Today’s focus is on donor retention, as our year-long “Dive the Five” virtual course continues! In fact, you can use the principles you learn here for donor acquisition as well. In for-profit parlance, we’ll be discussing how to “convert customers.” In non-profit parlance it’s all about turning prospects into donors and donors into repeat donors.
I encourage you to make this the year you begin to study psychology and apply it more to your integrated development (marketing and fundraising) strategy. As Daniel Pink, author of To Sell Is Human, has noted: “There’s a gap between what science knows and what business does.”
In this infographic developed by marketing strategist Gregory Ciotti you get a taste of some of the psychology underlying human behavior – and there’s a lot for nonprofits to learn and apply. (If you want more detail, check out the full guide.) I find it fascinating, which is why I’d like to take you through them, one by one, over my next two posts.
Help Customers Break Through Action Paralysis by Setting Minimums.
Research by Robert Cialdini, author of Influence: The Psychology of Persuasion (a book from which I frequently draw inspiration), showed how the American Cancer Society increased donations by 78% simply by suggesting minimums.
ACTION: One way to set a minimum is simply to ask for a specific gift. Rather than a vague “your gift helps” or “your gift of whatever size helps” you can try “Will you consider a gift of $25?” You might want to randomly divide your list in half and test the success of the vague ask against the minimum ask to see what works best for you.
ACTION: Another way to set a minimum is to suggest minimal parameters. In Cialdini’s study, 50% of door-to-door solicitors asked “Would you consider a donation?” The other half of the solicitors added the sentence “Every penny will help?” The added sentence increased donations two-fold. Why? The conclusion was that too often folks think their gift will be too small to make a difference. When they learn this is not the case, they feel free to give.
ACTION: The other way is to break down your ask to the lowest common denominator and ask for that. You’ve seen this approach: “For just 60 cents a day you can save a child’s life.” It’s easier for folks to visualize spending 60 cents to help than it is $219; the latter ask will paralyze them. And by the way, giving too many choices will also paralyze folks. It’s called “analysis paralysis ” or the “paradox of choice.”
Embrace the Power of Labels
Who doesn’t want to be called a “Leader,” “Founder,” “Inner Circle Member” or something of that nature? One study found that people randomly labeled “politically active” were 15% more likely to vote. In other words, folks rise to the occasion – they act as they are labelled!
ACTION: Labels may be used to your benefit in a number of ways. One way is to address folks by their affiliation with your organization, using a flattering adjective. For example: “Dear dedicated alumna” or “Dear Justice Enabler.” Another way is to invite folks to join an elite group – such as a giving society. If you ask folks specifically to become “insiders” they’re more apt to do so than if you simply wait for them to label themselves that way.
Understand the 3 Types of Buyers
Research breaks buying behavior into three types: (1) Spendthrifts (15%); (2) Tightwads (24%), and (3) Average Spenders (61%). You’ll likely find your donors fall into these categories as well.
ACTION: It might be interesting for you to run a report from your database to see how your percentages compare for (1) Major Donors; (2) Smaller Donors (this might be under $100 or under $25, depending on your number of donors and average gift), and (3) Average Donors (for many small to medium-sized nonprofits this may be folks who give between $100 and $999).
ACTION: You will want to have a different fundraising approach for each donor type. For “spendthrifts” you want to develop a major donor program with a series of “moves” that you manage to assure you make the optimum match between your donors’ interests and passions and your organization’s programs and values [for more on how to do this, get my 50 Ways To Move Your Donors Relationship-Building Solution Kit]. For smaller donors you may want to reframe giving opportunities into “bundles” (e.g. $10/month instead of $120/year) in order to boost their giving. For average givers you may wish to consider the strategy discussed in #2, above, and consider inviting them to join one of your “Giving Societies” – thereby upgrading their level of giving.
Highlight Strengths by Admitting Shortcomings
Research shows that when you embrace your errors folks are more likely not only to forgive you, but also to trust you. And guess what? This holds true even if the fault lies outside your organization! So it’s a good idea to take responsibility whenever something fails to live up to expectations, whether you were in control of what happened or not.
ACTION: A positive way to embrace errors is to discuss the creative solutions you’re considering rather than the problem. Let’s say your organization gets a bomb threat. Rather than dwell on the lack of security, impress your constituency with the steps you’re taking now to ensure everyone’s safety. What if the homeless shelter you promised to build with your donors’ gifts is behind schedule? Rather than blame the contractor, let folks know what you’re doing now to help the homeless woman who you’ll ultimately help in your new shelter. In other words, put the past behind you and move forward with confidence and humility.
Use Urgency the Smart Way
Urgency and scarcity will drive sales (and donations). But not unless your audience believes you.
ACTION: Make sure you describe why the situation is urgent. Specifically, why does your donor need to give now? Perhaps you have a challenge grant and they can double their money. Perhaps it’s winter and homeless people risk freezing if you don’t get them off the streets. Perhaps it’s the end of the calendar year, and this is their opportunity to grab a tax deduction. Perhaps you Gala event is filling up, and this is their last chance to buy tickets.
Before you go, I hope you’ll make a note of how helpful an understanding of some basic psychological and behavioral neuroscience principles can be to the effective practice of fundraising. Stay tuned next week for Part 2!
Do you use psychology and/or neuroscience in your fundraising practice? If so, please share!
Learn How to Give Donors What They Need
Get the Donor Retention and Gratitude Playbook with 6 separate companion guides (at a bargain if you buy the bundle)! Or you can purchase them individually. Taken together, they are a complete Donor Retention ‘Bible’ — everything you need to raise more money by keeping your current donors and increasing their average gift! It’s filled with hands-on, practical information garnered from my 30+ years working in the nonprofit trenches. This stuff works! Grab your bargain bundle here.
Image courtesy of Freedigitalphotos.net