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
This article was posted in: direct marketing, Don't Miss these Posts, donor retention, fundraising, loyalty, marketing metrics, nonprofit management, nonprofits.
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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