The Donor Retention Problem, Part 3, Strategy & Tactics to Increase Donor Commitment

September 19, 2011      Kevin Schulman, Founder, DonorVoice and DVCanvass

How do you apply it the Commitment Model?  Strategically and tactically.

30,000 ft:

Not everything that you do matters to increasing the Commitment levels of your donors and what does matter does not matter equally.  And we know from information processing theory that people cannot process a million things in order to form an opinion or make a choice – they use filters and mental short cuts to deal with the world and this includes how they interact with your organization.  This means the list of things that really matter is finite, not infinite.

With a benchmark survey we determine the marketing, operational and communications activities and messages that matter.  Your organization needs to focus resources and have everything that you do support relationship building.

This won’t happen overnight or maybe at all if we don’t make it less daunting, simpler to execute against and with a more immediate upside.  Enter the more tactical applications.

20,000 ft.

The great strength and weakness of direct marketing is its reliance on past behavior (most notably, the financial metrics of recency, frequency and monetary amount) to presume future behavior.  Donors get put into buckets based on their past RFM behavior.  This proven process still requires living in the world that was and assuming it will be – good behavior begets good behavior and vice versa.  The big problem is this becomes a self fulfilling prophecy for poor retention since the formerly “good” donor with, for example, two “missed” contributions quickly becomes tomorrow’s “bad” donor.  The even bigger problem is that non-profits wind up implicitly accepting the premise that there is no real way, (other than brute force of more solicitations), to impact future behavior, an almost fatalistic view that good donors are born, not created.

But if Commitment to an organization is created, not born, (nobody thinks people are preordained to like one non-profit over another, right?) and if Commitment is correlated with all the key behaviors we covet, doesn’t it stand to reason that we can impact it and by extension, those behaviors?  That we can turn an otherwise “bad” donor into a good one and perhaps more importantly stave off defection of the “good” donor?

This is not to suggest you can catch lightning in a bottle.  The vast majority of your donors are not committed to your organization and while in theory many could be, in practice you have to make choices based on limited resources and the likely return and therefore, pick a relatively small handful to target.  There are “good” donors going off your file every single day.   They, by definition, are either highly committed to your organization, uncommitted or somewhere in between.  The good behavior/high commitment segment is an obvious place to start.

Ground level

The unflattering comparisons often made between the non-profit and commercial sector are mostly unfair.  In one area however, the non-profit sector is woefully behind; true relationship building at the individual customer (read: donor) level.  1 to 1 marketing, relationship marketing, feedback management…call it what you will, there are countless examples of the commercial sector soliciting opinions and feedback from their customers at every “touchpoint” and post interaction (e.g. purchase, visit, request).  If there are any examples in the non-profit sector we’ve yet to un-surface them.

Why is this?   The non-profit sector will say it is different, that its donors don’t interact with it the way they do with the commercial sector.  True to a point but the typical non-profit does send an enormous amount of mail, drives traffic to its website(s), participate in social media, use email marketing, telemarketing and in some cases, customer service call centers.  In short, there are more “touches” than one might think and every incentive in the world to adopt these feedback processes in at least a few of them.

For example, a non-profit can use a survey widget on Facebook or its website to ask the three commitment questions and satisfaction with the most recent interaction.  The responses place each respondent (i.e. Facebook or website visitor) into a 2×2 matrix of hi/lo commitment and hi/lo satisfaction.  Each segment has specific business rules that trigger automated follow up to either remediate a bad experience, build a relationship or maintain a strong one.

You won’t be able to follow up with everybody, some will remain anonymous but this can be done quickly, cheaply and with no extra staff time so increasing lifetime value one donor at a time visa vie more commitment is both feasible and worthwhile.

Summary

Donor relationship management is a concept whose time has come. It is the aforementioned light in the now dark world.  To get there requires breaking down the sizeable barriers to the paradigm shift from donors acting altruistically to supporters in need of reciprocal care and feeding.  To facilitate this paradigm shift we have operationalized how to measure and impact the strength of a donor relationship and created specific tools and applications to execute against it.

Remember, your mission only exists because people elect to support it.  Building a relationship with those supporters should be considered an obligation – one that happens to pay for itself many times over.

One response to “The Donor Retention Problem, Part 3, Strategy & Tactics to Increase Donor Commitment”

  1. Totally agree. We have to show our donors we know them. This requires actively embracing strategic donor relationship management. We