Most charities struggle with donor retention -- the larger you are, the more likely you are to have lapsed supporters overshadowing your active ones. Larger charities that rely heavily on direct fund-raising channels also often attract the wrong type of donors. Supporters that are signed up on a whim suffer buyer’s remorse (especially since there isn’t a physical product to keep them engaged), and many cancel either before the first direct debit has even left their account or soon after.
To know whom to target, charities need to determine which types of individuals will be the most committed and valuable to their organisation. They need to know what good donors look like. Charities can use the supporter data they already have to determine what their highest-value donors look like from a geographic and demographic perspective. Knowing whether supporters are affluent or from a community that may understand the problems the charity addresses will help them establish high-level propensity. Once they know where to find likely supporters, planning future acquisition campaigns becomes easier and you can focus on how you acquired those donors as another important parameter affecting Lifetime Value.
The acquisition channel can be crucial. A person who actively seeks out a charity’s Web site and then signs up to donate by direct debit will typically have a higher lifetime value than someone who signed up by being asked on the street. Their pre-donation journey more closely resembles the typical ‘AIDA -- Awareness, Interest, Desire, Action’ buying process, which means they have a lot of time to think about their decision, and buyer’s remorse (and the cancellations that come with it) will be less likely. Understanding what drives these donors to the site and scaling up this volume can be very effective.
Likewise, donors who support a charity in more than one way, for example -- such as monthly donations, volunteering and participating in events -- are almost always more valuable to an organisation.
As charities now have so much data from former donors the organisation has invested in acquiring, almost all will have standard reactivation programmes. These often make use of a recency/frequency/value (RFV) model to target who is most likely to re-start their support. However, more sophisticated charities supplement their reactivation programmes with content campaigns designed to gauge a lapsed donor’s interest in re-engagement -- this data is then used to better target reactivation telemarketing or direct mail efforts.
Lastly, it has to be said that while many charities do have de-duping, cleansing and matching processes that run before major campaigns, cleaning up a database periodically isn’t good enough. Donors generally see a charity as one organisation -- despite engaging with it in different ways. So when they tell one department that they, for example, no longer want to receive anything by post, they expect the entire charity to stop sending them digital appeals immediately. Integrating the systems and using a single campaign management tool for all departments helps avoid breaches of data protection.
Charities with a proper data management strategy in place will be able to better target higher-value donors. They will also be able to reactivate more of their lapsed supporters and maximise the value of their existing data sets. They already have much of the information they need to be successful, but proper database management and analysis is often lacking. They have to integrate their systems and improve their data analysis to effectively increase their support -- and this must be driven top-down by senior management.