How Customer Retention Transforms Your Business
June 23, 2022 |
October 14, 2019
What would you say is the most important idea or concept a nonprofit can express to its supporters? How your organization is making an impact in the world? How donations are being spent? How donors can give?
The most important thing you need to say to your supporters is just two simple words: Thank you!
A study asked non-profit donors who’d previously made an annual gift between $250 and $2,500 to a cultural organization – and then did not donate again within 24 months — why they stopped giving.
The number one reason listed for not donating again? “Not being acknowledged or thanked for the previous gift.”
As this study shows, the way in which you recognize donors is too important to be left to chance. To retain donors year over year and ensure the continuing health of your organization, you must have a strategic donor recognition program in place that explains in detail how your organization will express gratitude to your donors in a fair, consistent, and appropriate manner.
There are 5 steps to follow when building a non-profit donor recognition program.
As you go through the process of building this program, remember to keep a relationship-first mindset. A donor who is only able to give a small gift today may turn into a bigger donor tomorrow. Likewise, a new subscriber to your email list may just be one nudge away from becoming a loyal recurring donor. Every supporter, regardless of the size or frequency of their financial gifts, should be nurtured and made to feel appreciated.
Your organization’s “Why” is the reason you exist. It’s your vision, your passion, and the opportunities you have to change the world for the better. Your “Why” is what connects you to the heart of your donors and ultimately inspires them to give. The “Why” of your organization goes beyond the “What” of what you do.
Consider a large charitable organization like Habitat for Humanity which is highly successful in garnering not only financial support from its supporters but large in-kind donations as well. What Habitat for Humanity does is build affordable homes. That’s a noble endeavor but it doesn’t tell the people who live in and around the area in which these homes are built how this activity benefits them. That’s explained by the organization’s “Why.”
What Habitat for Humanity does: Helps families build and improve places to call home.
Why they do it: Affordable housing plays a critical role in strong and stable communities.
Do you think a supporter would be more inclined to give after understanding the organization’s “Why?”
After you’ve identified and clarified your “Why,” the next step is creating donor personas.
Here at PHOS, when we first begin working with a client, we ask them to describe their ideal customer/customers. Once we’ve collected valuable data about their customer’s wants, needs and behavior, we create a “buyer persona,” a fictional customer profile that includes all of those concerns, interests, and behaviors.
Non-profit organizations can benefit greatly from this exercise as well. Before crafting a donor recognition program designed to communicate your appreciation to supporters, it makes sense to have a clear understanding of who your supporters are, why they give, and how they want to be recognized.
To begin this exercise, you’ll want to group the total group of supporters you’re trying to reach by category. Here are some possible market segments you might want to consider starting with:
Within each of these categories (or market segments), you’ll find a wide range of individual customer personalities with different likes, dislikes, motivations, and preferences. The more you know about each group, the better target your outreach efforts to align with their needs and wants.
Let’s start creating a buyer persona for someone in the first group, someone who shares your organization’s burden and vision but hasn’t donated yet. This individual has taken the first tentative step of supporting you by agreeing to follow your updates on social media or receive your monthly newsletter. At this phase of the supporter’s journey from a prospective donor to a loyal supporter, he or she doesn’t have a high level of trust in your organization yet. They need to know more about you. Where will their donations go? What is the fiscal health of the organization? When you communicate with someone in this group, your job is to build a relationship and increase trust. (This is also true for new one-time donors.) You might even want to assign a name to this donor persona like “Newcomer Nancy” to help you imagine talking with her about her concerns and interests. And don’t forget that Newcomer Nancy needs to feel appreciated and valued for agreeing to receive those future communications. She may not have given to you monetarily yet, but she’s giving you her time and attention, and that’s worthy of acknowledgment.
Contrast “Nancy Newcomer” with someone who belongs in the Major Donor/Loyal Donor group. We’ll call him “Recurring Richard.” Recurring donors feel confident that their money is being spent wisely, otherwise, they wouldn’t continue to give. Here, you’ll want to focus your communications on making Richard feel appreciated and valued and providing him with regular updates on the projects his donations helped fund as well as new, similar projects in development.
Once you’ve created a donor persona for each group, you’re now ready to establish specific, actionable goals for your donor recognition program.
Now that you’ve defined your “Why” and have clearly identified the different categories of supporters you’d like to reach with your marketing and donor recognition messages, it’s time to give clarity to the program goals. What do you want the program to accomplish specifically?
How will you measure success?
Here are a few metrics you may find helpful to discuss with your board members and stakeholders as you establish goals for your donor recognition program:
Once you’ve established the goals for your program, you’re ready to craft a formal plan.
At this stage in the process, you will detail the procedures and policies for acknowledging and recognizing donors at each level of giving.
You’ll want to ensure that your plan includes the following:
Keep in mind as you craft this plan that not all donors are motivated by public recognition. For some donors, being offered something (like a gift) in exchange for a donation actually reduces the feelings of altruism that contributed to the initial donation. That doesn’t mean they don’t want to be acknowledged privately for their contributions, however. For these donors, a letter or a personal visit might be more appropriate.
You’ll also want to build a regular review process into your donor recognition plan which includes periodic surveying and the solicitation of donor feedback. This is not only a good way to continuously improve your donor recognition program but it makes donors feel their opinion counts and builds relationships.
Your donor recognition program should be re-evaluated as often as your organizational needs change or at least once a year.
Solicit valuable feedback from each of your donor groups and ask them questions such as:
As you follow these five steps, remember that the words you use with your supporters matter. At PHOS, we understand the power of messaging. We would love to:
How can we help you fulfill your mission?