There are statistics and numbers that stay on your mind for months and constantly challenge your assumptions. One of the numbers that keeps me awake at night (seriously!) is the ratio 6 vs. 59. Yes, you know, or you should know, this is the % of customer attrition in the commercial world vs. the nonprofit sector, according to Bloomerang.
We can discuss about the sample or the methodology and argue that this does not represent our average charity or our country, but you would admit that the gap is so wide (6 to 59!) that we need to ask why we lose most of our donors (and we know that a large majority of our first time donors will not repeat their gift) and business is able to keep most of their customers. I am not a fan of “business does it better” but would like to use some real life stories to understand where and how business increasingly invests in creating emotionally engaged customers as a key driver of their financial bottom line, compared to our world where retention and attrition are still big headaches.
One of the key insights that has been discovered in the commercial world is that emotionally satisfied customers are substantially more profitable compared to rationally satisfied or dissatisfied customers.
Sounds easy or obvious? Let’s see what is happening in the real world.
Who is at your door?
Years ago, when I was working in a big INGO, one day I heard loud voices shouting and arguing in the lobby of our building. Being curious, I got closer and I heard that the security guards at the entrance were animatedly discussing with an old couple. The guards were saying that they couldn’t let them in because they didn’t have an ID and they didn’t know who they were. As the discussion went on, I heard and recognized that the two were very important major donors to our organization and that they had come to have a meeting in our HQ. They were about to leave because they felt ignored and mistreated. I went to the guards and explained the situation and escorted the two people into the building, owners of a very large charitable foundation and trust. Results: a substantial donation and a donor relationship were saved by chance. This episode makes me think of how many donors we leave at the door, waiting on the telephone line or hanging on in despair on our webpage. And also makes me think how of many of our front line staff (operators, security guards, janitors, doormen, etc.) are aware of donor care and their relevance for the organization. Then I compare this to the commercial world I can see that the standard in this part of the world are set in companies like Zappos, now acquired by Amazon, where the secret of their financial success is that each employee, especially in the customer care and call centre, is empowered to do anything (including spending money without being authorized by the managers) to make a customer happy – to the point that if you call them and ask where there is a Taco Bell open at 1AM in a given locality they will find out for you even if you don’t buy anything with them!
How to kill a donor
The second story is about the painful experience of trying to get things fixed through customer or donor service. Years ago, when I was moving in London from one flat to another, I called British telecom to get my telephone line transferred to the new place. As you know, the critical utility you need the most today is internet connection and you can have it only if you have a telephone line installed. Of course, commercial companies don’t always get it right. After some painful calls to the customer centre and seeing no results, I googled “CEO BT” and “email” found the email address and sent him an email with the subject “BT customer care: a joke!.” Five minutes later I had back the following email from Sir Ian Livingston, CEO of BT and today Minister for Trade in the UK government.
The day after I got the line installed and when I sent an email to thank him, he personally thanked me for letting him know there was a problem and apologizing for going through this experience. And this is not pure luck. I repeated the same experiment with other companies (banks, credit cards, magazines, telephone, etc.) in UK, Panama and Switzerland and got problems fixed, received compensations and prizes and several apologies. So a first suggestion is when you’ve got a problem going straight to the CEO and don’t waste your time with customer services.
But how can I compare this experience with one of the several frustrating attempts to get engaged with a charity? Last year I gave to what I believe was one of the best and most compelling campaigns I had ever seen. I donated not just because I am a fundraiser, but because I was so moved and convinced that my contribution would make a difference for an ambitious but possible target. This organization went from $12 million to $28 million income overnight and recruited hundreds of thousands of new regular donors, mostly young. After a year of regular monthly giving through my credit card I wrote to them with anger and disappointment explaining I hadn’t received anything for a year. The response I got back is in below:
Let’ have a look:
- “Hi Ambrogetti” (nice to be called with my last name, and without even Mr!)
- It is my fault because I didn’t sign up for the newsletter!!
- I can go on the website to stay informed (I just wrote to say I am upset because I didn’t hear anything from you!!!!)
- I can be in touch if I have questions about their work (I just did it !!!!!!!)
- They would love to hear about my donor experience so I should take a survey (are you joking!!!!!!!????????)
If we want to really resolve the puzzle of 6 vs. 59 and start making money for our causes we should consider the following strategic points.
- Let’s turn around the basic assumptions and the budgets: retention is the new acquisition! So let’s invest accordingly, let’s devote teams and people to it and reward them: if they are happy, donors are happy.
- Emotions drive human decisions, including the decision to give again and stay with a charity. Therefore we should invest in more emotional engagement with donors AFTER the donations, and not only in acquiring new donors and then sending institutional/transactional/rational communication.
- Be sure that your CEO and your Board have regular access to emails, calls and letters from donors, especially when they complain.
After all, you never know who is at your door, who is on the line or who is looking at your web site. It can be a treasure or a nightmare (and Halloween is coming).
Francesco is the fourth IFC speaker to contribute to the IFC Series 2013.
Check out HERE where you can see Francesco present at the IFC.
101fundraising is proud to once again be the blog partner of the International Fundraising Congress 2013!