The lack of alignment between fundraisers' volume-driven business model and individual donor motivations and experiences is what leaves charities battling poor retention rates, says Kevin Schulman of DonorVoice.
Volume seems to have stepped in to become the defining trait of donor centricity: if you send a lot of solicitations, you’re not donor-centric. If you send less, or want to, or are open to it, or don’t reject it out of hand … you’re on your way to being more donor-centric.
However, one prominent charity that claims to epitomise donor-centricity actually increased the number of annual mail solicitations from 24 to 27. How to justify sending more in the name of being donor-centric? Enter the “relevance” red-herring – often a built-in excuse to keep doing what one is doing.
Sending 27 DM appeals in a year is a massive waste of money, and yes, we know appeal 25, 26 and 27 all netted money. Sending more raises more, with sharply decreasing ROI each time, and it cannibalises from future donations. If you send 6 appeals and get 1.5 gifts a year and think you can send 12 and get 3 the next year, you will be profoundly disappointed.
Another charity did a year-long test with a 65% reduction in asking that resulted in almost the same total revenue and more net. Importantly, they advertised this change to folks upfront to explain the change and rationale – namely that they heard and were being responsive to donor complaints. This sensitised donors to the new reality, and they adjusted their behaviour to give roughly the same amount despite 65% fewer requests.
Donors want to donate. They don’t want massive frustration and irritation in doing so, which is precisely what volume causes.
The deceptively simple answer to how to ask less and make more is to give donors what they want and stop giving them what they don’t. What if your entire business were built around answering the following types of questions and then building out product, offers, communications and, dare we say it, journey based on this intelligence?
· Is your online donation process easy?
· What was the quality of the recruiting process?
· Is the “welcome” reinforcing their decision to give?
· Is the ‘thanking” making them feel valued?
· Did the call with the donor service rep fully address their concern?
· Did the e-appeal or direct mail piece reinforce their identity?
If you can’t answer these questions, your charity is not donor-centric. And don’t pretend you can answer them with behaviour data. You cannot.
The logic is simple and irrefutable. Your donors have identities that explain why they chose to give to you. Ignore that and donors will quickly realise your charity has no sense of who they are or what they want.
They are also having experiences with every interaction they have with your business. These include pedestrian things like the registration process for Event X as well as actually participating in Event X. These experiences matter; they’re being mentally registered by your donors and totally unaccounted for by your business.
This lack of alignment between your business model – volume – and their motivation and experiences is the reason for lousy retention. This is mind-set, and mind-set drives choice.
Your charity most likely has chosen to make the ask your economic engine. Making that “work” doesn’t require knowing anything other than some limited past behaviour to make some slight efficiency improvements for future volume.
In your current reality, the ask deserves very little credit in actually raising money (16% by our attribution models) and more of the blame for current world order. The donor is giving in spite of the asking machine, not because of it. Simply reducing the volume and speed lessens the irritation but doesn’t do anything to get at motivation or the myriad of other, non-volume-related experiences playing out every day. Your business model and why they give (and stop) are still out of whack.
Kevin Schulman is founder and managing partner at DonorVoice. In October, you can find him at the 2016 International Fundraising Congress, where he’ll present a masterclass on “Reinventing the Donor Experience” with Adrian Sargeant. Find out more at IFC 2016.