78. Some Personal News (SPN)
DEEP DIVE into Post-EOY Retention + Mastering the Agency Pitch Q&A
A very warm welcome to all the new subscribers. I’m thrilled to have you as readers and truly appreciate your feedback and support.
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In Today’s SPN
The importance of the Q&A during an Agency Pitch
Agency review - tips for agencies and Org’s
Deep dive: Retention and increasing LTV is where all of the real money is made
Segmentation, tools and tactics
Introducing Cost of Losing a Donor (COLD)
Housekeeping: I’ll next see you on Wednesday December 27th for a mid-week, Holiday-week edition!
Let’s dig in.
Agency Pitch Q&A’s
Picture this: An Agency review is underway, and it’s now time for a Q&A session for the Agency with your Org’s marketers.
This is an important moment for both parties.
Your Org gets to see how the Agency team handles themselves and has a chance to hear the quality of the questions asked by the Agency. The Agency has an opportunity to gather critical information that can shape how they arrive at the most compelling recommendations.
Many clients and Agencies consider this step a perfunctory and almost administrative effort. That’s a mistake. The right approach to a Q&A can help an Org better understand the quality of the Agency team’s thinking and can help the Agency team stand out.
Clients and Agencies should approach the Q&A as a critical step in the process. It’s a high leverage touchpoint for both parties and should be treated as such.
Tee Up Agencies for Success
I’ve had the tremendous good fortune to work with outstanding Agencies. Last Sunday’s SPN #77 talked about if/how/when to in-house vs outsource. It got me thinking about Agency reviews and pitches.
Having hosted plenty of these, with a few already on the horizon in early 2024, I’ve penned some lessons learned that I hope you might find good value.
Marketers and fundraisers are best served if all the Agencies vying for the business are empowered to deliver at their absolute best. Tee them up for success. A well-designed Q&A session can help.
Tips for Nonprofits:
- Refrain from asking the Agency (m)any questions. You’ll have plenty of opps to do this during the Pitch process. The Q&A is the Agency’s time to learn as much as they can about you and your programs.
- Prepare in advance: familiarize yourself with the Agency.
- Give each Agency their own Q&A session. This kind of session provides Org’s with a clear view into the Agency’s process, thinking and experience.
- Identify an emcee. There should be one key participant that determines who from the Org team answers which question.
- The Org team should each introduce themselves. Keep it short - just name and role. There’s absolutely zero reason for these intro’s to drag on and last 30 mins!
- Someone from the Org team should provide a very brief overview as to why the review is underway. Don’t make this s long presentation with numerous slides; important background information should have been shared in the RFP.
- Be sensitive to the Agency’s allotted time. Provide one answer to a question; no piling on.
Org Expectation Setting/tips for Agencies
You may find it helpful to use some of these bullets below in an “expectation setting” one sheet or requests that you circulate to the Agency before the Pitch Q&A.
The Q&A needs to be treated as an important step in the review. This is a precious time for the Agency to highlight strategic skills and expertise by asking informed questions. Agencies that come prepared and ask questions to learn and understand - for example about the brand, current go-to-market approach, about your numbers and results to date - will 1) do themselves a big favor and 2) likely impress.
Tips for Agencies:
- Craft your questions in advance and share them with the Org at least 48 hours before the Q&A session.
- Share a “placemat” in advance, with the Agency pitch team’s pictures, role in the business and brief bio’s.
- The Agency team should briefly introduce themselves. Again, name and role in the business is sufficient.
- Ask questions that aren’t easily discovered by secondary research. What’s been working well in marketing and paid media, and what hasn’t been working? How do they think about segmentation, how do they think about brand and how connected is it to fundraising or what’s their understanding of their current and prospective audience?
- Ask for access to recent research or analyses.
- Don’t talk about your capabilities or past successes; this is the time to learn about the Org.
- Have assigned roles for the pitch team during the conversation. Leadership should open and close; that’s all.
- Be brief. Put in enough prep time to ensure your questions are both strategic and what you’re asking can be easily understood.
- Know when to stop (don’t let the Q&A go on too long).
- Ask permission to record the session.
- Don’t ask process or admin questions during the Q&A. You can follow up with that stuff via email at a later point.
Lastly, the Q&A session is not only about the Questions and Answers.
It’s a key opportunity for each party to put their best foot forward and create the foundation for a trusted, empowering relationship. In my experience they can also be a lot of fun and you learn a ton. Highly recommend!
Retention is Your Growth Unlock
Retention and increasing lifetime value is where all of the real money is made. Word of mouth, for instance, is nice-to-have yet all focus should be on retention.
There are fewer ways to do retention marketing wrong than there are to do it right.
To level set - only remembering about your Org’s donors when you need another donation from them is wrong. Blasting their inboxes with red-button-donation-CTAs is wrong. And counting on them to retain following your average churn rate is ill-informed, at best.
In the next two weeks, Org’s will see an influx of new donors – most of whom will be gone until (best-case scenario) the next EOY season. We can do them – and ourselves – better.
Thinking of ways I saw retention done right – or at least most effectively - I turned a list of notes from previous tests and successes into this post below, vaguely organized into Low Hanging Fruit, Donor Data, Analytics, and Donor Experience categories.
I haven’t seen most of these ideas explored elsewhere and I hope they’re incremental for you. While some are more complex to put in place, I hope you find an idea or two to get a stubborn churn rate down in the new year.
Retention Marketing Tool Kit
Org’s have a few key levers they can pull when it comes to retention marketing. These are the ones that immediately come to mind:
Email programs
SMS programs
Mobile apps
Retargeting ads
Loyalty and monthly donation programs
Educational content
Reminder content
Surprise and delight Matching and gifting
“VIP” experiences
And the use of data and technology to proactively predict potential churn
Each of these marketing activities play an important role in increasing retention and LTV. Most Org’s that I see do 2 or maybe 3 of these well right now, and there’s a real opportunity to build THE retention playbook. Of course you need to have the skills and resources to execute well, but it’s an investment with a real ROI.
Low Hanging Fruit - Email & SMS
The name of the game when it comes to retention and reactivation in the world of Email and SMS is “Segmentation.”
Depending on the specific donor cohort, you need to segment your comms and campaigns to be as relevant as possible to the end recipient. Start with creating a segment of donors who have only donated to your Org once. Send them a custom email and SMS campaign with a unique Match code incentivizing them to donate again every 3 weeks until they do. Stop the flow after they convert.
If you want to go one layer deeper, start segmenting campaigns based on parameters like geographic location or program/cause.
Segments are one of the most powerful tools that Org’s can use to make campaigns and offers feel as relevant as possible, which ultimately leads to higher conversions. The more specificity and customization you have with your marketing here, the better.
TL;DR: The more you can slice and segment your list, and create custom content toward them, the better.
Donor Data - Surveys
Whether we like it or not (and it’s tough to like), in about two years marketers will likely have to deal with 50 versions of Consumer Privacy Acts and multiple sub-regulations limiting web tracking, processing of existing data, requests of deletion, and other Bills making existing tracking an unbearable risk. And that’s not including any AI regulations or EU laws.
Org’s wanting to have a shot at data-driven retention must lean into the only data source that’s “safe” in any environment – direct response from donors or so-called “zero party data”. Good ol’ surveys asking donors directly why they donated right after their first donation, what topics they feel mostly affiliated with, how well they think the Org is stewarding their money, and why they decided to stop donating after they lapsed from a recurring program, become more relevant than ever.
Paid media channels make conducting these surveys a much easier exercise. Meta and Instagram allow for survey ads as one of the default formats. Most programmatic platforms accept HTML5 creatives as assets, which can include web versions of surveys without requiring donors to visit the website.
One metric I borrow from the for-profit industry playbook is Net Promoter Score (Donor Happiness). Introduce a simple 0-10 survey to donor’s and ask about their experience/satisfaction after every viable interaction with your Org or at specific periods.
The best part? Serving these surveys as part of a donor experience not only collects much-needed data but improves retention rates.
Analytics - Cost of Losing a Donor
The most used metrics for retention are Churn Rate, Retention Rate, and Lifetime Value (LTV). Another one I love is the Cost of Losing a Donor. It’s got a suitable acronym too (COLD)!
For example, if your average retention cycle is 12 months and the monthly donation value is $10, losing a donor after month three costs your organization $90. After month 6, it declines to $60 – and so forth. But that average retention cycle is not a given – it’s a twisted measure of the likelihood of retaining a donor each month as a loyal member of your donor base.
So, if the RoAS your Org is targeting is 5:1 – your retention marketing budget should be at least $2 per every donor who donated 11 times since the cost of losing every one of them would be $10 or 5x$2.
In the above example, I used 11 months as that one month before donors are “projected” to churn based on the average retention. But the average is far from the ideal and the budget for retaining donors likely to churn after their first month should be even higher. A simple way to analyze it is to look at cohort donor retention metrics.
Netflix – and other subscription-first businesses – do it better than most. Their trick is to organize users as cohorts of:
Audience (can be as simple as demographics, evolving into better, enriched data over time)
Channel they were acquired through
Content they first converted on (in nonprofit Org’s, this is represented by the pillar they first donated to)
Looking at churn and retention metrics through the lens of these cohorts will allow you to better understand the Cost of Losing a Donor in every cohort – allowing you to far more accurately plan the retention budget.
This cohort-based view hits on another key objective. More often than not, churn is the outcome of bad acquisition. By enhancing your cohort definition with, for example, a landing page that donors first donated on, you’ll establish another way of defining the success of website testing or launching a new acquisition channel through the Churn / Lifetime Value lens.
By tracking each cohort’s behavior over time, you’ll see the direct impact of every change made to the website – and if you have a data partner, you can also predict it. And that’s what every marketer is looking for – an ability to estimate the result of every test ahead of time!
Donor Experience
As shared most recently in SPN #44, I’m a huge fan and advocate of introducing the role of Chief Experience Officer into the nonprofit space. Here are a few examples of how I’ve bettered donor experience – and increased retention:
That first donation matters the most and strongly influences if the donor is ever coming back. Make it feel special! Here’s how: take new EOY donors off any retargeting, email, or direct mail lists immediately until the end of the year so they don’t get any donation requests – instead, wrap them in gratifying surround sound across all channels.
Most Org’s already send Thank You emails – take that to the next level by serving them similar Thank You ads across paid media channels, with no CTA attached. See above the case for the “Cost of Losing a Donor” metric – these ads would be a disaster for your acquisition RoAS targets but would result in lower churn.
Reward loyalty. Whether it’s Starbucks’ mobile app or Amazon’s Prime program, the best loyalty programs in the D2C world share one trait: they reward longevity. Donors want to maximize their impact and Match is an excellent tactic for doing so. Most (larger) Org’s have a Match budget usually used for all donations within a specific timeframe or for one-time, new donations. But that can induce the same behavior that the Telecom industry suffers – consumers shop around Verizon, T-Mobile, and AT&T transferring their number whenever possible to get that “new customer” deal.
Test matching pledge/monthly donations for a given period - incentivize them to come back – and sign up for a recurring plan. I’d treat this as part of my retention marketing budget if I was at a smaller Org without a dedicated Match pool.
Impact reports. Most Org’s already provide annual reports to their donors, highlighting the total impact made by all donors and specific donor’s contribution. Spotify Wrapped and (new this year) Apple’s carbon copy of it for Apple Music are both solid examples.
Most impact reports are physical assets delivered by mail – which works great for older cohorts. For younger donors, consider producing a dynamic landing page tailored to every donor’s contributions – and driving traffic to it by serving the same “Impact Ads” with no other call-to-action as a part of your retention budget.
That’s all for this week
What else are you doing for retention? Reply to this email and let me know, I’m curious what has worked well for you? Don’t hesitate to ping me with any questions or clarifications. Thank you to those that do!
And, don’t forget to check out our sponsor Feathr’s platform.
I’ll next see you on Wednesday December 27th for a mid-week, Holiday-week edition!
Happy Holiday’s! And now onto the fun stuff -
Reads of My Week
MrBeast’s Analytics Platform ViewStats is Out in Beta.
Why advertisers are excited about attention metrics.
Attention as a Service for Advertising Outcomes.
The media battleground: linking attention metrics to business outcomes.
As attention grows up, agency rebundling is one unintended result.
And lastly, a tank museum in Dorset (UK) made £2m last year from online activities, including YouTube and TikTok channels. A £2,000/year subscription buys you ‘Field Marshall’ status, which includes Executive Producer credit on every video.