What Ostriches, Pliny The Elder and Einstein have to do with Donor Retention…
John Grain | 14 October 2011 | Blogs
In terms of financial behaviour, the ostrich effect is the avoidance of apparently risky financial situations by pretending they do not exist. Of course, for the naturalists amongst you (and contrary to popular belief), ostriches do not bury their heads in sand. This myth more than likely began with Pliny the Elder (AD 23-79), who wrote that ostriches “imagine, when they have thrust their head and neck into a bush, that the whole of their body is concealed.”
October 2nd – 9th was Customer Service Week and the FRSB rightly took the opportunity to do some PR work of their own to highlight the crucial role played by Supporter Services staff in many charities.
I’m sure stewardship, relationship building, supporter journeys, donor retention are all phrases that you hear as much as I do – in fact, they are used so often now that they are in danger of becoming meaningless.
Advertisement
Yet the truth of the matter seems to be that we are still not doing as much as we can to provide the imagination and service to our supporters that means they will stay with us longer, feel part of the charity’s work, and believe they are making a difference.
The Tiny Essentials of Donor Loyalty by Adrian Sargeant is not a new book. However, it still contains a number of conclusions and suggestions that are probably even more relevant now, as the global economy continues to groan and struggle, then when they were first written.
“Single biggest challenge facing our sector”
I absolutely agree when Sargeant says building donor loyalty is the single biggest challenge facing our sector today and goes on to say, “Not many businesses would survive if they lost a third of new customers in their first year, yet this statistic is commonplace in our sector. To make matters worse, it refers only to our friends, people that have given at least two donations to a favoured charity.” Logic dictates that losing a third of supporters in their first year means we must be doing something seriously wrong somewhere. He makes the point that a ten per cent improvement in loyalty year on year could equate to a 200 per cent increase in lifetime value of the database.
Given all this, and the increasing costs and competition to recruit new supporters by traditional methods, the ongoing struggle to make supporter acquisition online work then surely now, more than ever, we should be examining our databases, our communications programmes, and our service provision to make sure it is the best it can possibly be.
Ostrich effect
Sadly, in many cases, nothing could be further from the truth. We consistently test and evaluate retention programmes for our own interest and learning and are regular ‘mystery shoppers’ of a large number of charities. Here are just a few recent examples we have come across that demonstrate the “same old, same old” approach still being used by too many charities, large and small. Ostrich effect anyone?
“Thank you for your first gift. We would like to exchange your name and address details with likeminded organisations, do you have any objection?”
Truly, we are staggered by the number of organisations (usually large) that we make a first gift to, and their first response is to check whether we mind our data being passed on, especially when it is done by telephone. Imagine, the first message back after giving some hard earned cash isn’t “great, wonderful, thank you – look at the difference you will be making”, it is “how can we use you to our advantage”. I can’t say it leaves me feeling great about my gift.
Valued? No.
Important? No.
A commodity? Yes.
A nameless individual in a vast pool of nameless individuals? Certainly.
Likely to feel well disposed to the charity in the future? What do you think?
“Thank you for all your ongoing support this year it means so much to us”. In response to one gift made eleven months ago.
We talk up segmentation all the time yet what can possibly be more irritating or off-putting for an occasional donor, who has only ever made one gift quite a long time ago, to be told in the opening paragraph of a mailing what a difference they have made over the year with their “ongoing” support. No they haven’t. They gave a tenner in February. Of all the donor research we do, this is one of the most common constant irritations that frequently comes up.
The reason why is because it makes the donor feel two things: first, that you don’t know who they are, and secondly, mean and guilty for not giving more than once. The usual result? They use the irritation you’ve made them feel by misjudging their support so badly as the final reason to stop even thinking about giving to you ever again.
“You need to cancel your Direct Debit? Certainly, I can do that for you.” (AKA letting people leave without a fight).
I ring up to cancel a Direct Debit to a charity and thirty seconds later it is done with barely a murmur. I ring up to cancel my phone contract, or my Sky subscription and I’m into negotiations. This offer, that offer, reduced terms, incentives – a carefully planned and executed programme designed to keep my custom, even if it is reduced in value, one way or another.
If I’ve spent £120 recruiting someone to my charity and they want to leave surely we need to try and convince them otherwise. And “my financial circumstances have changed” is not a valid reason either – they are still choosing to cancel you ahead of other things – why? At the very least engage with them to find out more – what they tell you could be used to stop someone else leaving.
Reactivating lapsed supporters straight back into the programme they lapsed from.
Definition of insanity
According to Einstein, “the definition of insanity is doing the same thing year after year and expecting different results”.
So you’ve been sending me mailings, newsletters and e-mails for twenty four months, I haven’t responded, you ring me up, convince me to give another gift, and then put me right back into the exact same mailing programme I haven’t engaged with for two years. What would Einstein say?
Sadly, these are just the tip of the iceberg. We have lots of other examples: the “all about me syndrome”, the “can’t be bothered to say thank you properly issue”, the “our donors don’t like that assumption” and many, many more. Sadly, our list is much too long.
And lastly, it is back to our friend the ostrich, or rather his effect. Too few charities are willing to acknowledge this situation exists – that donor retention remains shockingly poor. As a sector, we desperately need a radical shift in attitude, approach, flexibility and service delivery before we will ever make genuine inroads into that one third of donors who leave us without a second thought in their first year.
Now I must be off. I’ve seen some nice looking sand I need to bury my head in.
About John Grain
Since 2004, John Grain Associates (JGA) have worked with hundreds of clients to help them raise more money. Specialists in individual giving and supporter care, they are passionate advocates of ethical and transparent relationship fundraising. Over the past 15 years JGA have worked on developing and implementing strategies, generating imaginative and engaging creative content, providing insightful research, offered interim support and mentoring, and delivering a range of bespoke supporter care training programmes.