Donor Retention. Current Rates are Plummeting! What Every Fundraiser Can Do to Reverse the Trend! Date: 1/15/2013 Presenter: Wayne Robbins

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1 Donor Retention Current Rates are Plummeting! What Every Fundraiser Can Do to Reverse the Trend! Date: 1/15/2013 Presenter: Wayne Robbins 1

2 Retention» Active donor commitment is the enduring passion for your nonprofit. Inspiring donors is key for loyalty Fundraising 2

3 Agenda» 1. WHY? The Case for building/improving Donor Retention 2. Addressing the Attrition Problem (Building Donor Loyalty) 3. HOW? Retention Drives 4. Conclusion: Donor Engagement! 3

4 Do you know your Retention %?» What does a 10% increase in donor retention rates mean in terms of LIFETIME dollars raised? 50% 100% % 4

5 Is Retention important for NPO s?» Improving donor retention rates by 10% can improve LIFETIME dollars raised by? %! (Do we have your attention yet?) 5

6 This scares most NPO Board Members» Donor Attrition Over Five Years # of Donors Attrition Rate Donors Remaining After 1 Year Donors Remaining After 2 Years Donors Remaining After 3 Years Donors Remaining After 4 Years Donors Remaining After 5 Years 1,000 20% ,000 40% ,000 60% Let s dig even deeper into actual NPO data... 6

7 Fundraising Effectiveness Project (FEP) A project to help nonprofit organizations measure and compare The 2012 Fundraising Effectiveness Survey Report is based on 3,184 responses for , from nonprofit organizations in the United States. The responses reflected a total amount raised of $2,049,794,709. 7

8 2012 Fundraising Effectiveness Survey Report FEP Participating Donor Software Firms: Donor2/Campus Management Corporation PhilanthrAppeal (FundTrack Software) DonorPerfect Fundraising Software The Raiser s Edge (Blackbaud) etapestry ROI Solutions GiftWorks (Mission Research) Sage Software MatchMaker FundRaising Software Telosa Software (Exceed!) Metafile 8

9 2011 FEP Data on Donor Retention Rate» Donor Retention Rate was 41% Donor Attrition was 59%! 9

10 Yes, Your Eyes Read Correctly» Nearly SIX out of every TEN Donors from the previous year did NOT donate at all the next year! 10

11 2012 Fundraising Effectiveness Survey Report FEP Participating Donor Software Firms: Donor2/Campus Management Corporation PhilanthrAppeal (FundTrack Software) DonorPerfect Fundraising Software The Raiser s Edge (Blackbaud) etapestry ROI Solutions GiftWorks (Mission Research) Sage Software MatchMaker FundRaising Software Telosa Software (Exceed!) Metafile (Not a SINGLE firm above has taken any steps to address the continually increasing problem of FALLING Donor Retention!) 11

12 This is truly what is happening with existing donors! Donor Attrition Over Five Years # of Donors Attrition Rate Donors Remaining After 1 Year Donors Remaining After 2 Years Donors Remaining After 3 Years Donors Remaining After 4 Years Donors Remaining After 5 Years 1,000 20% ,000 40% ,000 60%

13 Addressing the Attrition Problem! Donor Loyalty Problem? 13

14 CUE THE EXPERT: Dr. Adrian Sargeant Bloomerang Chief Scientist Professor of Fundraising at the Center on Philanthropy at Indiana University holding what is presently the world s only endowed chair in that discipline. Professor of Nonprofit Marketing and Fundraising at Bristol Business School (U.K) and an Adjunct Professor of Fundraising at the Australian Centre for Philanthropy and Nonprofit Studies. Top 10 Most Influential People in Fundraising 14

15 Defining Lifetime Value» The total net contribution that a customer/donor generates during his/her lifetime in your database 15

16 Lifetime Value, or LTV» LTV = Ci Where c = net contribution from each year s fundraising activity i = expected duration of each relationship in years 16

17 Key Decisions in Building Donor Loyalty Costs vs. Donation Revenues Average Lifetime (1-25 Years) Your Retention Rates 17

18 Current Retention Rate!

19 Key Decisions in Building Donor Loyalty Costs vs. Donation Revenues Average Lifetime (1-25 Years) Your Retention Rates Best Use of Staff Time 19

20 Value Segments» Value $ $500 - $1000 $100 - $500 $25 - $100 $25 and under annually 20

21 Key Decisions in Building Donor Loyalty Costs vs. Donation Revenues Average Lifetime (1-25 Years) Your Retention Rates Best Use of Staff Time Using Retention/Reactivation Practices 21

22

23 Key Decisions in Building Donor Loyalty Costs vs. Donation Revenues Average Lifetime (1-25 Years) Your Retention Rates Best Use of Staff Time Using Retention/Reactivation Practices Finding a Database that Helps rather than Hinders Loyalty! 23

24 Why Do Customers Leave? (can this apply to donors...) Death 1% Relocation 3% Won by Competitor 5% Bad Complaint Handling 14% Lack of Interest from Us 77% 24

25 Key Reasons For Donors Leaving (in order of relevance) No longer able to afford support (smallest %) No memory of ever supporting! Organization asked for inappropriate sums Feeling that other causes are more deserving Does not feel organization needs my support Organization s communications were inappropriate Not reminded to give again Organization did not inform how monies were used Did not feel connected! 25

26 26

27 Retention Drivers Drip feed mission performance data SEVEN reasons why visual content is more compelling than text From Marketo and The Agitator 27

28 Retention Drivers Drip feed mission performance data SEVEN reasons why visual content is more compelling than text 1. Less Time According to a 3M Corporation study, we process visual information 60,000 times faster than text. In an age when grabbing someone s attention in an instant is critical, visuals work. 28

29 Retention Drivers Drip feed mission performance data SEVEN reasons why visual content is more compelling than text 2. Less Complicated Complex material can often be presented more simply through visuals. A common example is the quick setup guide your digital camera came with. Use the same concept for anything from a benefits map to a complex manufacturing process. 29

30 Retention Drivers Drip feed mission performance data SEVEN reasons why visual content is more compelling than text 3. More Emotional Although novels can be gut-wrenching to read, marketers don t have that kind of time to elicit such an emotional response. Visual content can do it in an instant, and connect it with the company s brand. 30

31 Retention Drivers Drip feed mission performance data SEVEN reasons why visual content is more compelling than text 4. More Shared On Facebook, photos are shared more than status updates or links, and videos are shared more than photos. 31

32 Retention Drivers Drip feed mission performance data SEVEN reasons why visual content is more compelling than text 5. More Channels Not only is visual content shared more often, but there are quite a few channels to leverage that support only visual content, such as Pinterest, Flickr, YouTube and Vimeo. 32

33 Retention Drivers Drip feed mission performance data SEVEN reasons why visual content is more compelling than text 6. More Memorable Studies have shown that, especially over the long-term, we remember images better than words; and unlike text, the effect is magnified with each viewing. 33

34 Retention Drivers Drip feed mission performance data SEVEN reasons why visual content is more compelling than text 7. More SEO Juice When top rankings for competitive keywords are elusive, having relevant visual content provides an opportunity for high rankings in the image and video search results. 34

35 Retention Drivers Drip feed mission performance data Build a relationship (especially upper levels) Connect often Be personal (SEGMENT) Think of how a good friendship develops 35

36 36

37 A Donor Timeline of Relationship Building! What is the donor s engagement over time! History of every event w/ the person Highlight important retention information ---When upgrades/downgrades occurred ---Communication highlights

38 Retention Drivers Drip feed mission performance data Build a relationship (especially upper levels) Connect often Be personal (SEGMENT) Think of how a good friendship develops Develop a good complaint handling process Provide numerous touch points 38

39 Retention Drivers

40 Retention Drivers

41 Retention Drivers Drip feed mission performance data Build a relationship (especially upper levels) Connect often Be personal (SEGMENT) Think of how a good friendship develops Develop a good complaint handling process Provide numerous touch points Be honest when things go wrong 41

42 Retention Drivers 42

43 Retention Drivers Drip feed mission performance data Build a relationship (especially upper levels) Connect often Be personal (SEGMENT) Think of how a good friendship develops Develop a good complaint handling process Provide numerous touch points Be honest when things go wrong Always communicate what monies are doing! 43

44 Conclusion: So Strive For: Donor Satisfaction Donor Commitment/Engagement 44

45 Retention Drivers 45

46 Retention Drivers 46

47 Conclusion: So Strive For: Donor Satisfaction Donor Commitment/Engagement Donor Trust Donor Loyalty Doubling your lifetime value =? 47

48 Questions? Retention Based Fundraising Date: 1/15/2013 Presenter: Wayne Robbins 48

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