A few weeks ago, I was preparing for a client call and asked my contacts at the organization what their most pressing question was so that I could come prepared to discuss it with them during our standing weekly meeting.
Their question was: “We aren’t renewing donors we acquired online last year as we have in the past… what should we do to fix that?”
When I saw their response, I smiled because lots of clients and organizations have been asking this exact question this year. I should have known better… of course this would be the question they wanted me to answer.
First, I wanted to know how many 2nd-year donors they had in their email system and what level of engagement with the email program they had was.
To do this, I needed to define “engagement” first. So, here is how I defined “engagement” statuses:
- If the contact had either opened or clicked any of the last 11 emails we had sent them – or – if they had been on the website in the last 30-days – or – if the contact had been created in the last 30-days, then I would mark those contacts as “Engaged.”
- If the contact had no history of either opening or clicking any email we had ever sent them since their contact record was created (and the record was created 31+ days ago), then I would mark those contacts as “Never Openers.”
- If the contact had open/click history (in the past), but had not opened or clicked and of the last 11 emails we had sent them – nor had they been on the website in the last 30-days (and the record was created 31+days ago) – then I would mark those contacts as “Disengaged.”
- Finally, if the contact had either “unsubscribed” or been suppressed from emails due to specific “hard bounce” reasons that would imply that the email address on the file was that it wasn’t a good email address, then I would mark those contacts as “Unsubscribed.”
Now that I had these engagement status codes created, I ran a report to show me where the 2nd-year donor contact records fell across them.
Here’s how things ended up looking for this customer:
As shown above, there were 11,102 new donors acquired in the previous year.
The shocking truth came into focus at that point, which was:
- 14% of new donors acquired last year were already unsubscribed from emails.
- Slightly more than 1/3 of the new donors acquired last year had stopped engaging with our website (in the last month) and/or opening or clicking any of the last 11 emails we sent them.
- 15% of the new donors acquired last year had never opened any of the emails we had ever sent them.
To simplify it for them, let’s summarize it this way:
Nearly 2 of every 3 new donors acquired last year can’t be reached with an email-only strategy.
So, whats my recommendation?
We needed a multichannel strategy in place to reach these donors.
Simply relying upon the email program to renew donors acquired last year was flawed because the very best they could do with that channel mix would be to only retain 36% of their new donors from last year (or those that currently were engaged with the email program).
Next, I was curious about what they thought their retention rate was.
They reported that of the 11,102 new donors acquired in the previous year, they only saw that 1,109 (or 10%) had given gifts online FYTD.
Those would be terrible numbers indeed – but, was it true?
Because I knew that this organization also had a tremendous direct mail program in place, I wanted to know how many of last year’s newly acquired digital donors were renewed—but just not in the online channel.
So, I ran what I call the “Channel Migration Report.”
This kind of report puts donors in a “cohort” segment based on where they give their gifts. What I was looking for was whether their online-acquired donors were renewing their support, but just not in the channel they were not acquired in.
Before I show you the data, let me define the “channel cohort” segments that we use.
Here they are:
- An “Online Only” donor is someone who has given 1+ gifts only (you guessed it) in the “online” channel.
- Similarly, someone who is in the “Offline Only” cohort segment has never given online (read: They have given 1+ gifts in the fiscal year in response to direct mail letters mailed to them).
- The “Multichannel” donor cohort is made up of donors who have given at least 1 gift both to the online channel and the direct mail program.
- Finally, the “Offline w/an Email” donor cohort segment is made up of donors who are being sent emails but have only given 1+ gifts offline (or to the direct mail program).
With that in mind, here’s what I saw happening within their program:
As you can see in the report above, in one way, the client was right.
They only were paying attention to the 1,109 gifts that were made this year online (between the “Online Only” and “Multichannel” cohort segments) — but, what they failed to recognize is that they actually received more donations (1,585 donations to be exact) from the donors they acquired last year online through their direct mail channel so far this fiscal year.
Their retention rate of this donor segment wasn’t just the 10% they thought they were receiving … it was actually more than twice that amount at 24.3%.
Even more shockingly, 54% of the online acquired donors from last fiscal year were “Active” (which means they have given at least one gift this fiscal year) in the “Offline Only” cohort.
That means that their emails were removed from the client’s system (probably because they requested that) — and — they were responding to their direct mail letters.
For what it’s worth, there is still more work to do between now and the end of the fiscal year to lift the retention rate on this segment of donors, but this was a very valuable lesson for this client:
Their donors don’t think of their gifts to the organization in “channels” like the fundraising team did — the donors see giving in any channel as donations made to the organization as a whole.
Too often, development directors take the wrong perspective with their online program. They think of it like a P&L, meaning: If they have staff and budgetary resources lined up to “fund” their digital program, then they only measure “results” brought back directly within the “online” program.
The truth is that the online program should be seen as much more than just that.
I’ve seen it many times: The online program has the ability to increase response rates in other channels or, as seen in this particular organization, even feed donors who respond well to the direct mail program at a far more efficient cost to the organization.
Moreover, they think their online program may be failing when in many cases, it’s shuffling donors around between channels, and offering better efficiency and response rates for the other channels that receive “the credit.”
On top of all of that, this perspective fails to put the donor’s experience first.
What I mean by that is that if we’re going to meet donors where they’re at, focus on improving their overall experience with our communications strategy, and message to them in a relevant way, then we must use this kind of data to communicate to our donors and look more holistically about the role of our online program and it’s ability to lift response rates somewhere else.
With all of that said, here are just some of the recommendations that I made to this customer:
1. Use your donor data and be more relevant:
Feed the donor’s “last gift date” and “last gift amount” information from the CRM into the email system, regardless of channel and use this information in future emails to meet donors where they’re at (e.g. stop asking them to “renew” their support if they’ve already given recently in another channel).
Even by doing this manually before we send any solicitation email (instead of syncing our systems through an API) would be worth it before sending a solicitation that tells a recent donor that they haven’t yet renewed their support for our cause this year.
2. Test adding more “Online Only” donors into the direct mail program:
We reviewed the mail selection rules for online-acquired donors, and decided to test loosening them to add more “Online Only” donors into the mail segment, while also agreeing to prioritize donors in this segment that were no longer responsive (or never were) to the email program.
3. Target all “Direct Mail” audiences with branding ads & lift response rates for those letters:
We decided to test targeting our direct mail contacts with online branded advertising on Facebook to lift offline response rates.
In an experiment that I conducted for another client, I observed that by targeting direct mail audiences with Facebook ads (that promoted the brand messages, which was very simple to pull off) we lifted donor response rates by +20.3%, increased average gift values by 13.1%, which translated into an overall revenue lift of +36.1% for the treatment segment (where brand ads were added).
What was more impressive was that the incremental expense to run those ads produced a 2.03 ROI on the incremental revenue produced from the treatment segment.
All of this is to say that we know that running brand ads on top of direct mail will lift results (you just have to be prudent with how much budget you allocate to the treatment segment).
4. Reach donors no longer responding to emails with online ads:
Of course, we decided to target all donors in the segment that were no longer responsive to our emails with online advertising in an attempt to renew their support through new content offers hosted online that had been created so far this FYTD to see if we could secure renewal gifts in the online channel.
The truth is that all of these steps are fairly simple for everyone to consider as well.
If you haven’t tried any of these tactics, perhaps launching a few tests of the same type may benefit your ability to retain donors, as well.
Speaking of multichannel strategies, did you know that we have a whole entire research study on our website dedicated to the topic — AND — that it’s focused on year-end fundraising?
It’s called “The State of Year-End Multichannel Fundraising.” We studied the year-end strategies for 119 organizations and provide lots of good and easy recommendations that you should consider for this end-of-year fundraising season to start thinking about your campaigns in a “multichannel” way.
Also, here are some experiments that I think are worth checking out:
- How the amount you ask for in your campaign impacts your non-donor response rates
- How a campaign-specific “unsubscribe interrupter” affected opt-out rate
- How “hero-focused” language affects donor conversion
- Does focusing on a revenue goal versus the number of donors goal impact donations
- How a contextual value proposition and a reordered form affects donor conversion
This post was inspired by one of the 2022 NIO Summit sessions from Marcus Sheridan, the acclaimed author of the book “They Ask, You Answer.”
If you haven’t seen it yet, it’s fantastic! You can watch it on our event website right now for FREE here:
NIO Summit 2022 – Marcus Sheridan Session
Get access to “Cut Through the Clutter with the Year-End Fundraising” eBook available today. It will give you 5 year-end fundraising insights from an in-depth analysis of 2400+ emails sent by real organizations. Get your copy here: https://www.nextafter.com/cut-through-the-clutter/