February 5, 2013
Why donor loyalty matters
Donor loyalty continues to be a key theme for nonprofits and a driving force for development professionals – two reasons why Sage Nonprofit chose donor loyalty as the topic of its December 2012 survey of over 800 of our nonprofit customers.
Over one-quarter “unsure”
One of the most surprising findings of the study is that when asked if they had a donor loyalty program or strategy in place, only 31% of the respondents answered “Yes,” while 43% said “No” and 26% answered “Not Sure.”
For those of you who are not sure what I mean by donor loyalty, it is the emotional connection and relationship between donors and your organization. However, and this is important to note, the relationship itself is defined by the donor’s perception. While you may think you are doing everything right to engage and build a relationship with your donors, they may think otherwise. That’s why it’s very important for you to talk to your donors and ask them what they think of the relationship.
Find out what your donors think
Surprisingly, our study found that 67% of the participants were not surveying their own donors. Surveying is always the first thing I recommend when developing a donor loyalty strategy and program. Donor feedback should serve as your guiding light. It is crucial for organizations, especially growing ones, to ask how they can better serve their missions and constituents in order to reach their full potential.
Retention is cheaper than acquisition
In the for-profit world it costs five times as much to do business with a new customer than with an existing customer. The nonprofit world is not too different. According to fundraising expert Adrian Sargeant, it can cost up to ten times as much to obtain a new donor than to keep an existing one. So maintaining a healthy relationship and making sure your donors are happy is a key factor to running a successful nonprofit.
In reviewing the study, I was most shocked to find that 29% of nonprofits are doing nothing when a donor lapses. This is good and bad news depending on who you are. It’s great news for those of us looking for new donors and bad news for those of us failing to follow up!
Handwritten thank-you notes turned out to be the king of loyalty. I have said it before, and I will say it again: the value of a handwritten thank-you note cannot be exaggerated!
The study also revealed examples of what organizations are (and aren’t) doing today to express appreciation and help ensure loyalty. Some ways you can show donor appreciation include listing donors on your website, hosting an award ceremony, publicly thanking donors via social media, acknowledging donors in your annual report, and sending donors promotional thank-you gifts. The survey found that the most utilized give-away gift was none other than the classic pen. Its low cost and practicality most likely make it the winner.
About the Author: Bridget L. Brandt is a director of marketing for the Nonprofit Solutions business at Sage North America. She regularly speaks at industry conferences, and writes a blog focused on donor loyalty and experience at: http://www.donorexperience101.com.
Publication date: Mar 13, 2013
author/source: Bridget L. Brandt