Introducing the Donor2multichannel retention system
It is no secret that donor retention is a top challenge facing fundraisers today. When setting a direct marketing budget or defending investments to major stakeholders, retention is the 800-pound gorilla in the room. Data shows the problem is only getting worse.
“Over 70% of people that we recruit into organizations never come back and make another gift, so we’re caught on this treadmill where we have to spend lots of money on acquisition which most nonprofits lose money on anyway, just to stand still,” says Dr. Adrian Sargeant, professor of fundraising at Indiana University.
Low retention rates bleed fundraising programs dry by destroying the capacity to generate sustainable revenue. Nonprofits committed to getting off the treadmill can expect big returns. Increasing donor retention is a powerful priority due to the multiplying effect on future revenue.
Yesterday, Innovairre launched Donor2 as a new system nonprofits can use to improve retention rates for greater lifetime value. Donor2 is a multichannel communication solution that leverages the power of donor retention to improve overall fundraising performance.
The financial case for investing in retention is crystal clear
According to the Chronicle of Philanthropy, nonprofit organizations are making poor investment choices by “putting too much effort into constantly replacing large numbers of donors who never make a repeat gift when they should be making investments that would provide significantly more fundraising return in the long term.”
By focusing on the lowest cost acquisition tactics, charities are hemorrhaging money in other areas, primarily due to new donor attrition.
The retention investment gap is so large that the Association of Fundraising Professionals released this guide to coach nonprofit executives through the business case. The report calls for doubling down on tactics that reverse losses related to attrition.
The financial rationale is crystal clear. Modest increases in retention — just 1%, 3%, or 5% — yield substantial increases in lifetime value. Achieving a 10% increase in retention rates (a return to the industry average of several years ago) produces a 200% increase in lifetime value.
While developing the Donor2 system we had a breakthrough moment when we figured out why so many nonprofits underinvest in retention to begin with.
Retention is a journey of new metrics, tactics and complexity
According to Dr. Sargeant, donor loyalty is a journey consisting of multiple touch points, strategies, and channels. Communications must be delivered in a way that builds trust and engagement, resulting in repeat giving.
Other nonprofit thought leaders agree that there are a multitude of drivers impacting donor loyalty. It is all very logical, but several challenges arise when budgeting and executing.
For example, what cost and revenue numbers should nonprofit managers budget for tactics such as “increasing donor engagement?” How do you prove the ROI of “authentic engagement” or how “sharing stories of how your donor’s gift is making a difference” will impact LTV?
Sargeant’s loyalty research confirms that nonprofit staff and boards must “buy-in” to a process to understand the impact that improved retention will have on database lifetime value. Without a clear roadmap and budgetary data, the actual process can seem nebulous.
Donor2 clarifies the touchpoints that matter most to ROI
Innovairre developed Donor2 to eliminate the two giant hurdles nonprofits encounter most often when tackling critical retention challenges:
- to help nonprofits visualize and achieve the financial ROI associated with lightning fast, personalized, authentic communications to new donors in multiple channels
- to automate the execution steps organizations struggle with the most due to tight budgets and fundraising data silos that do not talk to each other
Achieve stronger retention and engagement in a matter of weeks
The Donor2 system takes the guesswork out of thanking, onboarding, and obtaining multiple gifts from new donors. The solution combines big data, tried-and-true fundraising principles, and automated execution, both online and through the mail. Using some simple steps, the donor loyalty journey becomes more predictable, more scalable, and more affordable to nonprofits of all sizes.
Nonprofits simply provide a feed of new donor data to Innovairre. Donor2 does the rest:
- We gather very basic data on the fundraising program: current retention rates, acquisition plan, fundraising impact data, and existing marketing materials.
- The Donor2 Budgeting Tool shows exactly what to expect from the program: cost per donor, new revenue, ROI, and lifetime value impact.
- New donors (both online- and offline-acquired) are imported into the Donor2 platform in real time. Innovairre applies big data intelligence to build a unique profile on each new donor that we use to tailor Donor2 communications.
- New donors receive an immediate “thank you.” Real handwritten direct mail goes out within 24 hours of receiving a gift.
- By email, new donors receive an instant “thank you” including state-of-the-art personalized video — a technique that drives unprecedented click-through rates and promotes social sharing.
- New donors receive a thank-you phone call from a real person for an unexpected and extremely effective stewardship experience.
- An online welcome kit provides multimedia proof-of-impact accompanied by opportunities to connect and share on social media.
- Donors visually experience the impact of their gift through to one-to-one personalized email and direct mail newsletters — deployed within days of their initial gift.
- New donors receive a highly personalized renewal appeal by mail and email within five weeks of their initial gift. Innovairre applies hundreds of data points to customize this “rapid renewal” campaign for each organization’s mail plan.
- Social media display ad campaigns bookend the Donor2 program, increasing brand awareness and promoting online engagement from day one.
Donor2 includes creative and strategic support from Innovairre
Innovairre customizes Donor2 for each nonprofit with dedicated end-to-end strategic support. We’ve invested in all of the technology tools and talent to execute fast, personalized, authentic, and engaging communications with zero overhead cost, zero setup costs, and no long-term commitment for nonprofits.
New donors become loyalists when they see, feel, and understand their impact
Our data shows that donors who make a second gift within 90 days are three times more likely to become loyal, multi-year donors than those who do not. Donor2 simply combines and accelerates all of the essential steps to secure loyal support from new donors.
Customized marketing automation is the magic that makes it all possible. To ensure authenticity Donor2 is fully tailored to each organization’s messaging, existing donor care activities, and acquisition strategy.
Advanced donor data augmentation, digital print, and online technology make Donor2 a cost-effective solution. Our approach to new donor communications minimizes the administrative burden on busy nonprofits as well as the overhead costs that often stand in the way.
Dollar-for-dollar, retention is the most prudent investment nonprofits can make
Reversing escalating fundraising costs begins with investing in multichannel retention from the onset of each new donor relationship. Donor2 helps organizations reduce dependency on costly high-volume acquisition by retaining more new donors.
We built Donor2 with the philosophy that retention is the new acquisition. The system solves the crisis of complexity and uncertain returns that have stood in the way of meaningful investments in building donor loyalty.
– Chris Moore is Executive Vice President of Data Services at Innovairre. For answers about getting off the acquisition treadmill, contact us at Answers@Innovairre.com.