Monthly or recurring donors are crucial to your fundraising in short because of this:
And as the retention rate goes up, so does the only fundraising metric that really matters: lifetime value. Lifetime value is not just the secret weapon for donor acquisition but the barometer of how well your fundraising is doing overall and over time.
Monthly donors have these great retention rates for a bunch of reasons like their automated payment methods, higher motivation or commitment to make the donation in the first place, and special communications (well in theory, more on that in a second). But as Jim Collins said, “Good is the enemy of great” or in Peter Drucker’s words, “Adequacy is the enemy of excellence.”
So, how can you move your monthly giving retention from good to great or adequate to excellent?
That was one of the questions we were looking to dig into more in The Nonprofit Recurring Giving Benchmark Study. For this study, we gave three different donations — one-time, recurring, and one-time to recurring — to 115 different nonprofits and we captured the experience of giving. We also tracked all the communications, online and offline, for 3 months to see how each donor was treated.
Based on what we saw, and the immense value of increased recurring donor retention can have for your organization, here are…
3 Ways to Keep More of Your Recurring Donors
1. Keep them happy and engaged
The idea here is to make them so happy and content that they’d never even think about cancelling their donation or letting their card expire. In our study, we saw that only 38% of organizations changed their email strategy for recurring donors. And while these donors initially received more cultivation focused communication and fewer asks for donations than one-time donors, by the third month, the cultivation touch points were trending down and the solicitation touch points were trending up so, it appears, over time, recurring donors aren’t treated that differently than other donors. In fact, only 9 organizations were sending a gift acknowledgement of any kind — email or in print — by the third month.
So one strategy to try to keep your recurring donors happy and engaged it so simply thank and acknowledge their gift more often, maybe even every month. You don’t have to necessarily send their receipt but simply thank, acknowledge, and reward them for their generous donation. Without, their giving experience could grow more cold and transactional.
And consider a 12 month communication strategy for your recurring donors, not just an immediate stewardship plan. Ask yourself:
- What communications — offline and online — should they not receive because it’s not adding value to them or the relationship?
- Which touch points — offline or online — should you add to better report back to them or engage with them?
- What parts of your strategy just need to be personalized and tweaked specifically for this audience?
Key Point: Treat your recurring donors well, better, and differently to keep them around longer.
2. Don’t let them expire
Now even happy recurring donors may lapse simply because their Credit Card is expired, lost, or cancelled. We know this is a challenge, so in our study we reported one card lost and another stolen to see how organizations reacted.
On the plus side, 68% of organizations were able to automatically update a lost Credit Card through their payment provider meaning the donor was not lost and no extra effort was required by either the organization or the donor. This is best so be sure to check with your current payment provider to see if you have this option and, if not, how you can get it implemented.
Another way to ensure Credit Cards don’t go expired, lost, or cancelled is to avoid Credit Card payments altogether by offering and encouraging automated bank withdrawals (often called ACH or EFT).
According to the 2017 Target Analytics donorCentrics Sustainer Summit — a group of 38 organizations tracking $2.52 billion in total giving — donor retention was 4% higher with donors who used EFT as their payment method. And in this experiment we ran, there was a 55% increase in lifetime value just by offering the ACH payment method (and no significant impact on one-time donations).
Key Point: Use payment methods that make it more likely donors won’t lapse.
3. Get them back
When the best attempts to keep recurring donors happy and engaged and set up on efficient and ‘lapse proof’ methods of giving fail, you have to try and win donors back. Quickly. And personally.
But that was not our experience in the study.
For organizations who did not automatically update the lost card, 75% did not reach out to us at all to get an updated card. And when we cancelled our card, just over half (53%) reached out.
We only tracked for 3 months so, potentially, someone went to contact us a few months after our card was expired. I don’t know about you, but if I was contacted months after my card went expired to set up a recurring payment, again, I’d think long and hard if that’s what I really wanted to do. Time is your friend so you must be able to know who went lapsed and be able to contact them quickly.
And when you do, try to be as human and personal as you can. This is partly a good customer service principle but we found that the majority of communication we did get about our cancelled card was transactional in nature (82% in fact).
A personal approach — send a human email from a human email address — can help you stand out but we found that every single organization that sent a ‘get back’ email from a real person made their way to our Inbox with Gmail (as opposed to the Promotions or Spam tabs).
Key Point: Quickly identify lapsed payments and reach out in personal ways to win them back.
Getting recurring donors is essential. It’s no great secret on how you can make some progress there, but making sure you can keep them around by keeping them happy, not letting them expire, and getting them back will help you improve your recurring giving program in the short and long-term. You can get all the insights from the report at recurringgiving.com.