Even small improvements in donor loyalty can have a huge impact on the returns an organization is able to generate from its fundraising. Here are the seven donor loyalty metrics that every nonprofit should be tracking:
1. Attrition rate – the percentage of donors lost over a given period – usually a year. It is important to look at rates of attrition for specific categories of donors or appeals rather than across the database as a whole
2. Gains/Losses – the number of new donors recruited and the number of those now considered lapsed will also be of interest. Organizations participating in the Fundraising Effectiveness project can now benchmark their performance against other organizations.
3. Donor Lifetime Value – Lifetime value can be used to shape the development program, but it can also be used to measure its success. It is now possible to measure the success of a campaign or program by its impact on longer term value.
4. Transaction Frequency – organizations can also measure loyalty by the frequency with which annual fund or ‘cash’ donors engage with the organization.
5. Donor Satisfaction/Commitment and Trust – These are the three big drivers of loyalty, satisfaction being the most significant. At a minimum a development program should monitor its progress in this area.
6. Exit Polling – In seeking to maximize retention nonprofits should also engage in regular exit polling of their lapsed supporters. Common problems can be identified and remedial action taken as appropriate.
7. Number (and category) of Complaints – Organizations may also monitor the number of problems that donors experience with their programs. Indeed, donors should be actively encouraged to complain where the organization has failed to meet their expectations. Research indicates that donors who complain and have their problems corrected are subsequently more loyal than those that never encountered a problem in the first place.
How do you assess your donor’s level of loyalty? Let us know in the comments below!
The previous posted is excerpted from “Study Fundraising” and used with permission.