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Understanding Donor Relationships. Direct Response Solutions, Inc. . The “Issues” in Renewal. 1) Elongating recency deltas from last gift 2) Renewing “donors” acquired by premiums 3) Convincing telephone donors to renew by mail or email

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understanding donor relationships
Understanding Donor Relationships

Direct Response Solutions, Inc.

the issues in renewal
The “Issues” in Renewal

1) Elongating recency deltas from last gift

2) Renewing “donors” acquired by premiums

3) Convincing telephone donors to renew by mail or email

4) Battling lapsing rates among even the best donor segments

the issues in renewal ii
The “Issues” in Renewal --II

5)Pairing donor and preferences

with organizational needs

6) Defining your “universe.”

7) Allocating fund raising expenses

of each segment to projected

ROIs

the causes renewal
The Causes - Renewal

1. Attrition not made up by new/ recaptured donors

2. Lapsed program cost per donor acquired higher than some acquisition.

3. Number of donors making 2+ gifts

per year is in decline.

the causes renewal ii
The Causes - Renewal - II

4. Mailing strategy that avoids focused efforts to renew w/i 3 months.

5. The lapsing rate of your new donors is increasing.

6. Confusing transactional and mission driven “donors.”

the causes renewal iii
The Causes – Renewal - III

7. “Our strategy this year is what we did last year; it’s what our donors want.”

the issues acquisition
The “Issues” - Acquisition

1) When can an acquisition effort be properly deemed successful or not? How?

2) What’s the strategy for renewing

new donors?

3) Can you hit a five-run home run?

Should you? When?

the issues acquisition ii
The “Issues” – Acquisition - II

4) The “external” list plan – factoring in your usage trends; finding lists that are working for others

5) The “internal” list plan – Events, End users, Prospects,

Employees

6) Do you really need that extra insert; the 4-color photos – will they increase response or ROI?

the issues acquisition iii
The “Issues” – Acquisition - III

7) What’s too much to spend on acquisition? When to cry “uncle!”

8) Can you “under-spend” in acquisition?

9) What are good measurement tools?

  • Response rate/average gift?
  • Cost per dollar raised?
  • Cost per donor acquired?
  • Renewal rates of new donors?
solutions
Solutions

Understanding Donor Life Cycles:

  • New Donors
  • Second Year from New Donors
  • Multi Year Donors
  • Recaptured Last Year
  • Lapsed 13-24 months
  • Longer Lapsed
solutions ii
Solutions - II

Achieving more gifts from each donor:

  • Acknowledgment program
  • Always ask again w/i 3 months
  • Donor welcome kits for new donors
  • Monthly giving
  • Use giving clubs
solutions iii
Solutions - III

Maintaining and upgrading each donor relationship:

  • Find and react to DONOR NEEDS
  • Renew similarly to acquiring (medium, package, theme)
  • Set marketing plans and goals that are realistic for each segment
  • Promote regular giving, always
  • Provide good reasons for the donor to upgrade; acknowledge when he/she does
solutions iv
Solutions - IV

Setting the Strategy Plan:

  • Replace attrition with recaptured & new –
    • Better ROI - increase retention vs. add new/win-backs
  • Acquire only renewable donors
  • Set realistic goals by segment
  • Use last year’s plan only if it was successful
  • Never hesitate to change the strategy midway
  • Use premiums, phone, etc. when and where the “lift” is essential
solutions iv cont
Solutions – IV (cont.)
  • Plan for significant upgrades in response and income from the core donors only; lay careful and realistic plans for large income growth from borderline renewal segments and acquisition.
solutions v
Solutions - V

Investing wisely …

  • Allocate your resources to where they will best impact ROI – maximize efforts to the core donors
  • Understand the contribution from lapsed;

adjust strategy to minimize high risks

  • Limit acquisition to renewable new donors; be prepared to set goals and measure results differently for transactional donors
slide16

Direct mail fundraising is a marathon, not a sprint.

By all means, use every technique available to you to generate that first gift. But don’t conclude success or failure on immediate returns alone.

You’re in it for the long haul … your ROIs are profitable only when you’re into the renewal phase.

All that glitters may indeed not be gold. At least at the outset!