Seth Godin On Loyalty
Some good observations from the marketing guru on loyalty.
First, an interesting definition:”Loyalty is what we call it when someone refuses a momentarily better option.” Not too sentimental … at first glance.
Then some bad news: “Loyalty isn’t forever. Sometimes, the world changes significantly and even though the loyal partner/customer likes that label, it gets so difficult to stick that he switches.”
And his conclusion: “Tell a story that appeals to loyalists. Treat different customers differently, and reserve your highest level of respect for those that stand by you.”
But read the whole piece.
Do you have ten stories from loyal donors in your files? How are you using them?
Tom
2 responses to “Seth Godin On Loyalty”
Behavioral Science Q & A
Integrating an individual giving appeal with other communications from a charity can have both positive and negative effects, and the outcome largely depends on how it’s executed. Advantages of Integration Brand Consistency: Maintaining a consistent appearance and messaging across all communications can reinforce the org’s brand identity and strengthen brand recognition and trust among your […]
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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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I have heard the word loyalty tossed around by many fundraisers over the years, or loyal donors. I think this is potentially a dangerous mind set. We may be better served to understand that we are in the business of continuous attraction. We may be served well to never take any donor for granted. Just a a thought 🙂
I recently switched electricity providers from an all wind provider with a great brand (one that made me loyal for a very long time mostly because I liked what the story they told me made me feel about my self) to a cheaper, dirtier provider. It is entirely economic on my behalf. I don’t really like being with dirty coal, but after so many years of paying a high premium to get “wind” power that never got cheaper, only more expensive coupled with the need to save a lot of cash I had to. What was interesting to me, though, was that the company only recognized (sort of) my loyalty–I’ve been a customer for almost 10 years, despite at least that many moves–after I had already switched.
What I came to realize was that the company had never updated the story it sold me as part of being their customer. I was buying a renewable resource. I didn’t mind, and sort of liked, paying a little more to get an environmentally better option than coal, but eventually, it dawned on me that a wind turbine has a long life, and I had done a lot of subsidizing and saw little or no benefit. It was like the company thought it was okay for me to pay for the externalities that other people were generating by using coal power.
It’s not hard to switch providers in my state, but once I’d already made the move and realized how much I could save, I’d replaced that feelgood story of minimizing my impact with one that was equally as powerful: how much money I could save–hundreds of dollars in a year.
We realized a similar thing at the organization I work for about a year ago: we had to continue to find ways and evolve new stories for our volunteers and donors that kept them engaged and loyal. We decided that there were some opportunities we were going to specifically reserve for our most loyal donors and volunteers. And it wasn’t different giving levels at charity events that you could buy into. We’ve created a number of volunteer opportunities and awards dinners that we only invite people to who we have deep personal relationships with as an organization because they are loyal and active in our community. For instance, we’re an entrepreneurship focused program that deals in changing lives for a historically underserved population. So we’ve started a speakers series where some of our top volunteers who have started and run successful companies can come and speak in an intimate setting with our clients and tell their story. Every speaker has been a highly loyal customer that stuck with us through a lot of growing and developing on our part. Even where they’ve declined, they’re all honored that we asked.
Starting next year, our entire donor focus will be on creating and cultivating donors who will stick with us and make five year investments. The entire discussion within our team is centered around putting together the right set of programs and asks to get people to become loyal. It’s a lot more complicated than just asking for five year commitments, or really even just building a relationship with someone. You have to do both, but also create a story and ways of involvement that 1) make people want to commit because of the relationship and 2) change and evolve with the donor so that one day they don’t wake up and realize they’re not really on your side anymore.
My electricity provider should have looked at the history and said, hey, this guy’s been with us for a long time. He’s loyal, he pays on time, never gives us grief. We should help keep him bought into the story of renewable energy by providing him a discount that rewards his loyalty and patience with paying higher prices for so long that we’re not giving to any other customers unless they, too, are also equally loyal. Instead, I cut one of my single largest variable bills in half and changed the story I was interested in. Could have gone the other way.