Blog Fundraising Research

One Sure Way to Kill Online Donor Retention

By: Michael Lewandowski, Senior Digital Strategist

There’s a common assumption in the fundraising world that more communications with donors is a bad idea. This line of thinking suggests that your donors are costly to acquire, so you don’t want to drive them away with too much communication. Therefore, once you’ve acquired a donor, absolutely do not send multiple communications in a month. After all, donors are fragile, and our relationship with them is tenuous at best, so we need to protect and shelter them from being bombarded.

But there’s actually an idea that’s far worse than over-communicating – not sending enough email communications to your subscribers.

A Growing Problem

Inboxes are being inundated more and more as for-profit businesses themselves have realized that sending emails is actually quite profitable. Just look at this chart showing big box retailers and their increase in email sending volume from 2016 to 2017. Like it or not, this is what we’re competing against.

Growth of Email Volume by Big Box Retailers

The simple truth is that it’s increasingly difficult to get in front of people via email, but even more so if you’re cutting back on frequency. You’re actually more likely to reduce your visibility by sending fewer emails, especially in light of such increased inbox competition. Choosing not to participate in the battle for the inbox is not going to help.

Our recent release of the Online Fundraising Scorecard 2.0, a follow-up of 2013’s ground-breaking study on the online donor experience, shockingly revealed that only 16% of nonprofits are properly on-boarding new subscribers by sending a welcome series. And almost one-third (29%) do not send an email to a new subscriber immediately after signing up. (Download your copy of Online Fundraising Scorecard 2.0 to get more leading insights.) Based on our study, most nonprofits are seemingly gun-shy once a new subscriber is acquired.

How to Actually Retain Donors

This is particularly concerning given the latest research on the retention of online donors. M+R’s 2018 Benchmark Study of over 4.6 billion emails and over 11.9 million donations, revealed that the median retention rate for first-year online donors was 25%, and repeat (2nd and 3rd gift) donors had an average retention rate of 60%. (See below for a full breakdown).

Online Donor Retention Statistics from M+R's Benchmark Study

But most interestingly, they also saw that there was a strong correlation between email sending volume and online donor retention. Every additional fundraising message sent (per subscriber) was correlated with a 0.20% increase in overall donor retention for the year. This essentially means that if you’re holding back on sending emails, you’re reducing the likelihood that you’re going to retain donors. And their research applies not just to newly acquired donors, but existing online donors as well.

“Year after year, we find that [email] volume continues to climb steadily higher, and so does overall online revenue.” — M+R Benchmark Study

Increasing Your Email Volume Isn’t Enough

So is sending more emails the answer? Based on this data, it’s all too easy to assume that all you have to do is dial up the frequency and you’ll boost retention and online income. But that would be a faulty conclusion. The crucial caveat is that the emails you’re sending constituents have to matter. If they aren’t relevant to donors who support your cause, you’re likely to increase frustration, unsubscribes, and spam complaints.

To help explain how relevancy fits into the equation, Dunham+Company has come up with the following Donor Communication Heuristic:

3RL + 2CV = SC + Re

Where: Relevancy (RL) + Communications Volume (CV) = Subsequent Conversion (SC) and Retention (Re).

Note that Relevancy is weighted 50% more than Communications Volume because it’s ultimately that much more important a component for donor retention.

What’s Missing from Your Fundraising Game?

To quote hockey legend Wayne Gretzky: “You miss 100% of the shots that you don’t take.” If Wayne were in our shoes as nonprofit fundraisers, maybe he’d say it like this: “You’ll lose 100% of the donors that you don’t communicate with regularly.” Each relevant email that’s sent is indeed taking a “shot” at further growing and engaging a donor’s heart for your cause. And while each “shot” may or may not work immediately, the longtail outcome is most likely a positive one.

So when you’re doubting if another email should be added to the communications calendar, be encouraged that it’s more likely to have a positive impact on the donor file, rather than negative results — as long as it’s relevant content. The risk is far too great to lose donors that you fought hard to acquire, due to a lack of communication and cultivation. It’s far better to matter more, to more donors, by sending more relevant emails.

Get more insight in your inbox

Sign up below for fundraising insights, leading industry trends, and proprietary fundraising research.

Get more insight in your inbox

Sign up below for fundraising insights, leading industry trends, and proprietary fundraising research