitudes about donor relationship and experience management.

We aren’t perplexed about how to fix it. It ain’t that hard. And we’ll be sharing that with those who sign up for the webinar.

Want to learn more about …

…how to measure the loyalty of new donors;

…why the loyalty measure (the Commitment Score™) is a near perfect predictor of 30-day retention;

…why the Commitment Score ™ when combined with the measurement of the fundraising experience are far better predictors of 90-day retention than the specific campaign message or ask amount.

…how to aggregate open-end comments and feedback from donors to identify global fixes and improvement opportunities in your F2F process.

I hope to ‘see’ you on April 12th.

Roger

P.S. I think you’ll also be fascinated — and more importantly you’ll benefit — from a lightening round of free (put ‘em to work right now!) techniques to positively nudge donor behavior hosted by Dr. Kiki Koutermeridou, Behavioral Science Strategist from DonorVoice.

Seating is limited so sign up early please.