It is said that people are “creatures of habit” who tend to do the same things over and over. That’s certainly the case in fundraising. Donors tend to repeat previous behaviors, including responding to the types of appeals they previously found compelling. Getting donors to repeat their previous actions is critical to donor retention and revenue.
When donors take a foursome at your golf outing or buy a table at your black-tie gala, you invite them back the next year. Inside your direct response program, each unique appeal is like its own mini-event. There are donors who gravitate to specific appeal types and are more likely to respond to them.
The fundamental predictors of direct response behavior are RFM – Recency, Frequency and Monetary. The more recently and more frequently a donor has given, the more likely the person is to respond to an upcoming appeal. And the amount of their previous gifts – Monetary – will be close to their next gift, on average.
Direct response fundraisers use RFM as a tool for selecting donor segments to include in renewal appeals. Some are also using predictive modeling, working with experienced statistical analysts to build segmentation for renewals. But even in sophisticated models, RFM remains a key element.
A predictive tool that is often overlooked is package affinity. While donor response is sometimes quixotic, it’s a reliable truth that donors tend to respond to mailing packages – and other appeals in other media – to which they have previously responded.
The first objective in donor renewal is to always keep the highest number of donors in the active category, which is best measured as the most recent 0-12 month period (or the current fiscal year or calendar year if you prefer). That means job one is getting a gift in the current period.
The next priority is to get the highest possible percentage of donors to make an additional gift in the same period. Most organizations get 1.3 to 2 gifts per donor per year, on average. To get that annual gift and second or third gifts, it’s critical to give donors the types of appeals they want.
The mailings you use in your annual renewal cycle often have unique qualities such as the fund or mission being promoted, membership renewal, or seasonal themes. Often the premium distinguishes the appeal — cards, calendars, name labels, etc.
Originally published on The NonProfit Times, read the full article here.