Donor Retention: The Surprisingly Simple Strategy with Nathan Hill - NIO Summit 2024

ladies and gentlemen he needs no introduction but we're going to do it anyway please welcome the one the only Nathan [Applause] Hill woo you feeling good you feeling good I know I am the last thing that stands between you and a glorious happy hour coming very soon so I'm very aware of that we'll try to keep things on time and it sounds like maybe we'll even get out early that sounds great um we got a big number up on the screen screen it's 44.5% where do you guys see there it is here we go 44.5% does anyone know what this number means if you have an idea Shout It Out retention retention it is retention that's what we're talking about today this is possibly the most critical metric that we could be talking about today because if you can get even a little bit of a lift in your overall donor retention it lifts your entire program I don't need to tell you this you know this stuff 44.5% is the industry average donor retention rate going back for the past 7 to 8 years um when I've talked about retention in the past I normally tend to think like we're we're kind of stuck in this 44 to 45% range retention never really seems to change no matter how many times speakers come on stages and share all sorts of new ideas and things that we can do to move the need alarm retention what's actually interesting is when you go see all the data plotted over the past seven to eight years Bloomerang has a great uh blog post that breaks down some of this data we're we're actually not stagnant it's actually on a slide it's a slow slide but I'm sounding the alarm if the alarm hasn't already been sounded it's getting worse it's not getting better somehow we are year-over year there's some little fluctuations okay but year over year we're getting worse of retention um their data Runs Out in 2021 maybe there'll be a new blog post after this with some new data that'd be awesome I found in 2022 some data from Gib smart that puts retention at about the 44% range that seemed right about in line again there's ups and downs what stumps me a little bit is 2023 as far and wide as I have searched to find a definitive metric to report on the industry retention rate for 2023 have not found one yet there's other sources like fundraising Effectiveness project they report quarterly but it doesn't give you a full like for the year retention number at least not that I've seen it just feels like we're all just bored are we just bored of this number because it's always stuck here to the point that we're just like we know it's going to be 44% or 45% so what's the point of even measuring it there's nothing we can do we're always just stuck here that's the vibe that I'm getting I don't know if you feel the same way does anyone else feel that way are we just tired of this number being stuck that's how I feel I heard a whoop I don't know if that's good or bad I think it's bad uh this is my favorite way to build a presentation is just go ask Google your questions and then go screenshot the answers and put it up here uh there's a lot of great ideas that exist for how we can go improve retention uh so this is the little Google AI summary I'm not going to read everything to you cuz you can read but we will call out a few things how many people right at the top of the list how many people think that it's a good idea to go thank our donors show hands anybody think that's a good oh yeah all the whoops today here we go um keep your hand up or put it back up if you think thanking our donors could actually meaningfully move the needle on retention would donors be more likely to give to you again next year if you just said Thank you in a meaningful way I think every hand should be up I don't see every hand so maybe we should chat afterwards but but every hand should be up for that the second one be personal who thinks I see Hands waving already you know where I'm going put your hand up if you think that being personal with our donors getting down on a human level to communicate them with them is that going to move the needle does that help someone trust us and want to give again next year okay okay so we all agree one more be transparent who thinks that if we took the time to actually cultivate our donors in a meaningful way to the point that they understood where their gift was going how it was being used and actually built some trust that way would that help people choose to give again next year probably head nods hands up okay these are all good things are we are we all trying to do these things yes we are at least we think we're going to look at some data that might actually challenge that um we've been on this journey for the past year and a half or so trying to understand what actually works to move the needle on this most critical metric and we've done a lot of these different mystery donor research studies it's what we like to call them Tim this morning chatted about a few of them this is our most recent research series it's called a very short sweet title easy to remember the comprehensive online donor retention Benchmark report part one two three and four there's four parts you can pick up every single part of it at um the next after Booth if you'd like to today we're going to zero in on this report that's all about new donor welcome series what we did with this report that was a littleit bit different was we actually teamed up with our friends at virtuous so we could see not just the donor experience when you go make a bunch of donations but actually sync that up with the retention performance of those organizations when you look at data in this way you're mapping out the whole donation experience what you can't do easily is say okay this organization does this thing and this thing so and they have really high performance of retention so this must equal that that's not how the data works so what we have to do when we look at data in this way is look for patterns in the data what are the trends because those are going to give us ideas of things that we can actually go put to the test so that's been our goal with this series of research is let's learn some of the things that have the best indicators that they might actually move the needle in a positive direction now I've said from this stage before sometimes when we start down this road of of research trying to find new Innovative tactics and ideas it can be a little depressing to see actually where the state of things is so I don't have anything like brand new radical Innovative for you at the moment but here's what we found more than one in four nonprofits 27% of organizations they did not send a receipt to a new donor who just gave online within seven days how many of you when you go order something on Amazon or any other kind of online retailer do you expect to get immediate confirmation that you just made your purchase I just bought some stuff on Thursday because I needed to go print a bunch of note cards for our live stream I did that Thursday evening I expected that on the website in the app and in my email I had immediate confirmations that I was going to get these little postcards in the mail by noon the next day that is the world we live in and that's the expectation but one in four organizations doesn't even send a receipt within seven days the numbers aren't great when you go look at thank yous either 51% that's worse that's more than one in two organizations do not send a thank you within the first s days of someone actually donating online online people where where communication is expected to happen instantly and a lot of these organizations are even in this room every single one of these organizations has the tech stack to be able to do this stuff in an instant yet we're not doing it I'm not quite sure why if we zoom out a little bit more let's look at the first 90 days of communication we would call this like the primary new donor onboarding window that most critical time to set a good first impression for our new donors 33% that's one and three 33% of organizations did not send any cultivation within the first 90 days and I'll let you in on how we divide Up This research because it's really complicated when we go look at all these emails over here we have a big bucket called donation appeals and that's anything that ask for money over here we have a big bucket that's called cultivation that is every single piece of communication that does not ask for money we call it cultivation you can go tease that out a bunch of different ways but when we're looking at this number we're talking about 33% % of organizations did not send anything that didn't ask for money within a 90-day period of someone giving a gift online I heard someone say whoo yeah whoa this number isn't great either back to 51% over half of organizations actually made no attempt within 90 days to lead someone to either upgrade to monthly or give any form of second gift we all just raised our hands at all this essential stuff and said this might move the needle on retention and we think we're doing it but the data says most of us aren't something's broken is it technology is it our text Stacks is it our people is it our systems is it our processes I don't know I don't have that answer but something is getting prioritized over this essential basic foundational level stuff and that's not good and you may say well we have lots of problems to solve and so does this really matter does this really move the needle in a significant way and how much much so maybe if I had the data I could actually go prioritize it so does this stuff really matter I want to spend a few minutes looking at a lot of things that we have learned about the new donor welcome series and what makes it impactful and effective we just spent all day yesterday with a group of about 60 fundraisers going through a workshop where we unpacked new donor welcome series who is in that Workshop give me a whoop we're whooping today oh yeah whoop whoops how about that we had lots of people working through how to go either build a new new welcome series or actually go optimize their current one lots of different ideas here's a handful of them what we found through AB testing is that the most effective welcome series are sent from actual human beings and you've probably seen some of these experiments before but but this requires an authentically human approach from top to bottom number one we need to send communication from an actual person version a the control on the screen is sent from the brand name of the organization version B is sent from Audrey and guess what she's not marketing to you she just has a quick question holistically across the whole email she is communicating like an actual human being with warm genuine personal tone the call to action is exactly the same the value proposition at its core is exactly the same it's just phrased in a little bit more authentic of a way this led when you even just looking at opens led to a 330% increase and opens let alone all the downstream impact of more engagement more clicks ultimately more conversions we found when you send something like a newsletter often times not every single time but often times we see the same approach lead to better engagement version a looks like a pretty standard newsletter it's got all the sort of placeholders for putting in your images and your htma call to action big buttons they stand out in this big purple color you got descriptions of all the various resources it looks like a pretty standard newsletter version B is a two- sentence note from a human being his name is Jacob and then he adds three bullet points that are the resources he would like for you to go engage with he thinks they might be helpful for you and valuable for you you can click on those and 77% more people actually did than for the more heavily designed marketing kind of best practice template the more authentic approach led to better engagement we see the same sort of thing when you go look at a donation appeal as well version a and version B are the exact same email if we had time I would let you come up here and go make sure every single word is the same they are identical except for version B looks a heck of a lot more like an email that you and I could send each other just out a Gmail they get rid of all the different design pieces there's still more they could probably do but even this uh first few steps of removing the design looking more like a human email will L to a 29% increase in donations some of you are not in your heads long because you've seen this type of stuff we know a lot of this stuff works we put it on the stage for nine straight years but often times we're not putting these things into practice and we're seeing poor performance as a result we' found the most effective welcome series they leverage content offers for cultivation and I want to introduce you to a couple of terms maybe they're new to you um when I think about cultivation I like to divide that big cultivation bucket we talked about into two smaller ones one is active cultivation and one is passive cultivation most of us probably live in the passive cultivation Camp most of the time that's things like newsletters and organizational update emails where we put a bunch of information in an email there's not much you can do with it but we think it might be helpful for donors to stay informed we drop it in the email we blast it out done deal it's pretty passive that doesn't mean it's bad information that doesn't mean it's not a thing we should have to in send to our donors but there's just not a lot to do with it other than read it absorb it move on active cultivation is sending things like ebooks and value to the donor or the potential donor or they actually have to take an action to engage with it and then they draw lots of meaning and value from it I call it active cultivation in this experiment this is actually an email welcome Series so these people have just signed up to stay connected with the organization they haven't all donated yet the control series looks like this where they send a survey and then they send an about email that's that passive cultivation Camp just information about the organization and then they send three different emails that share a story of impact and they all have some sort of soft donation ask maybe a PS we really like to combine those cultivation and those appeals together it's some for some of us it's hard to go send a cultivation without a little link that says hey if you were inspired by this would you give I'd encourage you to split those things out more cultivation has never hurt anybody it only leads to better results but that's what they did they sent these stories of impact they've got soft donation asks and then they make a direct appeal and then they hand you off to the newsletter pretty standard frame work for an email welcome series not bad but here's what they found running this test they sent the first two emails are the same in the treatment a survey and about the organization email and then they send a series of six emails that are all sharing an ebook something that is going to provide tremendous value to the donor or wouldbe donor it's relevant to the cause it helps them stay more informed about the cause that they are wanting to stay connected to it's educational in nature it provides value to them they have to actually take an action to engage with it and then at the end of the series they do not make a direct appeal they just hand you off to the newsletter and would you believe me if I told you that this led to a just a small little lift I I just saw somebody's jaw drb just a small little lift in 9 92% increase in donations how is that even possible well in short it looks like this you go send a cultivation email it's talking about an active cultivation offer something that you can actually go engage with and draw meaning and value from you said send them to a landing page where they read more about them they say oh yeah that's what I want they fill out the form and they land on a confirmation page but this confirmation page is not one of our crappy little confirmation pages that says oh thanks do you want to share this on Facebook or Twitter or Pinterest or choose your social media side of choice it leads them down a pathway towards where they can actually choose to give youve just been activated by this content now you have a chance to actually put an appeal in front of them and lead them towards choosing to give to you either for the first time second time third time Etc this is how you can turn cultivation into a pathway to lead towards donations that's how they unlocked a 92% lift in donations without sending more appeals to the inbox we found this that the most effective welcome series they ask people to just do one thing at a time here's a really simple test version a asks you to do six different things they're trying to pack six different links and resources and stories into one email version B the treatment asks you to do one thing it technically has two links but now they're spending more of their time it's about the same length of email but it's focused on driving you to just make one decision when we go overload people with information they are going to get overwhelmed by that information and choose the easiest path which is to do nothing at all but if we ask them just to do one thing we've got a better shot at actually getting to getting them to choose to take a step forward and engage with us they saw a 96% increase in people actually clicking through and engaging with the content by asking people to do one thing at a time none of this is rocket science you've probably seen lots of these different tactics before I I'll share one more with you and this is one of my favorite experiments in our uh experiment Library the most effective welcome series across the board are authentically human and they communicate in an authentically human way version a looks like this it's seven emails long looks pretty typical uses some branding and design and header and colors and images and buttons and signatures and social media icons and all that stuff that comes baked into every like MailChimp email template HubSpot email template Etc version B takes a little bit different of an approach it still has seven emails but across the board it's authentically human I won't read all these bullet points to you because you'll get the slides and you can see them too but across the board it's sent from human beings it's using this more authentic design approach to the communication every single email is designed to provide value to the donor or wouldbe donor in the inbox they're using a in that plain teex style approach what I want to draw your attention to is email number one and email number four they're both called a reply back email this gets scary for some of us because what they're actually doing is they're not asking you to go fill out a survey or click a link to tell me more information about why you signed up or why you gave they're actually asking you to hit the reply button and have a real conversation one to one that's scary for some of us and I get it because we do not need more emails in our inbox I don't need more emails in our inbox but that's the approach they take because email at its core is designed to create one-o-one connections and facilitate conversations what they found was that this holistically human approach led to are you ready 33% increase in opens a 42% increase in clicks an 875 per increase in donations and a 99% increase in overall Revenue you may be wondering I see some pictures I'll let you take a picture of the slide does that stuff actually matter because all we're talking about here is how to lift engagement and clicks and opens and even conversions which are all good and important things to get more people to engage and donate now but does it get people to give again that's what we're