The Key to Donor Retention?

A recent article by Drew Lindsay in the Chronicle of Philanthropy discussed the importance and implementation of “insight panels”. Insight panels are a version of the decades-old online focus groups, and although they’re not new in substance, I love the word “insight” instead of “focus”.

In this case, the insight panels were employed by Best Friends Animal Society (a national nonprofit with 400,000 donors), working with consultants Sea Change Strategies. The result of employing those insights, in terms of increased donor revenue — and stickiness — were, and continue to be, phenomenal.

As my readers know, I’ve been pushing hard to get fundraisers to think about how donors feel when interacting with a nonprofit. This isn’t about power dynamics or change for the sake of change — understanding your donor is a critical component of having a relationship.

According to one of Sea Change’s principals, Mark Rovner, “Groups rightfully focus enormous energy on messaging — words, photos, frequency — yet seldom listen to supporters.” (Sad but true, right?) Knowing this, Sea Change started its Insight Panels about four years ago.

Sea Change isn’t the only company using research to determine why our sector’s customer/donor retention rates are so low — lower than the retention rates of all the major business sectors in the US — and decreasing annually.

Another consulting firm, RKD Group, commissioned McQueen Mackin and Associates to study donor relationships — not why donors give in the first place, but why they continue to give.

RKD’s terrific report, “Listen Up! The Nonprofit Marketer’s Guide to What Donors Want”, does a great job of showing how customer data and analytics prove that donors want — maybe crave — authentic relationships with the organizations they support.

Per their report, RKD and McQueen Mackin “set out to determine how specific emotional, rational and behavioral attributes differ among donors who feel strongly about a nonprofit they support and (among) those who don’t.”

Surprise, surprise! They found that, per RKD, “…the biggest differentiators between donors who had weak and strong relationships centered around the notions of feeling valued and involved.” Note that word: feeling. How do your interactions make a donor feel?

The upshot of the summary in the RKD report is “Simply put: Donors want to be heard. So, nonprofits: Listen up!" (You can access the report here, and I suggest you do.)

Hopefully, this bit of information helps to convince you that relationships — authentic, honest relationships — are the key to donor retention. And you don’t need a research study to know that authentic, healthy relationships involve two-way communication. Talking “at” someone ensures that your “relationship” will be transactional, and not authentic. Transactions — at least in our nonprofit world — get you a 40% retained donor rate.

These actions/changes aren’t difficult to implement — you just need to change your mindset and see donors as humans with feelings (as opposed to “beings with checkbooks”)…just like you. Common sense, no?

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Set yourself up for success in 2023! Lisa is now providing coaching to nonprofit professionals and executives. Please email us if you’d like to discuss ways Lisa can help you and your organization increase the size of your donor “pie” and increase your revenue!

Lisa Greer is Saving Giving by providing a clear path to success, supported by data, statistics, and interviews. You can find more great newsletters like this one here on Philanthropy 451, in my bestselling book, Philanthropy Revolution, or on Twitter, and LinkedIn to learn more.