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The cost of attrition

Fiona McPhee says it’s time to question yourself about your approach to supporter loyalty – because attrition is costing us.

This is my favourite time of year! Pareto’s 2017 Industry Trends Benchmarking Report has been released. You and I now have the opportunity to see, at the macro level, what’s happening in individual giving.

We’ve already reviewed the report with our Australian member base and the truth is what’s happening can be summed up in one word: challenging. And I love a challenge. As I know many of you do.

There is no emerging silver bullet on the horizon, there is no dramatic upswing in anything. Overall income has maintained from last year, driven by regular giving, and for some the opportunities are clear. But for those of you with developed programs in a pressured acquisition market that is facing declining retention rates, how do you pursue sustainable fundraising?

“It’s cheaper to retain a supporter than find a new one” is common law in fundraising. And it’s true. Replacing a lost, loyal supporter is even more expensive then acquiring a new supporter as for many the equation will be up around four or more new supporters to simply replace the lost income in one year of a previously retained, loyal supporter.There are two statistics in this round of Pareto Benchmarking that drive this home:
• retained cash supporters contribute, on average, over 60% of total cash income (and if you’ve not done any supporter acquisition recently it will be even higher)
• overall cash supporter retention is at an alltime low (although many charities are 25% to 40% better at retaining their supporters than the average so we know we can do better).

Supporter service is critical

The supporters you already have are your best asset but they are not staying around as long as they used to or could. I can’t go into the details of all the research here (I’m always up for a chat about this though so do please get in touch) but so many things point to how we treat our supporters how satisfied they are with this treatment, and how engaged they are as being critical to supporter loyalty.

Your approach supporter service (or customer care or donor care) is critical to managing supporter loyalty. Our investment in this is low compared to the commercial world. Pareto mystery shops a lot and while things have improved year on year, overall our experiences are not as good as they could be. So how can you ensure you are excelling? Here are two ways to get started:

1 Better understand your audience

Do you ask supporters what interests them? Do you know why they care, what their story is and how engaged they are? Being taken for granted was highlighted by some excellent UK research as a specific reason why supporters chose to discontinue support, including not being thanked appropriately, being asked for money too often, receiving communications they did not want and not being recognised for their commitment.

Do you have an approach to understanding how these issues could be affecting your supporters? Do you ask for and capture the reason supporters cease their support? Do you exit interview selections of supporters?

We are not paying enough attention to our supporters, often driven by the fact that they have no avenues or opportunities to be heard. The rise of mass direct response fundraising has seen process prioritised over service. And while the use of data to segment and target continues to improve it’s what we do with the knowledge from that data that’s lagging. The first steps to take are:
• ensure the information that you have on supporters and how it is captured is audited
• identify the gaps in your knowledge about your supporters – what should you and could you know about your supporters?
• audit the ways you listen to supporters (this can be done as part of an a wider mystery shopping project).

2 Better service your audience

This is the customer service chat many of you need to have. To quote UK fundraising expert Adrian Sargeant: Whether they are consciously aware of it or not, how they are treated by other charities will certainly drive what they expect when they start giving to yours.

Now if you’ve ever manned the phones at your organisation you may well have had a difficult interaction with a supporter who is upset about how much mail they receive or was dismayed to see you ‘out in the street cajoling people into donating’. And the untrained inclination is to get out as fast as possible. I have also seen these situations lead to organisations effectively hiding from supporters – having no clear way to be contacted and no people available to care for supporters with feedback.

These are simple examples of golden opportunities to deliver a great supporter experience. But if you are unprepared and ill equipped, your supporter experience will be poor and their loyalty will be affected.

Do you provide high quality service to your supporters? How do you know? Have you measured it? Do you monitor it all the time? Do you benchmark yourselves? Do you have a complaints procedure? Do you have a customer/supporter service vision? The first steps to take are:
• Get yourself mystery shopped. I recommend outsourcing this and running it over a threemonth minimum, if not a rolling program.
• Benchmark your service levels.
• Develop a service vision and implement KPIs to track and monitor donor responses.
• Audit your team’s roles and skills, and look at ongoing training to upskill them.
• Audit your supporter care communications, both proactive and reactive. Having a fresh set of eyes reviewing for experience, tone consistency, warmth and personalisation will help identify process gaps and execution gaps. An external audit will also help identify how accessible you are to your supporters and how much two-way interaction really exists (research shows us that each time you have a two-way interaction with a supporter it builds their loyalty some more).

Seeing your supporter service as a critical component of managing supporter loyalty with objectives to better understand your supporters and better service them will impact your supporter loyalty.

 

Fiona McPhee and the Pareto team work to review, analyse, benchmark and implement insight led approaches to improve donor journeys, care and service. If you are looking for some support to better understand your donors, drive better donor experiences and improve loyalty email fiona.mcphee@paretofundriasing.com.

This article was first published in Fundraising and Philanthropy Magazine 2017

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