You’ve likely read the stats: It cost 5-7 times as much to acquire a new donor or member as it does to retain them. Not only that, but in recent years it has simply become harder to acquire them.
That leads me to say, “Retention is the New Acquisition.”
To keep the donors and members you have, you would be wise to devote the majority of your resources to retention.
Before I go on I want to be clear on one critical point: CONTINUE YOUR ACQUISITION EFFORTS. I’m NOT suggesting you cut back on acquisition.
I am recommending you enhance your retention efforts. Seriously enhance them.
The graphic illustrates the shift in thinking that will help your nonprofit grow its file size. Flip the traditional funnel. With the “Growth Funnel” you put the emphasis on retention.
This isn’t magic. The Growth Funnel requires plenty of hard work just as the traditional funnel did.
But the change is primarily due to the shift in the consumers’ role in today’s marketing. And consumer behavior definitely rolls over into the nonprofit sector. This is what I mean:
◊ Consumers define brands [Donors define your brand]
◊ Consumers demand a great customer experience [Donors demand a warm, friendly, rewarding and exceptional experience with your organization]
◊ Companies must earn permission to engage with consumers [Nonprofits must earn donors’ consent; make your intention clear to donors; and create environment where they anticipate positive results & a rewarding experience]
◊ Engagement is key to success
Exactly why focus on retention? Why will that create growth (including acquiring more donors and members)?
Only 14% of consumers trust ads;
yet 78% trust recommendations.
That data from a recent Neilson study reveals that consumers (i.e., supporters of your nonprofit), are in control more than ever before. Social media has a lot to do with this (e.g., blogs and social networking sites).
Social media is a prime way for supporters to share your information and in the process, recommend it to their network. Likes on Facebook or your blog, retweets on Twitter, comments on blogs, forwarding an email, scanning bar codes (incl. QR codes) and responding to text messages . . . all of these actions and more are endorsements of your nonprofit.
With each action supporters are recommending you to their network in both subtle and direct ways.
That’s not all. These actions are also engagement. That’s why engagement is key to your success in today’s marketplace.
People who are engaged are more likely
to donate if they haven’t already done so
And again, as supporters “recommend” your nonprofit to their network you acquire more supporters (78% of people TRUST recommendations). Some become donors or members right away while others require more nurturing before they convert.
It all adds up to the fact that “retention is the new acquisition.”
Therefore, take a critical look at your cultivation and stewardship strategies.
It’s doubtful any organization can claim a perfect system so give yours a major overhaul. You’ll reap rewards with happier supporters, increased retention, more “recommendations” by supporters, plus acquisition via these supporter endorsements for overall growth in your supporter file size. And yes, it all leads to more revenue but not overnight.
Related posts to help retention:
Must change your nonprofit business model to survive … Avoid becoming an Obsolete Charity
4 ways to avoid shallow relationships with donors and minimize attrition … Why Fundraising is Not Enough for Your Charity
10 things you’re likely doing to drive donors away … Do Not Encourage Donors to Choose a Substitute for You