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Where’s the Acquisition Variable in the Retention Equation?

Kerri Kerr
By KERRI KERR | Tuesday, 18 March 2014 09:29
Categories: Avalon Insights, Donor/Member Acquisition
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We have arrived at Part II of our Donor Acquisition blog series.

 

So we’re all on the donor retention bandwagon, right? Treat your donors well; use their personal information to show that you know what interests them; thank them promptly and frequently; describe the impactful results of their support, etc.

 

But what about the acquisition variable in the retention equation?

 

While the above techniques are important, they all happen after the donor comes in the door – but retention potential comes into play long before that moment. And if donors don’t join your organization for the right reasons – namely, passion about your mission and a desire to make a real difference – then no amount of engagement and retention activities will keep them on board.

 

And here’s why: we often talk about "dating" (educating, cultivating) our donor prospects before asking them to "marry" us (donate) – but when we're “marrying” incompatible people, it's no wonder our relationship often ends in divorce!

 

So as I see it, the retention discussion needs to include the answers to these critical questions:

 

Where is the focus on first gift? Avalon’s analysis has shown a clear break in donor value at $25. Start with a first gift below $25, and the donor value doesn't change much over the lifetime of the donor. Start with a first gift above $25 and the donor value takes off – resulting in a stronger, more productive relationship with that donor. Bottom line: yes, you'll always get a stronger response rate when you ask for $10 instead of $25 – but at what price?

 

Where is the focus on message and package ROI? Have you been bringing in donors with a single issue that’s rarely addressed in your ongoing mission work? Then don't expect those donors to stick around. Trying to acquire donors with just a one-paragraph case for support? Good luck. Donors need to know what your organization does and how they can help make the world a better place by supporting it – you cannot possibly say that convincingly in four sentences. Giving away lots of premiums? Who wants to be in a long-term relationship where someone only stays if the gifts are good enough? Renewal strategy must be a part of every acquisition messaging discussion.

 

Where is the talk of list ROI? Some lists have incredible up-front results, but then those donors never give again. Other lists might have a lower response, but the donors acquired are engaged from Day One and return the investment in less than a year. A good acquisition mail plan balances solid up-front returns with even stronger list ROI. Don't be afraid to pay a little more for a donor who will double his or her giving in a year – instead of throwing money at donors who are waiting around for the next big discount or premium offer.

 

But wait, there’s more:

- Groupon offer? These donors are looking for a deal – their hearts are not engaged in supporting your cause. 
- Canvassing gift? Retention on these donors is often awful because they just gave to not be mean – not because they were truly engaged by the person standing on their doorstep interrupting dinner, or stopping them on the sidewalk. 
- Have you fully capitalized your own internal reinstatement efforts? Why spend four times as much to convince new prospects that they can work with you to change the world when you could simply remind donors who already know about the terrific work you do, but just forgot? (But once you get them back, you have to do a better job of keeping them this time around!)

 

So spend a little more on your acquisition lists. Try co-op modeled lists – our analysis has shown these lists’ ROI to be off the charts. Scrutinize up-front and back-end results so you have the complete ROI picture – because the best donor retention plan begins with acquiring high-quality, committed donors.

 

We always have to keep in mind that donors trust us with their money. We have a responsibility to steward that money well and never take it – or them – for granted. But direct marketing programs are expensive, and we have an equal responsibility to focus that expense where the organization will get the best return – on how those donors are acquired in the first place.

Because you reap what you sow.

 

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