Thinking ‘Lifetime’
Yesterday I talked about the simplest step your organization can take to increase the lifetime value of your donors — tighten up your acknowledgement process. If you didn’t check out this compelling data from Grizzard establishing that point, please do so.
But then I got to thinking, how many Agitators readers might still not be sold on the fundamental importance of focusing strategically on donor lifetime value? Despite the fact that The Agitator has probably pushed this key point more than any other. As Roger says here, in one of dozens of posts talking about lifetime value …
“If you or your consultants want to be rewarded on performance, this is the metric that ultimately matters. It’s a mystery to me why most organizations don’t set this as the basic performance standard. Almost anyone with electricity can figure out what to print and mail, sign a purchase order or run a spreadsheet. Few understand that improving value is the ultimate test … to say nothing of how to do it.”
As I noted, there’s plenty more in The Agitator regarding lifetime value; just Search ‘lifetime value’ in our website archives.
But if you don’t believe us, read this recent post from marketing guru Seth Godin, titled Thinking lifetime (don’t break the chain). He starts by talking about how Hewlett Packard lost his personal business because their customer service let him down. He switched to Canon. I loved his comment: “The thing is, a customer is never out of warranty, even if his product is.”
Echoing a point Roger made here about nonprofits’ customer service, Godin concludes:
“Think of the interaction at the deli counter or the pump or the bursar’s office or the alumni office or on the website from the point of view of the customer and the chain. Where are the moments where you might lose her forever? What are the key places where you need to intervene and invest in the relationship instead of milk it, or drag it through the mud? Assuming that your competitors are just as selfish and metric-driven as you are isn’t a great strategy, because you’re still losing when you break the chain.
Support is not a cost center, it’s a profit center. Treating customers with urgency and clarity and respect (maintaining the chain) is more urgent than ever. But companies are busy measuring time on the phone or cost per hour of support people instead of even trying to measure customer churn.
Think lifetime, all the time.”
AMEN!
Tom
P.S. For more on customer service as it relates to nonprofits and donor retention, Search ‘customer service’ in The Agitator website archives.
4 responses to “Thinking ‘Lifetime’”
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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I’m not aware of any in-market tests specifically comparing recurring vs. gift frequency language. I suspect the answer might not be the same with all gift frequencies, nor with all people. It sounds like a great opportunity for you to test and find out what works for your audience. Based on the literature, here’s a couple […]
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Based on what we know from existing data, those renewal notices can actually be pretty effective in getting people to donate. They tap into our psychology – creating a sense of urgency, reminding us of past support, and using personalization to make the message hit home. They’re playing on our natural tendencies to feel obligated […]
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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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There’s just one thing to consider when designing a supporter journey: the supporter. More specifically, you need to take into account: Who the supporter is i.e. their identity, which is the reason they support this cause, and their personality, which describes the way they “see” and process the world. These will determine the kind of […]
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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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Love where Seth says “Support is not a cost center, it’s a profit center.” Nordstrom’s knows that, for sure. Would love to take that message — big and bold — to the nonprofit community. Especially to those folks who want to hire a “Director of Development” and then provide them with zero support.
Thanks for this pos and i loved Seth’s post too.
As a consultant focused on monthly giving, I keep being totally baffled how hard it seems to be for huge (and I literally mean HUGE) organizations to consider investing money in building lifetime donors. They’d rather spend millions of dollars reaching out to donors than a few thousand to generate lifetime donors (like sustainers)… I come across it every day, so please keep these posts coming, maybe one of these days they’ll wake up!
On a good note, I’m fortunate to also come across some other HUGE organizations who only become bigger because they do GET IT and they COMMIT just like they expect their own donors to commit to them as sustainers, i.e. lifetime donors. So, there’s still HOPE for others and your posts may make the difference. Thank you!
Tom and Roger, where would the nonprofit community be without you guys?
Sigh. It feels like I’ve been pushing this point for years as well. We live in an instant fix world. One where focusing on long-term takes real courage, and commitment, and consistency.
Last year, I created a training program for small nonprofits with the fundamental purpose of bringing EVERYONE in an organization, from board members to EDs to DDs, on board with the concept of lifetime donor value (Erica was one of my favorite presenters and will be presenting again next month – thanks again, Erica). Making strides? I like to think so. Those of my members who really ‘get’ it are hiring, no not their first director of development, but positions with titles like Donor Relations Manager.
Keep on pushing — and thank you Agitator dudes. We love you.
One of my favourite podcasts about marketing and advertising is about customer service. It gives so many examples that relate directly to charities. Or it should…if we know what is good for us!
http://www.cbc.ca/undertheinfluence/season-3/2014/03/28/tales-of-customer-service-2/