Confess … did you ever think you’d see a headline like that on an Agitator post?!

Don’t hyperventilate now, because in fact Roger and I haven’t reversed course, and don’t intend to.

But that said, a couple of recent — somewhat contrarian — posts from Analytical Ones caught my attention.

In We don’t have a retention problem – Part 1, Bill Jacobs argues that more granular examination of retention rates — in this case, by age/generation — suggests a more nuanced situation. Namely, that older (age-wise) donors remain more loyal than younger donors.

Here’s the data they use to back up their hypothesis (unfortunately, it’s not clear what the donor universe is for this analysis). From this data, it would appear that Boomers are 25% more likely to be retained (second year) than Millennials, and still older Builders are 50% more likely to be retained.

Jacobs says:

“The big question is whether this trend is a generational issue; a communication method issue; or a combination of both.

The sad fact is that we are no longer acquiring Builders in large quantities any more. And as a larger portion of our new donor classes dip into these younger generations, the lower our retention rates will become.

Now we can either blame these younger generations for not being as loyal as their parents. Or, we can adapt and communicate with them in a more relevant way to ignite their potential.”

If Jacob’s hypothesis is correct, then the headline of his article is very wrong. If more and more new donors are coming from age cohorts that are either inherently less loyal (more data on that, please!) and/or who need to be treated or communicated with differently than the older donors with whom we are accustomed, then the proper headline should be something like:

Retention is a problem that’s only going to get worse!

What do you think?

In another twist, in We don’t have a retention problem – Part 2, Jacobs argues that perhaps fundraisers should be looking at a different retention metric … revenue retention. Parsing the same client’s retention data by revenue retained, he finds that this client has been retaining, in the second year, 55%-63% of revenue obtained from these donors in the first year, while retaining only 36%-39% of the donors.

Jacobs suggests that holding on to the revenue is more important than holding on to (less valuable) donors. That seems like an interpretation designed to placate a nervous board.

I’d like to see much more in-depth analysis, over more years, of costs against acquiring and retaining these donors before making that call! Off the top of my head, I’d like to hold on to as many donors as I possibly could who were returning a net profit.

As Roger well establishes in his book Retention Fundraising (available here or here), it’s the lifetime value of the entire file that matters.

Tom