Retention and increasing lifetime value is where all of the real money is made. Word of mouth, for instance, is nice-to-have yet all focus should be on retention. 

There are fewer ways to do retention marketing wrong than there are to do it right. 

To level set – only remembering about your Org’s donors when you need another donation from them is wrong. Blasting their inboxes with red-button-donation-CTAs is wrong. And counting on them to retain following your average churn rate is ill-informed, at best.

Over any End of Year period, Org’s see an influx of new donors – most of whom will be gone until (best-case scenario) the next EOY season. We can do them – and ourselves – better. 

Thinking of ways I saw retention done right – or at least most effectively – I turned a list of notes from previous tests and successes into this post below, vaguely organized into Low Hanging Fruit, Donor Data, Analytics, and Donor Experience categories.

I haven’t seen most of these ideas explored elsewhere and I hope they’re incremental for you. While some are more complex to put in place, I hope you find an idea or two to get a stubborn churn rate down in the new year.

Retention Marketing Tool Kit

Org’s have a few key levers they can pull when it comes to retention marketing. These are the ones that immediately come to mind:

• Email programs
• SMS programs
• Mobile apps
• Retargeting ads 
• Loyalty and monthly donation programs
• Educational content
• Reminder content
• Surprise and delight Matching and gifting
• “VIP” experiences 
• And the use of data and technology to proactively predict potential churn

Each of these marketing activities play an important role in increasing retention and LTV. Most Org’s that I see do 2 or maybe 3 of these well right now, and there’s a real opportunity to build THE retention playbook. Of course you need to have the skills and resources to execute well, but it’s an investment with a real ROI.

Low Hanging Fruit – Email & SMS

The name of the game when it comes to retention and reactivation in the world of Email and SMS is “Segmentation.” 

Depending on the specific donor cohort, you need to segment your comms and campaigns to be as relevant as possible to the end recipient. Start with creating a segment of donors who have only donated to your Org once. Send them a custom email and SMS campaign with a unique Match code incentivizing them to donate again every 3 weeks until they do. Stop the flow after they convert. 

If you want to go one layer deeper, start segmenting campaigns based on parameters like geographic location or program/cause.  

Segments are one of the most powerful tools that Org’s can use to make campaigns and offers feel as relevant as possible, which ultimately leads to higher conversions. The more specificity and customization you have with your marketing here, the better.

TL;DR: The more you can slice and segment your list, and create custom content toward them, the better.

Donor Data – Surveys

Whether we like it or not (and it’s tough to like), in about two years marketers will likely have to deal with 50 versions of Consumer Privacy Acts and multiple sub-regulations limiting web tracking, processing of existing data, requests of deletion, and other Bills making existing tracking an unbearable risk. And that’s not including any AI regulations or EU laws.

Org’s wanting to have a shot at data-driven retention must lean into the only data source that’s “safe” in any environment – direct response from donors or so-called “zero party data”. Good ol’ surveys asking donors directly why they donated right after their first donation, what topics they feel mostly affiliated with, how well they think the Org is stewarding their money, and why they decided to stop donating after they lapsed from a recurring program, become more relevant than ever. 

Paid media channels make conducting these surveys a much easier exercise. Meta and Instagram allow for survey ads as one of the default formats. Most programmatic platforms accept HTML5 creatives as assets, which can include web versions of surveys without requiring donors to visit the website. 

One metric I borrow from the for-profit industry playbook is Net Promoter Score (Donor Happiness). Introduce a simple 0-10 survey to donor’s and ask about their experience/satisfaction after every viable interaction with your Org or at specific periods. 

The best part? Serving these surveys as part of a donor experience not only collects much-needed data but improves retention rates.

Analytics – Cost of Losing a Donor

The most used metrics for retention are Churn Rate, Retention Rate, and Lifetime Value (LTV). Another one I love is the Cost of Losing a Donor. It’s got a suitable acronym too (COLD)!

For example, if your average retention cycle is 12 months and the monthly donation value is $10, losing a donor after month three costs your organization $90. After month 6, it declines to $60 – and so forth. But that average retention cycle is not a given – it’s a twisted measure of the likelihood of retaining a donor each month as a loyal member of your donor base. 

So, if the RoAS your Org is targeting is 5:1 – your retention marketing budget should be at least $2 per every donor who donated 11 times since the cost of losing every one of them would be $10 or 5x$2.

In the above example, I used 11 months as that one month before donors are “projected” to churn based on the average retention. But the average is far from the ideal and the budget for retaining donors likely to churn after their first month should be even higher. A simple way to analyze it is to look at cohort donor retention metrics. 

Netflix – and other subscription-first businesses – do it better than most. Their trick is to organize users as cohorts of: 

• Audience (can be as simple as demographics, evolving into better, enriched data over time)
• Channel they were acquired through
• Content they first converted on (in nonprofit Org’s, this is represented by the pillar they first donated to)

Looking at churn and retention metrics through the lens of these cohorts will allow you to better understand the Cost of Losing a Donor in every cohort – allowing you to far more accurately plan the retention budget. 

This cohort-based view hits on another key objective. More often than not, churn is the outcome of bad acquisition. By enhancing your cohort definition with, for example, a landing page that donors first donated on, you’ll establish another way of defining the success of website testing or launching a new acquisition channel through the Churn / Lifetime Value lens. 

By tracking each cohort’s behavior over time, you’ll see the direct impact of every change made to the website – and if you have a data partner, you can also predict it. And that’s what every marketer is looking for – an ability to estimate the result of every test ahead of time!

Donor Experience

As shared most recently in SPN #44, I’m a huge fan and advocate of introducing the role of Chief Experience Officer into the nonprofit space. Here are a few examples of how I’ve bettered donor experience – and increased retention:

1. That first donation matters the most and strongly influences if the donor is ever coming back. Make it feel special! Here’s how: take new EOY donors off any retargeting, email, or direct mail lists immediately until the end of the year so they don’t get any donation requests – instead, wrap them in gratifying surround sound across all channels.
   Most Org’s already send Thank You emails – take that to the next level by serving them similar Thank You ads across paid media channels, with no CTA attached. See above the case for the “Cost of Losing a Donor” metric – these ads would be a disaster for your acquisition RoAS targets but would result in lower churn. 

2. Reward loyalty. Whether it’s Starbucks’ mobile app or Amazon’s Prime program, the best loyalty programs in the D2C world share one trait: they reward longevity. Donors want to maximize their impact and Match is an excellent tactic for doing so. Most (larger) Org’s have a Match budget usually used for all donations within a specific timeframe or for one-time, new donations. But that can induce the same behavior that the Telecom industry suffers – consumers shop around Verizon, T-Mobile, and AT&T transferring their number whenever possible to get that “new customer” deal. 

Test matching pledge/monthly donations for a given period – incentivize them to come back – and sign up for a recurring plan. I’d treat this as part of my retention marketing budget if I was at a smaller Org without a dedicated Match pool. 

3. Impact reports. Most Org’s already provide annual reports to their donors, highlighting the total impact made by all donors and specific donor’s contribution. Spotify Wrapped and (new this year) Apple’s carbon copy of it for Apple Music are both solid examples.
   Most impact reports are physical assets delivered by mail – which works great for older cohorts. For younger donors, consider producing a dynamic landing page tailored to every donor’s contributions – and driving traffic to it by serving the same “Impact Ads” with no other call-to-action as a part of your retention budget.

This year’s mantra: Retention, Retention, Retention.