7/30/2013 Customer & Market Insights 1

RETENTION

Chuck Longfield, Chief Scientist, Blackbaud

July 29, 2013

7/30/2013 Customer & Market Insights 2

AUSTRALIA IS THE MOST GENEROUS COUNTRY IN

THE WORLD

7/30/2013 Customer & Market Insights 3

• Finding new donors is difficult and expensive.

• Growth in number of Regular Givers from 2011 to 2012 was 4%. This was

was significantly lower than the growth from 2007 to 2008 (~14%).

• Cost to acquire a new donor is 6-7 times that to retain an existing donors.

• Top 18 Australian charities had a massive 1% change in the number of

donors on file. They lost 28% and gained 29%!

>>> We estimate they spent over $60m to basically stand still.

• According to the 2012 SONI survey, of Australian donors

- 35% were willing to support 3+ charities with one-off gifts

- but only 16% were willing to support 3+ charities with regular gifts

• Young donors are less loyal than older donors

RETENTION VS ACQUISITION

7/30/2013 Customer & Market Insights 4

S O W HAT S HOUL D W E DO?

7/30/2013 Customer & Market Insights 5

EMPHASIZE DONOR RETENTION OVER ACQUISITION

7/30/2013 Customer & Market Insights 6

7/30/2013 Customer & Market Insights 7

• View current donors as valuable assets! Acquiring a new donor is not a fair trade for losing a current donor. 85% of existing, Regular Givers were retained but only 58% of new, Regular Givers* 65% of existing, Regular Givers were retained but only 27% of new, Regular Givers* * 2011 donorCentrics analysis of large, multi-national, Australian non-profits

EMPHASIZE DONOR RETENTION OVER ACQUISITION

7/30/2013 Customer & Market Insights 8

• When acquiring new donors, factor in whether you will retain the donor, and at what dollar level 2013 Australian donorCentrics First Year Retention Rates: 41% - Single Gift, Mail Acquired Donors 25% - Single Gift, Web/Digital Acquired Donors 7% - Single Gift, Event Acquired Donors 49% - Regular Gift, Face to Face Acquired Donors 77% - Regular Gift, DRTV Acquired Donors 78% - Regular Gift, Web/Digital Acquired Donors

EMPHASIZE DONOR RETENTION OVER ACQUISITION

7/30/2013 Customer & Market Insights 9

7/30/2013 Customer & Market Insights 10

• View donors as valuable assets!

• When acquiring new donors, factor in whether you will retain the donor, and at what dollar level

• Fill the holes in your leaky bucket!

• Why did the donor give? Stop giving?

• According to Adrian Sargeant, Ph.D. from Indiana University’s Center on Philanthropy “A 10% increase in donor retention can increase the lifetime value of the donor database by up to 200% .”

EMPHASIZE DONOR RETENTION OVER ACQUISITION

7/30/2013 Customer & Market Insights 11

• Be willing to invest in your donors, e.g. thank you calls. See Donor-Centered Fundraising – Penelope Burk

• Determine a donor’s potential early in your relationship and allocate resources accordingly

• Be Donor-Centric, not Campaign-Centric - Personalisation - Segmentation - Guided Moves Management

FOCUS ON LIFETIME VALUE, NOT RESPONSE RATES

7/30/2013 Customer & Market Insights 12

7/30/2013 Customer & Market Insights 13

• Set goals and measure your results

• Find peer groups and benchmark your results

• Checklist Manifesto, by Atul Gawande

• Identify best practices

• Find ways to collaborate to maximize results

FOCUS ON RESULTS, NOT EFFORT

7/30/2013 Customer & Market Insights 14

• Organize yourself to recognize a donor’s passion for your mission

• See yourself through the eyes of your donors

• Be willing to invest in your donors

• Test investments and track results carefully

INVEST IN YOUR MOST PASSIONATE SUPPORTERS

7/30/2013 Customer & Market Insights 15

7/30/2013 Customer & Market Insights 16

1. Emphasize donor retention over donor acquisition

2. Focus on a donor’s lifetime value, not a campaign’s response rate

3. Focus on results, not effort

4. Identify & invest in your most passionate supporters

KEY TAKE-AWAYS

7/30/2013 Customer & Market Insights 17

• Over 300 of the best fundraising ideas ever, at your fingertips 24/7…for free! • Contribute your own exhibit. • Sign up to receive hot news and updates. • What three things will you do differently, starting next week?

WWW.SOFII.ORG

A unique online resource of everything you could want to know about fundraising from c.1500 BC to the present day

7/30/2013 Customer & Market Insights 18

The Raiser’s Edge for Retention can help your organisation to:

Focus on donor retention & stewardship Improve visibility of fundraising results Manage regular giving Improve efficiency

For more information contact Rebecca.Shortern-Rule@Blackbaud.com.au.

It’s time to start treating your donors as your most valuable asset

7/30/2013 Customer & Market Insights 19

QUESTIONS?

Chuck Longfield, Chief Scientist

chuck.longfield@blackbaud.com