Some Personal News
#39 How to improve Donor retention. Set team goals in line with the Donor Lifecycle (not functional domains)
To every Mum reading this, thank you for all you do! To the rest of you, Happy Sunday. A very warm welcome to all the new subscribers. I’m thrilled to have you as readers and truly appreciate your feedback and support.
Let’s dig in.
5 Tactical Ways to Improve Retention
Welcome to 2023. Ad costs are rising, Meta is glitching and blowing ad budgets, apparently TikTok is getting banned, and TLDR - digital fundraising isn't getting any easier. With the constant evolution in technology and the availability of new tools one fact remains the same: it’s always cheaper to retain a donor than acquire a new one.
It’s easier said than done. Retention marketing requires smarts and time investment (and sometimes a cash investment, too). As the fundraising landscape and broader economy gets dicier we must be able to keep our VIP donor advocates close, informed and feeling deep connection. Their subscription revenue, recurring cash, and online love & support can help build brands with legs (and longevity).
Anyway, let's dig into 5 proven tactics for improving donor retention.
1. Audit Your Donor Journey, End-to-End
• The Goal: Ensure your brand/program messaging is crystal-clear for prospective, current and former donors.
• The Why: Clear messaging helps bring the "right donors” to your brand - those with the potential to become your VIP’s. Additionally, messaging clarity helps keep donors informed, engaged, and excited about upcoming programs or events with your org.
Auditing your donor journey can be a bit of a tedious process, but it's worth the effort. To complete a proper audit, review every touchpoint from first-touch (eg Facebook ads) to post conversion (eg confirmation emails and online/offline donor support like chat and phone experience).
As you explore each stage of the donor journey, look for statistically significant behavioral patterns amongst folks who did not convert, did convert but have low LTV, and those who did convert with high LTV.
Consider pulling on your product marketing hat and interviewing donors for each of the aforementioned “buckets” on various stages of the donor journey, and asking questions such as:
• What stood out to you about our brand/programs from the first day you encountered them?
• What makes our donation experience easy or different?
• What makes our purchase experience difficult or a faff?
• Is there anything unclear about our brand/programs from our ads/website/events?
(These are just a starting point for your donor interviews).
From this process, you should be able to glean some learnings to identify areas of optimization not only in your messaging, but hopefully in your donor journey experience as well.
2. Conduct Month-Based Acquisition Cohort Analysis
• The Goal: Look at the donors you’ve acquired over a particular time frame, review their donating behavior, and map that back to the various marketing campaigns/initiatives you were running at the time of their acquisition. Look for statistically significant behavior patterns to identify which initiatives led to the stickiest donors.
• The Why: If you can identify which marketing campaigns, objectives, efforts, etc result in your highest LTV donors, you should be able to work on a refresh/rinse/repeat model.
In order to do this, use a data visualization tool that allows you to compare donor behavior by monthly cohort. From there, review metrics such as acquisition cost (CAC), RPR (repurchase rate but in this case re-donation rate), time to CAC payback, # of donations over time, and LTV by cohort.
Then inhale your fundraising/marketing data (ads, email, SMS, social - all of it) starting from the highest LTV month cohorts to identify if and how to replicate that stickiness again. Similarly, it’s important to know which months or campaigns resulted in the lowest LTV acquired donors, so you can dig in to what happened there, too.
3. Dive Deep Into Your Donor Support Practices
• The Goal: Review how and why your donors are engaging with support to ensure their experiences are nothing less than stellar.
• The Why: One of the easiest ways to burn a bridge with a donor? Offer slow or dissatisfactory support.
Depending on what tool(s) you use for donor support, this can either be easy-breezy or require some serious focus time.
When analyzing your donors experience, review the following:
• # of support tickets in relation to fundraising revenue volume per month
• # of donation cancelations per month
• # of requested refunds per month vs actual
• average time to ticket resolution
• % donor support survey response rate
• donor support survey response data
If you can find patterns in the above data, you’ll unlock insights that improve the donor experience, and ultimately, donor retention. Ensuring that more first-time donors receive a seamless and informed experience can vastly improve the retention of those donors.
4. Get Serious About Email & SMS Segmentation
• The Goal: Make sure every text or email hitting your donors’ inbox is adding value.
• The Why: Perceived spam can only lead to two things - an unsubscribe, or a breakup.
There are a billion ways to approach email & SMS segmentation - and frankly, this could be a newsletter of its own. Simply stated, segmentation is light personalization, and personalization adds value.
Consider the difference between:
A) A standardized offer email from a non-profit brand, letting you know that Giving Tuesday is happening next month.
B) An email sharing what programs you’ve been running in the past year, results visualized in a graphic, a match code for an additional 10% + a section showing the journey of a “$100” donation.
Not that hard, right? One of those is definitely better to open in your inbox.
Segmentation can be built on whatever you find valuable, based on your org. In addition to standard segmentation, I like to build segments based on:
• donations to specific programs (for sending product specific recommendations or updates)
• donation reason, collected via post donation survey (for sending holiday gifting vs in-honor style comms)
• birthday month, collected via post purchase survey (for sending upsell or matching offers)
• social engagers (for encouraging them to follow brand + influencer accounts)
• SMS VIP (for sending exclusive content, programmatic updates, )
This is just the tip of the iceberg!
5. Implement “Surprise and Delight” Activities
• The Goal: Make your donors ADORE your org (and increase donor LTV, reduce churn).
• The Why: This one’s easy. For as long as they can, donors that adore your brand will keep coming back. It’s that simple.
Surprise and Delight can mean a variety of things - sending VIP donors direct ‘love’ mail, offering them exclusive access to online events, inviting them to vote on new products in your program’s pipeline, or sending digital surprises like iPhone wallpapers.
Wrapping it Up
There you have it. 5 tips for improving retention that you can start implementing this week. Even if you implement just ONE of these, good things are to come.
Set Team Goals In Line with the Donor Lifecycle
I got a question this week about managing and setting goals for various people and roles within a digital fundraising/marketing team. My answer: goals should be set per the Donor Lifecycle not around their “functional domain”.
As we’ve covered in previous editions of SPN, campaign structure, your channel testing framework and even a tech implementation should always be tied to the donor lifecycle. Digital Fundraising/Marketing teams are no exception. Individual and team goals set following the donor lifecycle are a prerequisite for the success of any other initiative you’re implementing.
Here is the suggested team structure I’ve shared before that I’ll use as an example throughout this post:
However, this team structure doesn’t reflect the Donor Lifecycle – every role is centered around its functional domain. By default (more on this “default” at the end of this post), a team like this would be given goals such as “improve Website CVR” for the Website person or “deepen the donor understanding” for the person in an Analytics role.
My problem with these goals is… they rarely work. But more importantly, they’re not connected to the organization’s goal – maximizing the funds raised digitally across all (Retail + Major) donors.
One key organizational goal we all share is to appropriately serve our donors. Team-level goals trickle down from the Organizational ones, and Individual goals must come from a Team goal. So, dropping the two intermediary steps in the above equation, the Individual goals of every team member must serve the Donor Lifecycle. I shared a similar framework when we talked about a testing framework for new channels – let’s now apply it to people.
I’m going to assume you’re running your team on a quarterly schedule of goal setting and that you have a revenue target to hit for the fiscal year. How to now break it down into targets for each team member?
Stating the obvious first - clearly communicate the target to the entire team. Such a team objective should carry the same weight for every individual as their target and be a reason to celebrate for everybody at the end of the year.
Break down your team into “forward thinkers” (Strategy, Analytics, and Platforms/Tech), “executors” (Media and Website), and “supporters” (PM and Platforms/Tech). This breakdown is vital since every group will operate on its own timeline.
I’ve written about new inventory types to test and mentioned identifying “Lifecycle Stages” at which every channel can be successful. Here’s my hypothesis for Google’s Performance Max campaigns to add to what I’ve shared before:
This is important because when linking functional areas of team members, the opposite is true – every “functional area” must participate in the success of every Donor Lifecycle stage. This statement is crucial and the main reason why setting functional domain goals is bound to fail. If you follow the “functional domain” goal-setting process, every team member has the same goal – to improve the whole donor lifecycle. Every time, every quarter. That creates conflicting priorities and a lack of desirable, measurable results to show for it.
Suppose your organization is large enough to have a digital fundraising team of 50+ people and effectively replicate the same redundant structures encompassing every functional area for each stage of the donor lifecycle. In that case, you’re acting in a different league – but for most organizations, the same person, or at least the same team, is working across the entire journey. That is why step 2 above is vital for step #3.
Similar to when implementing technology tools, determine which “step” of the Donor Lifecycle requires the most attention right now. It doesn’t have to be the worst-performing step – not always – but instead, the one with the most potential. This is the job for your “forward thinkers” group – and likely also entails determining which “segment” of donors and which audience has the highest potential within that target step.
Your "executors" then aim to improve the conversion rate within the identified step – and donor audience – by 20%.
Finally, the goal of “supporters” then becomes to ensure the above is getting done in:
the most resource-efficient way internally (PM), and
the most cost-efficient way externally (Platforms/Tech)
I mentioned these groups operating on different timelines above. Hopefully this visualization helps explain my thinking a little more:
Groups execute “in sequence” within a donor lifecycle step – going through the Identify / Improve / Minimize Cost cycle for every segment. After repeating this cycle four times a year, you’ll have four lifecycle stages improved by 20% - leading to your total revenue across the entire Donor Lifecycle growing substantially. Target achieved!
A few caveats to call out:
I’m purposefully not talking about a budget increase within any of the steps above, focusing on the CVR as the primary metric to be controlled. Budget, and therefore Volume, growth can and should be an outcome of the improvement in CVR.
I’m not calling out the Analytics group function of measuring the homework of the execution team – instead, focusing them on identifying the highest “potential” looking forward. Those highest potential areas can be the same several quarters in a row – which will likely highlight whether the Execution team are doing their best work.
Timelines above don’t have to be equal –the “forward thinkers” group can operate on a faster timeline of 1/max 2 months instead of a quarter, creating a “backlog” of opportunities for the Executors group or spending that spare time on supporting other groups.
P.S. I asked ChatGPT about managing and setting goals for various people and roles within a digital fundraising/marketing team, and here is what it told me:
…You get the gist. This is a perfect example of “functional domain” goals and given that ChatGPT is mainly learning from the information available on the Internet, it’s safe to assume most organizations are operating with these – or similar – goals.
> By framing goals around the Donor Lifecycle instead, you’ll wildly increase your chances of success.
Good Reads this Week
Thread: Epic battle of the billboards.
Smart thinking on the questions facing TV - old and new - from the guy who started Amazon Video.
Nike’s head of DTC talks about how they built a more loyal and more valuable member base who now engage with Nike more frequently across multiple touchpoints - lots of cross-industry learnings here.
At the recent 4As event Amazon talked about how you can leverage Amazon Ads for CTV. It draws on this deck from earlier in the year.
Finally we know how Snoop is thinking about AI.
The AI-generated spam sites that suck-up programatic ad budgets.
Apparently nearly half of YouTube’s US viewing is now on TVs, helping driving ad shift.
Jobs and Opps
ACLU: Head of Brand Studio
American Advertising Assoc: SVP, MarTech
American Diabetes Association: VP, Marketing Operations
Charity Water: Experience Lab Director (this looks awesome)
Médecins Sans Frontières/Doctors Without Borders (MSF UK): Media Team Lead
National Geographic Society: VP, Membership
National Recreation and Parks: Director, Marketing and Engagement Strategy
The Marfan Foundation: Chief Comms and Marketing Officer
Water Aid (UK): Digital Product Lead
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