The New Art and Science of Keeping Your Donors For Life
On this episode of Bloomerang TV, Roger Craver, Editor of The Agitator and prolific writer and speaker, joins us to talk about his new book on donor retention. (Psst, you should buy it!)
Full Transcript:
Steven: Hey, there. Thanks for joining us for this week’s episode of
Bloomerang TV. My name is Steven, and I’m the VP of Marketing over at
Bloomerang.
I’m really excited to introduce our guest today. He is Roger
Craver. He’s the editor of The Agitator. He’s an author, he’s a
writer, and he’s a veteran of the nonprofit sector.
Roger, thanks so much for being here.
Roger: Hey, Steven, it’s a pleasure.
Steven: You obviously write for The Agitator. You put out really great
content. You’ve also been working on a book about donor
retention. Can you talk a little bit about that book and things
you’re up to these days?
Roger: Yeah, over the last three years, we’ve conducted a study of
about a little more than 250 nonprofits in the United States,
Canada and the United Kingdom to find out why people leave and
what organizations can do to keep them, because as you know,
since Bloomerang is big in this field, retention is a real big
problem. In fact, I think for most nonprofits, it’s probably the
biggest problem they face.
Most organizations think that acquisition of new donors is the
most important, but it doesn’t do much good to spend a lot of
money bringing in new donors when they’re pouring out by the
bucket full. They can’t be retained, and that’s a real problem.
In United States, only about 42% of the donors stay with an
organization over a multiple year period, and that’s a great big
waste of money.
I’ve written a book called Retention Fundraising: The New Art
and Science of Keeping Your Donors for Life, and the purpose of
this book is to show folks that there is an empirical data based
way of improving retention.
Up until recently, most people considered retention to be sort
of a best practices, tribal wisdom type of approach. We should
do thank you notes, we should do it on pink paper, and we should
do it quickly, whatever. An awful lot of myth and old wives
tales, and none of it based on any type of empirical data.
With this book, there are a series of formulas, there are a
series of approaches; we’ve identified why donors leave and
we’ve identified what donors need to stay. The interesting
thing, Steven, is that all of the retention problems except
death are controllable by the organization itself. It’s not the
donors who determine this, it’s the organization’s actions that
determine the donor’s attitude, and in turn, the donor’s
attitude determines the donor’s behavior.
So this is the one thing that an organization can absolutely
control. They can’t blame it on the economy, they can’t blame it
on competition from other nonprofits. This is entirely within
their control.
Steven: So you’re collecting all this data, you’re writing about it.
Obviously, groups like FEP and the
03:11], they’re talking about it. Obviously, people at
Bloomerang, me and Jay, we’re talking about it. Things aren’t
getting better, though, right? We’ve got seven years of FEP
reports, you’ve got all the work you’re doing, and it seems like
things just keep getting worse. Why is that? Why isn’t this
retention problem really catching on and people really focusing
on it?
Roger: Because I don’t think people are really focusing on it. I think
everyone pays a lot of lip service to it. I do a lot of
speaking, and when I speak to a group of people and I ask the
group, how many of you know your retention rate, you might as
well be playing Mozart to a cow. They simply don’t recognize it.
Many don’t even know how to calculate it, and that’s a real
problem.
The reality is, Adrian Sargeant, who works with Bloomerang, has
said over and over again, it is so much more valuable to retain
a donor than it is to pay the cost of acquiring a new donor.
Most organizations continue to play the acquisition game, and
the reason for that is it’s a lot simpler. It is easier to write
a purchase order for printing than it is to sit down and figure
out why are people leaving us? What do we have to do keep them,
and then start doing the actions that keep them and measure it
and watch the progress. It’s a lot of work, but it’s also worth
a huge amount of money.
In this book, it’s pretty clear that almost every nonprofit can
improve their lifetime value of the donor base by at least 130%
by doing some simple things. That’s a lot of money. In a big
organization, let’s say 100,000 or 200,000 donors, that’s
several million dollars. In a small organizations of 1,000 or
2,000, it’s hundreds of thousands of dollars. So it’s worth
spending the time to figure out why your donors are leaving and
the steps you need to take to hold on to them.
Steven: In your book, which you gave me a sneak preview of – really
great information in it, by the way – I don’t want you to give
away too much because I want people to buy the book, but what
are some of those things that people can do once they sit down
and realize, hey, we’ve got a real retention problem? What can
they do? Is it a donor communications issue? Is it missional?
What are some of those things people can do to start turning the
dial the other way?
Roger: Good question, Steven. In the book, we’ve identified what we
call the seven key drivers of donor commitment, the seven
universal things that organizations need to do to hold on to
their donors, and it ranges from being able to state the fact
that the mission of the organization is being achieved to
thanking donors promptly to being consistent in your
communications.
Most nonprofits really get bored by their own copy, so they
spend tens of thousands of dollars and hundreds of hours in
trying to come up with the next clever appeal, when in fact, the
same message over and over again, the continuity of these
messages, the consistency of these messages, is really what they
need to be concerned about.
The process of thanking people, while it sounds so simple, most
organizations, in fact, 60% of American nonprofits do not thank
their donors. The thank-you process is very important, and what
we’ve identified is it’s not only important to thank people, but
it’s important to do it promptly and it’s important to do it in
a personal way. By that, I don’t mean the personalization of the
donor’s name, I mean the tone of a letter or a phone call that
actually shows appreciation.
We’ve identified among the other drivers such things as showing
quite clearly who benefits from this donor’s largess, and in
fact, even showing who some of the other donors are.
People basically behave in fundraising the same way they do in
human relations. If you have a best friend, chances are that
best friend or spouse or whomever is in that status because the
bond of trust has been built between you, and trust is built by,
for example, consistency. If you promise your friend or your
spouse that you will meet at 3:00 in the afternoon at such and
such place, and you don’t show up, that’s a piece of erosion on
the trust factor. If you do it over and over again, trust is
eroded and you’re not going to build a solid relationship.
So to put that in fundraising context, if you send in a first
gift, and let’s say it’s for saving baby seals, and I send you
back an acknowledgement letter thanking you for your
contribution and this is going to be really important in
stopping the pollution of the oceans with plutonium, that is not
consistent and that erodes the trust.
Or if I send you a thank you letter, and instead of saying, Dear
Steven, it says Dear Charlie, and you call the service center of
my charity and you get a surly clerk on the other end who’s rude
and you ask to have your name corrected, and they say, well,
we’ll get to it, but we’re very busy, thank you, chances are
that you’re not going to continue your relationship with that
organization because there’s no consistency, there’s no proof in
your mind that this organization will deliver, and that is very
important.
In many ways, retention is exactly like any other form of human
relationship. In fact, the theoretical structure in the back of
this book is based on a proven concept that has been in use in
the commercial world for 30 years based on relationship theory.
What makes for strong relationships, what weakens relationships?
Even if you don’t want to read the whole book and go through all
the calculations and everything that are in there, I put a
chapter in at the end called Cliff’s Notes for Retention. It
lists the 10 things you can do that are inexpensive and quick to
improve retention. There’s also – I built a website to go with
this book, www.retentionfundraising.com, that will keep the book
updated, enable people to ask questions, have forums and share
information.
So this is a field that isn’t fuzzy, that is very specific, very
data-driven, and it’s quite easy if people concentrate on it to
make changes.
Steven: I’m always struck by how easy and simple this advice is
whenever I hear you say it or read you say it or anything from
Adrian Sargeant or Tom Ahern. This seems pretty simple, right?
All these donor communication things and relationship building
things, and yet, a lot of people aren’t doing it. Do you think
this is ever going to get any better? Do you think we’ll ever
see that 39% and 42% retention rate go up in a yearly report
rather than down every year?
Roger: Yeah, I really do, if for no other reason that acquisition is
getting so expensive and basically organizations will price
themselves out of the market. They will wither and die like a
raisin if they don’t pay attention to holding on to their
donors. The old model that was developed 50 years ago of very
inexpensive acquisition where you could simply not worry about
attrition rates, you could replace the donors who left with new
donors, that is over. The days of bringing donors in at a break
even or even a profit are long gone. Most organizations are
spending between $25 to $50 over and above what they receive in
that first gift to get a new donor, so it is absolute idiocy not
to pay attention to holding on to those donors.
One of the interesting things that you guys and gals at
Bloomerang have done is you’ve made it simple for people to
track what actions they have to take. This is communication, and
that CRM you have reminds people that there are certain things
they ought to be doing at certain times. If folks will simply
paint by the numbers, they will improve their retention rate.
Steven: Roger, this was a lot of fun. We don’t want people to wither
and die, so where can people find out more about all the work
you’re doing, buy your book, subscribe to The Agitator, where
can folks do that?
Roger: Well, thank you, and I’ll make a shameless plug. You can
subscribe free of charge to The Agitator at www.theagitator.net.
You can go on www.retentionfundraising.com and the book is
listed there. You can buy the book from that site, or you can
simply look at the site, but the website is coordinated with the
book itself, so it would help if you had the book as you work
your way through the site.
Steven: Yeah, get that book. Definitely subscribe to The Agitator. The
content is really good, but one thing I like about The Agitator
is the comments on all the articles. There’s a lot of good
discussion always happening there that you can get it on.
Roger, thanks again for being here for a few minutes and sharing
all the good news. Keep up the good fight. We’ll keep talking
about retention if you will, and we’ll turn this thing around.
Roger: Okay, Steven, that’s great. You guys keep up the good work. Say
hi to Jay and Adrian and Tom, and stay at it.
Steven: All right. Thank you, sir, and thanks to everyone for watching.
We will catch you next week. So, talk to you then. Bye now.
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