Donor retention and development has never been so important or possible. Tobin Aldrich outlines the key elements to a proper engagement strategy.
Given the year we’re having, we are inevitably going to see a greater focus by charities on retaining and developing the donors they have. This is a good thing.
Charities in the UK are spending tens, probably hundreds of millions of pounds to acquire donors who don’t give again. Even small improvements in donor retention rates have a huge impact; it has been calculated that a 10 per cent improvement in year-on- year retention doubles donor lifetime values.
We know the key drivers of donor loyalty. In brief, they encompass a donor’s beliefs and values (does the charity share them), experiences (how did they treat me) and emotions (what would happen if I stopped giving?).
We can definitely impact how engaged supporters are with a charity. So a donor retention and development strategy needs to be above all else an engagement strategy. There are a number of tried and tested approaches which successful charities have been following for a long time.
1. Give it priority
Any strategy only succeeds if it is given organisational focus and resources. If your fundraisers are being principally judged on this month’s income or how many donors are brought in this year, then it doesn’t matter how many lovely engagement strategies there are.
So, who’s responsible for the quality of the donor experience in your organisation? How senior are they? Are the trustees involved? Is the chief executive? Are your senior management well engaged in your engagement strategy? How much are you spending on the supporter experience? Is enhancing it in people’s job descriptions?
If you can’t answer these questions positively, you don’t have a donor engagement strategy, you have a wish list.
2. Getting recruitment right
How a charity recruits supporters, the channels it uses and the messages it deploys is therefore crucial to any engagement strategy. Problems happen when there is a mismatch between the expectations of the supporter and how they are subsequently treated by the charity.
Understanding the audience you are bringing in, what people are responding to and what they expect is a critical first step. Making sure that recruitment and donor development strategies are really joined up is vital. Anything which gets in the way of this, for example the habit of many charities to have separate acquisition and development teams, is unhelpful.
3. Thank properly
I don’t think there’s any activity a charity does that’s more important than properly thanking its donors. But too often, charity thanking is neglected.
So here’s some simple things every charity everywhere can do to significantly improve their thanking of supporters.
- Review your thank-you processes. What are your rules? Does everyone get thanked? How long does it take?
- Make sure that every donation is thanked on the day it is received. If you can’t do that, outsource donation processing to a company that can.
- Print out every piece of thank-you communication. Look at what they say and think about how they would make you feel if you got any of them. If they’re not warm, personal and relevant to the recipient, rewrite them.
Once you’ve got good basic processes in place, look at how you can start to exceed donor expectations.
4. Engage early
Signing up to a direct debit or putting a cheque in an envelope in response to an appeal in the post doesn’t make someone a charity supporter, let alone signing a petition or clicking on an email.
What they are doing when they carry out any of these actions is showing some level of interest; opening an often very small window for the charity to establish the beginnings of a relationship.
What happens next will largely determine whether that relationship develops at all. A proper thank you is one part of what needs to happen, but it needs to be supported by communications that engage and ask for feedback.
What charities tend to do, however, is to bombard new supporters with information about the organisation. Strangely enough, this approach often fails.
5. Ask about them
Rather than sending new supporters stuff in the “look at me” category, how about asking them what they’d like? Which you’ll need to do to get permission for future communications anyway. And when you do that, get them to tell you a bit about themselves. Just a bit, not a 20-page questionnaire. A few snippets that’ll allow you to talk to them more relevantly.
Tailor your next communication based on what they tell you. Send them something they might actually be interested in, related to what they responded to in the first place. And repeat. You are moving from broadcasting to supporters to having a dialogue with them. This is transformational.
6. Use (a mix of) the right channels
Understanding which channels supporters use and how is extremely important. Charities need to be able to look across a range of communications channels, map these to donor preferences and behaviours and develop a truly integrated approach.
All types of media are important here. Social media, for example, is already of major importance in donor development. Of course, not all supporters use social media and by no means all of them look at charity messages on those platforms. But an increasing number do and they can be targeted very granularly.
A properly multi-channel approach is something which many charities struggle to do. Again, unhelpful internal demarcations come into play here, such as social channels being managed by “communications” teams not linked up with fundraisers. Breaking down these sort of barriers is essential for sustained success here.
7. Tailor your approach
Not all donors want to be engaged. Many people are happy with a pretty passive relationship with a direct debit and an update once a year. Every person who gives to you has expectations and these need to be acknowledged and met – including when that is to be left in peace.
We have the technology to talk to each supporter, effectively, individually. We, as a rule, don’t. This a matter of systems and processes, which for many charities will need to be rethought and re-engineered. Supporters won’t understand why Amazon, with hundreds of millions of customers, can speak to me as an individual when my favourite charity can’t.
8. Report back
Good reporting isn’t sending supporters an annual review or a corporate document once a year. It’s providing specific, relevant feedback on what the charity did with your money and what happened as a result.
At the Misfit Foundation, when we’ve managed to get unmediated content from the field, we’ve found that donors love it. The charity just needs to get out of the way.
9. Ask appropriately
Of course, charities need to be engaging individuals for a reason. Engagement without an outcome is just entertainment. And even the most engaged people won’t give to you unless you’ve asked them.
So a focus on supporter engagement doesn’t mean relegating the importance of asking. It doesn’t mean asking less frequently, necessarily. It’s all about asking appropriately.
The more information is gathered from the supporter and their interactions, the more relevant and tailored asks can be. A properly engaged donor won’t mind being asked, they will expect it. But how they are asked, for what and why should be in line with the conversation you have had with them to this point.
Ask people in this way and they will give again. Of course they will.
10. Test and learn
The engagement approach is only a theory, however, until it has been tested by your organisation with your donors. The precise mix of communications, the media used, the timings and the messages all need to be tested to find what works in each context. Every single element of donor engagement can and should be tested at a granular level.
Many fundraisers don’t test retention communications because of the issues involved in tracking the performance of cohorts of donors over time. It’s tricky setting up control groups and running tests over time. And of course there’s the time lag between making changes and knowing what impact they are having.
But actually, many things can be tested effectively without running something that feels like a trial of a new cancer drug. We know, for instance, that there is usually a clear linkage between initial direct debit attrition (no-show rate) and subsequent donor performance. So something that can impact on a no-show or second-month attrition rate will probably also beneficially impact retention over a longer period and be tested within a fairly short timeframe. The effectiveness of individual communications can be tested through engagement metrics such as open and click-through rates.
Underpinned by analysis that demonstrates the financial impact of even marginal changes in attrition rates, fundraisers can iteratively develop an armoury of effective donor retention communications and processes.
And then it’s a question of feeding them into the whole fundraising programme to ensure that all activities are developed with donor development at the core.
Tobin Aldrich is chief executive of the Misfit Foundation. This article originally appeared in the March issue of Fundraising Magazine.
