How to focus on donor retention

Solid retention efforts are built on churn-control foundations.

Lots of time spent by fundraisers at nonprofit and stations relates to donor acquisition. These organizations face a continuous need to reach out to prospective donors and build up their bases, so it makes sense that donor acquisition is so often top of mind. 

However, in addition to this focus on signing up new donors, decision-makers must also commit resources, labor, time and effort to donor retention. Though the spotlight may always be focused on donor acquisition, stations risk real negative impacts if they don't approach retention with the same fervor and dedication. After all, no matter how many new donors join as part of a campaign, the station isn't going to benefit as much as it possibly can if half make a one-time donation and never re-engage.

Now, there's only so much within a station's control when it comes to retention. If a donor has made up their mind, they can't — and shouldn't — be forced to change their decision. Still, stations must take advantage of every tool and avenue of communication they have to boost donor retention. Here's where to start:

Understanding churn

The first thing to accomplish when addressing donor retention is becoming familiar with churn, which is an essential metric for stations to track. It's relatively simple: Churn is the percentage of donors who don't return (or your number of donors lost divided by the total number of donors). Tracking churn can give you insight into trends that impact your donor base that can inform your strategy and outreach. For instance, if churn spikes soon after campaigns conclude, it's a clear sign that retention is likely costing your station revenue.

But churn goes a bit deeper than that — i.e. there are two main types of churn to become knowledge on:

  • Active churn is when an individual consciously decides to not donate again. Stations may be sad to see those donors go, but often the outreach doesn't end there completely.
  • Passive churn, however, is when something beyond either party's control interrupts continued donor status. For example, expired credit card information may cancel a reoccurring monthly payment that was intended to be made.

Churn plays a basic role in each decision you make about retention. Containing it and improving retention comes down to taking strategic action, which stations can accomplish by:

1. Gathering and utilizing data

The key to beating churn could be held within the data on donors, activity and campaigns each station holds. This is a gold mine of information that can help show you path forward to improving retention by unearthing new insights or plotting the intel out so trends are unmistakable. As mentioned, seeing churn spike repeatedly during certain parts of a campaign cycle may indicate there's a problem. What exactly that challenge is can't be identified until you look at the data and put it to work.

"Operating out of spreadsheets or using a sub-par solution makes retention a challenge."

2. Personalizing appeals  

There's no reason not to personalize donor communications now. Not only do stations with the best donor management solutions have the capabilities to do so, but donors increasingly expect their interactions to be informed by their history as a donor and other factors. It's one thing to use the donor's first name to introduce an email, and another to enhance the experience by appealing to their preferences and through the appropriate channel.

3. Always saying thanks

Stations know how much they depend on donations, but donors aren't always sure of how valued they are. Leave no room for error by always remembering to say thanks after engaging with a donor or receiving a gift. While expressing your gratitude is a no-brainer in such situations, it may be less clear to you to say thanks after a donor decides to leave. While a door is closed, it may not be locked, and showing your appreciation in such an instance will reflect well on your station and let the donor know even if they're valued even if they're departing.

4. Being proactive

Improving retention means getting ahead of churn. So, for instance, If credit card malfunctions prove to be an enormous headache for your station, some changes to policy and outreach might be needed. You may need to send out quarterly or twice-a-year emails to donors reminding them to be sure that all the information in their accounts is accurate. Sitting back and waiting for churn to work itself out is never a good idea, and almost always ends up costing revenue in the long run.

Another consideration in donor retention is the quality of software stations are working with. If you're operating out of spreadsheets or a sub-par solution, retention and churn control become all the more challenging. Talk to Allegiance Software today for more information about our donor management platform and how it can contribute to you finding new ways to boost retention.