We’re Not The Only Ones Focused On Retention
Back in April, we asked Agitator readers a simple question:
What percentage of your nonprofit’s 1st time donors make a second gift?
The final results of our survey …
- 32% — less than 30 percent converted
- 29% — 30-39 percent converted
- 22% — 40-49 percent converted
- 17% — 50 percent or more converted
Not impressive. That’s not the first time The Agitator has focused on donor retention as a top priority. But those results convinced Roger and me that we couldn’t hammer away at the retention issue enough.
We fundraisers aren’t the only ones to give priority to retention.
Here are the results from a Forbes Insights survey of 321 marketing executives at companies with more than $250 million in annual revenue in the U.S. and the U.K.
According to their report, 52% of these marketing and corporate managers cited customer retention as their top current priority, followed by customer acquisition (38%), and customer profitability (29%). I was surprised by the strong showing for retention, given that the ‘glamor’ in corporate marketing has always been on increasing market share. I’m not sure whether they are learning from us nonprofits, or we should be learning from them.
Whatever the case, here’s one time where The Agitator is prepared to side with the big boys and girls!
You’re forewarned … we’re going to keep hammering on retention.
Tom
4 responses to “We’re Not The Only Ones Focused On Retention”
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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Dear Agitator, I worked for 20 years in a for-profit, and customer retention was a huge focus c-suite on down. Much more profitable to keep an existing customer than to get a new one. Retaining customers is just good business sense, in any industry. Learned in b-school that long term customer value is related to long term value of the firm, which is related to shareholder value. In non-profits, we have to provide constituent value, a “higher calling” than shareholder value. Don’t know who got it from who!
Hi! Great topic – especially since it seems it gets pushed behind “Get’em in, Get’em in” mentality. As a non-profit manager of outbound telemarketing, retention is one area where I feel we could use improvement. Increasing the retention rate of renewed/reactivated donors is on the top of my goals list because the idea of reactivating the donor(s) is not just to get them back in our active file, but also to re-engage them to continue giving. We know donors reactivate through every channel and for all reasons but what we don’t know is why they stopped giving for such a long period of time and what will make them continue giving. This can only be determined through deep analysis (LTV, subsequent giving, channel preference, etc.) I look forward to reaching my “personal” goal of a 70% retention rate for all donors reactivated through outbound. 🙂
Hammer away! It’s that important. And right now, organizations need to be thinking creatively about how to get back the donors who have lapsed during the recession. We all likely have some donors who were current for many years and lapsed during the last couple. How are we going to approach them differently? With a couple clients, we’re trying the approach of acknowledging their long time commitment through statements that show their giving history. What are others trying?
Clearly, the comments indicate that many Agitator readers understand the value of retention.
As Tom noted, we’re going to be spending a lot more time on this because it really is ‘do or die’ time for many nonprofits.
For a moderate sized organization of say, 20,000 donors, with each donor contributing an average of $40 a year a 1% improvement in retention puts $8,000 to the bottom line in the first year for virtually no cost. Most organizations will spend at least $5000 to replace 1% of their lost donors. What a waste!
Stand by. More to come.
Roger