A simple retention calculation packs a powerful punch

In my experience, often in fundraising departments no-one actually has the word retention in their job title. Not so for acquisition.  Retention often hides behind the skirts of other programs.  It’s hinted at in words like “direct marketing”, “special appeals”, “supporter services”, “donor communications”.

It’s symptomatic of our approach to retention.  We focus on individual program delivery. We do it in bits and pieces, here and there and then cobble it together.  An overarching strategy that looks holistically at how we are going to grow our active supporter base and increase the amount that base gives is more powerful than a piece-meal approach.

Start with the following calculation.  The dummy example below compares the performance between current rolling 12 month period to the previous period – but you could use other time periods.  This calculation allows you to understand the movement of your entire base so you can benchmark your current performance and build your targets from there.

In the above scenario, even if reached your acquisition target of 3000 it wasn’t enough to stop your active base from shrinking.    Umm time to put a good overarching strategic retention and upgrade strategy together. How am I going grow my active base by 5% in year 1, 10% in year 2 and 15% in year 3. How am I going to get a higher percentage of my active base giving more?

Set the targets

It looks something like this.  To increase income by x% I need to reactivate 8% of the lapsed supporter base, recruit 12% of the current supporter base, retain 80% of the existing supporter base and have 35% of that base actually increase their gift.  I need to make sure that no more than 7% of my active base lapses.  Build realistic but ambitious targets based on what you currently know about your performance.

Build your strategy

Time to start pulling your retention and development strategy together.  First understand in detail where you are weak and what aspects you need to focus on to have impact.

Map out your supporter journeys from the point of sign up right through to when a supporter lapses.  Look at this by segment and by channel.  I normally break the stages down into welcome, engagement, upgrade, loyalty, reactivation.  By looking at these relationship stages and developing an overview of what happens at each stage and what our performance is gives a good insight into strengths and weaknesses.

It may be that in order to retain 80% of your existing base you really have to have a much stronger welcome process that retains a much higher percentage of your first year supporters.  For large regular giving programs the biggest dip in retention happens in the first six months.  Does your welcome process demonstrate a cut in attrition in the first 90 days?

Maybe you need to work on your upgrade strategy at the same time.  Who are you calling and how are you increasing their gift?   Our research shows that even those supporters who say no to an upgrade call have higher retention rates than those supporters who are not reached.

Make sure you have a strong delinquency management process and reactivation program in place (remember you need to reactivate 8 % to meet your supporter growth target).  Call quickly as soon as they become delinquent – and if they cancel attempt to start getting them back six months later. Test it and find out.  The general rule of thumb is that the longer you leave it the harder it is.

I’m not even covering the basics here – but if there’s just one point (or several) I am trying to make, it’s this.  Look holistically at how your whole supporter base is migrating over a given period.  Work out what your targets are for each of these segments (% to upgrade, % to remain active in the same segment, % downgrade, % reactivated, % new and % lapse).  Map where you are weak and what areas will have the biggest impact and work out your strategy from there.  Make sure your whole team knows what they are responsible for and what their targets are.

Imagine a photo being brought to life in the developer’s lab…the shape starts to appear and this thing called retention actually comes to life as a proper, breathing strategy.  This way you will have a lot more power to drive your results.