Over at Future Fundraising Now, Jeff Brooks is warning fundraisers about misguided advice to stop acquisition efforts in order to focus on retention. Personally, I haven’t seen much of such advice floating around. I sure hope he was exaggerating … or that the speaker he cites was aiming for dramatic effect.

Because Jeff is dead right when he says: “Stopping your flow of new donors is probably the most self-destructive act you could make.”

And: “Donor retention is bad. It’s a huge problem for almost everyone. It’s worse than it used to be. You should be all over improving your donor retention. But you’re not going to solve it by stopping acquisition.”

Obviously, there comes a time when a further incremental spend on acquisition cannot be justified … when the payback from projected new donors (a function of expected lifetime value) cannot reasonably be achieved in an allowable time frame. Every organization needs to come to terms with that calculation for itself.

And right there is the connection between acquisition and retention. If your retention bucket leaks like a sieve, your lifetime value suffers, and with it your ability to turn an eventual net profit on new donors.

But so long as you can reasonably project that acceptable net profit, you should be investing in acquisition. Indeed, strong retention can fuel more aggressive acquisition.

And of course in those deliriously happy times when acquisition is humming, yielding donors from whom you can readily achieve net profit, then there’s only one smart strategy … shot the moon!


views left

This article was posted in: Donor acquisition, Donor retention / loyalty / commitment.
You can follow any responses to this entry through the RSS 2.0 feed.
You can leave a response, or trackback from your own site.