Did you know as many as 81% percent of new donors don’t return to give again? And only 43% of all donors remain loyal? Do you know what your retention rates are or how to increase donor loyalty?
The sorry state of donor retention has been a topic of discussion for at least the past decade, since the Fundraising Effectiveness Project Report began collecting data. Yet too many nonprofits still don’t prioritize donor retention strategies.
Whatever you’ve done in the past or whatever you’ve learned before today, I’d like to take another tack. You may know I love applying lessons from other disciplines to nonprofit fundraising and marketing; recently an article from Merkleinspired me to consider how the social benefit sector might use commercial business insights to increase donor loyalty. After all, an average customer retention rate for for-profit businesses range from 54% to 84%, which is well above the nonprofit average of 43%.
The same things that keep “customers” steadfast and true can keep donors loyal too. Specifically, nonprofits need to build a relationship and offer delightful surprises, convenience, rewards, and appreciation.
Over the period of the pandemic, the Merkle “2021 Loyalty Barometer Report<” showed four trends in consumer thoughts on rewards and benefits.
I’d like to dive into them, applying a nonprofit spin to increase donor loyalty.
1. Consumers want a relationship with a brand.
Per the Loyalty Barometer, 81% of consumers want a relationship with a brand. Yes, your nonprofit is a brand. And, yes, your donors are consumers. They “consume” or “buy” who you are, what you do, the values you stand for, and how you approach your work and treat the people you work with. This is who donors want to relate to and get to know better. They want to bask in your aura, be embraced as part of your community, and consider themselves members of your family.
For this to happen, you have to treat them accordingly. A “one and done” transactional approach won’t build a relationship. Think about how you build relationships with your personal network; build a written plan to do the same with your donors. And by written plan, I mean make a that integrates appreciative gestures (such as weaving in well-planned and well-executed surprises or simply saying “thank you”) into fortifying a consumer-brand relationship that feels genuine and human.
Note that the relationship extends to every interaction between the consumer (aka donor) and your brand. Your loyalty program (aka “donor communications” or “donor relations” or “donor stewardship” program) is just one of many touchpoints that must be considered within the entirety of the consumer’s brand experience. Donors know only one organization. They don’t care if the touch comes from marketing, fundraising, or programs. Anyone in your organization can make a values match—whether as ambassador, advocate, or asker.
Train all staff to be enthusiastic communicators. Make sure they know how to recognize and handle potential donors. Ensure all public-facing interactions are customer-service focused. No one should ever say “that’s not my job.”
2. Surprises and convenience drive emotional connections.
Per the Loyalty Barometer, 58% of consumers feel the most important way a brand can interact with them is through surprise offers and gifts. I’ve long advocated for adding “wows” to your donor relationship-building strategy, so this finding particularly struck me. Not surprisingly, the pandemic caused many consumers to change the way they shop, including shifting to ecommerce channels. Surprise offers and gifts helped alleviate some of the financial strain many felt during a pandemic and recession, while convenient shopping experiences reduced stress and anxiety. Providing consistent convenience fostered trust and resulted in the brand becoming a staple in the consumer’s way of life.
If you want to become a staple in your donor’s life, you must provide consistent value and surprises too. You may not think of it this way yet, but you’re in the happiness delivery business. Isn’t that a nice business to be in? Seriously, when you reframe your work this way everyone wins. It’s not about pandering to people with money. It’s about lifting people up—because a rising tide raises all boats.
And don’t forget about offering convenience. I can’t tell you how many gifts I’ve failed to follow through on because of one or more impediments in my way. Donors are well-intentioned, but busy. Help them out:
- Make donate buttons stand out using bold, contrasting colors.
- Put donate buttons in multiple places so folks don’t have to hit the “back” button.
- Make branded donation landing forms that match whatever campaign appeal the donor received; they need reassurance they’re in the right place.
- Make landing pages compelling and easy to navigate.
- Shorten donation forms by removing any unnecessary fields; you can always ask for additional information later on (e.g. on your thank you landing page or in a thank you letter or email).
Make everything on your website and emails mobile responsive. Did you know
- Include multiple ways to give (e.g., credit card; check; donor advised fund; stock) and provide all necessary information (e.g. mailing address; phone number; tax identification number).
3. Discounts and free products remain top rewards.
Per the Loyalty Barometer, 70% of consumers prefer discounts and offers. What consumers want most from a brand relationship is appreciation for being loyal and supporting the brand by making a purchase. Rewarding consumers through a loyalty program is a foundational way to show appreciation.
I see three easy ways to apply this finding to nonprofit fundraising:
- The first is to create loyalty programs such as annual or legacy giving societies or monthly giving clubs. Then offer rewards for being a member. They don’t have to be tangible gifts; offering opportunities to get together with other like-minded folks who share their values is plenty and can be greatly enjoyed and appreciated. Right now, virtual meetings, events, town halls, or fireside chats are swell. Soon you can offer in-person get-togethers too. Even if folks don’t attend, just the opportunity to attend is a reward.
- The second is to offer chances to win prizes for completing a survey, signing a petition, calling a congressperson, sharing an email or social media post, pinning something to your social media account, or anything else you can creatively dream up. People like to engage, and when you enter them into a raffle for a prize (preferably one that is donated), they’re more likely to join the fun. When you add some fun to a donor’s life, they think of you positively.
- The third is to offer donors opportunities to leverage their giving. People love to stretch their dollars, so try to offer opportunities for challenge grants, gifts made possible through economies of scale or ripple effect giving.
4. Loyalty can sustain brands through disruption.
Per the Loyalty Barometer, 57% of consumers indicated that they did not change brands due to the events of 2020. This speaks volumes for the importance of prioritizing the development of close emotional bonds with your donors. And that’s really the whole point of placing a premium on donor retention strategies. If donors identify with you, they’ll stick with you. In fact, ongoing donor retention is 61% vs. just 19% for one-time donors. So anything you can do to get that 2nd, 3rd, and 4th gift is a valuable down payment on your nonprofit’s future.
Ready to adopt a more human donor loyalty philosophy and wrap it into a written strategic plan that holds people accountable for seeing it through and measuring success? Here are some action steps you can take to get started.
Action Steps to Increase Donor Loyalty
1. Proactively engage customers (aka donors).
Weave in well-planned and well-executed “customer experiences” that keep you in active relationships with your donors. These can range from saying a simple “thank you” to giving them delightful “wow” surprises to telling stories to offering useful information.
Everything is about the donor (what they need, want, and will likely appreciate) rather than about you (your needs, your ego, what you think donors should appreciate). Powerful, lasting relationships are built on being a giver, not a taker. A lover, not a lecturer. A helper, not a hinderer.
It’s helpful to:
- Inform donors how their gift was used.
- Share details about upcoming events and volunteer opportunities.
- Inform donors of breaking news and/or problems as soon as possible.
- Remind donors when it’s time to renew or fulfill a pledge.
When you keep donors in the loop, they find you reliable. They don’t have to worry, because they’ll know you have their back. This builds trust—the foundation of all lasting relationships.
Consider adding creative strategies using artificial intelligence (AI) for a personalized approach. The simplest tactic is to set up auto-responder email messages after a donor makes a gift. These can be tailored to particular campaigns. First comes the thank you; then comes the follow up with a story of impact, a heartwarming thank you from a client, a list of other (non-monetary) ways to become involved, and so forth.
Each time, let your donor know when they can expect to hear from you next. When you follow through, this builds more trust.
2. Set realistic expectations.
Don’t say “I’ll call you” unless you mean it and have built a system to make sure you don’t fail. Earning trust is work. One report by Salesforce found 61% of customers said it’s difficult for a company to earn their trust. Delivering on your promises is the bare minimum. Over-delivering will make you stand out. Under-delivering will kill the budding relationship.
Make it your plan to always over-deliver on the promises you make to donors. Begin by being clear about what they can expect from you and your organization. Be as realistic as possible; then work to go above and beyond. It could be as simple as “you’ll soon receive a list of upcoming free events,” and then you also include a free ticket to a paid event as a thank you for joining your family.
EXPECTATION-SETTING EXAMPLE #1: Rather than sending your standard direct mail package to major donor prospects, you send custom personalized “advance” letters letting them know how important they are to you and that they’ll hear from a board member within the next two weeks to talk about getting together to discuss their philanthropic interests for the coming year.
You assign donors to board members and get them to commit to a two-week timeframe that works with their schedule.
FAIL: At the end of the two-week period, you call to check in with board members who’ve not reported back to you. You learn, alas, quite a few haven’t yet made their calls. Some say they’ll make them within the next two weeks. Some tell you they’ve decided they don’t feel comfortable doing so; could you make the calls for them or assign them to someone else? Whatever happens at this point, you’ve failed to deliver on the promise made to the major donor prospect to whom these folks were assigned.
SUCCESS: When making assignments, you ask each board member to give you one or two specific dates on which they expect to make their calls, and then you ask them to get back to you immediately with results.
The day before they’re supposed to call, you send a reminder text, voicemail, or email (depending on the board member’s communication preferences) and ask them to confirm. You remind them the donor expects to hear from them, and if for some reason they can no longer make the call on this date, you ask them to please let you know right away so you don’t risk burning bridges with this donor.
If they can no longer make the call, reassign quickly, make the call yourself, or find a VIP on your team to make the “wow” surprise call (imagine how the donor might feel getting a call from a museum curator, doctor in charge of research, playwright, celebrity chef volunteer, lead attorney on a civil rights case, etc.). Of course, you’ll need to prepare the caller for how to handle the conversation; sometimes it may mean closing the talk with this request: “May I have our executive director give you a call to continue this dialogue?”
Once you’ve established clear expectations, align your teams (staff and volunteers) to meet these objectives. Is everyone doing what they can to provide a better donor experience? Do you have a written plan that holds them accountable? Someone to hold their feet to the fire? Don’t run the risk of falling short—it can do a lot of harm since people tend to recall negatives before positives. Even one mistake could be enough for a donor to leave.
3. Establish clear success metrics.
Setting key performance indicators (KPIs) around customer service lets employees know you’re evaluating performance objectively.
Ensure everyone is up to speed on customer service best practices. For example, at one organization where I worked, customer service was a full chapter in the employee handbook and people, with great pride, really took it to heart.
You should also wrap donor service into job descriptions for all staff, not just development staff. At another organization where I worked, volunteer coordinators knew they were expected to convert a certain percentage of volunteers to donors. They understood donations made the mission possible and even found their volunteer-donors became more dependable volunteers as well.
Why? They had more skin in the game and truly identified as being a supporter of the organization. To ensure you’re meeting your objectives, measure customer satisfaction. Gather donor feedback through simple surveys, online interactions, or communications via email, text, or social media. Listen to what donors are saying and watch what donors are doing. Wrap what you learn into new strategies as you move forward and reward employees who deliver the best customer experiences.
Success begins—and ends—with how you treat your donors in between the times when they make donations.
As a fundraiser, it’s your job to really think, long and hard, about what you can do to make people feel good. Transparency. Honesty. Integrity. Graciousness. Gratitude. Rewards. Convenience. Belonging. Give these to your donors.
Want More Action Tips to Increase Donor Loyalty?
Get the Attitude of Gratitude Donor Guide. I’ve taken everything I’ve learned about sustaining donor relationships over the years and tucked it into one handy no-nonsense guide on the practice of gratitude. It also includes sample templates, worksheets, and my Creative Ways to Thank Your Donors guide with 72 ideas you can use!