So we have some ‘investors’- now what?
The New Lexicon of Fundraising Part 5
“One loyal friend is worth 10,000 relatives.”
We are all familiar with the normal division used in a direct marketing or individual giving teams: acquisition, development and high value; a simple way of dividing out the task of ensuring maximum value from each donor. Difficult economic times place a far greater emphasis on development, with charities realising the value of concentrating on their existing supporters and stopping them from moving on or lapsing. The commercial sector has known for years the value of existing customers and the need to keep them happy. There are so many statistics that show the cost of acquiring a new customer or donor versus the cost of retaining existing ones. Globally I would estimate that we fail to retain over 45% of our donors every year. So what are we doing wrong? What haven’t we thought about that could make a difference?
Back to our lexicon and the words we ‘fall into using’; once we have a donor we do two things in direct marketing: we service them (communicate with them) and we work towards upgrading them. We are driven by data and numbers, isn’t it truly insane to think we think that it is OK to schedule a call twelve months after a donor has given to us expecting that they will want to increase their gift as a ‘celebration’ of it being a year since they first gave! Sometimes we live in our own little world not even questioning where such ideas came from and their relevance to our donors today.
Servicing donors usually means dropping them into an existing communications cycle and sending them newsletters, updates, more appeals and usually something extra at Christmas, thus assuming they are a Christian donor! Our limited resources usually mean that we have to define a communications cycle for donors where generally ‘one size has to fit all’. I realise that data mining, smarter segmentation and other data tools do change this to some degree, but we are still fundamentally ‘servicing’ donors and working to a time when we can ‘upgrade’ them.
Building on the idea that our job is to inspire people to gain their support, as opposed to just ‘recruiting’ them, maybe we should think about ‘guiding donors’ rather than servicing them? It is more proactive and there is logic to the idea that we should be offering them opportunities to explore new communication channels, formats and content, not to mention other propositions they may want to consider investing in. Once a donor is on board our job is to champion their interests within our organisation and to act as their ‘guide’ in the world of philanthropy, meeting their needs as much as our own. Most of us agree that the idea of a donor journey is a useful conceptual framework that forces to think through how we can grow the engagement of the donor, perhaps towards a relationship or a sense of belonging from the donor. In reality there is no journey and the donor will choose to do whatever they like, but with a proactive ‘guide’ they may just take another step forward in the way they think about and relate to the charity.
Upgrading is our equivalent of the commercial ’upsell’. The process whereby you buy the larger size, the extra benefits, the package, etc.; in sales this term has been around since the beginning of time, but are we really in the business of mechanically moving people to just give more, more often or in different ways? By thinking of upgrading we are not thinking about building the donors interest, insight, joy and knowledge to the next level where, if they are able to, they will want to repeat, increase or reformat their giving; upgrading is something we plan and budget for, but it is driven by us and not the donor.
With some donor groups we need to be braver and work on a basis of allowing the donor to ‘graduate’ to higher levels of giving and support. This places the emphasis back on us to help the donor graduate by communicating in different ways, reaching out for dialogue not monologue and simply trying different things without always working towards the next ask. This isn’t simple, but with the many channels now available it is within our reach for select groups of donors and, who knows, in time we may be able to develop a smarter approach for the whole donor base.