Why the Sales Funnel isn’t Enough for Donors

The Customer Hourglass’ Offers a Fresh Way to Look at Fundraising

How would you respond if someone were to ask about the state of your fundraising operation? If you’re like a lot of folks, you might start talking about whether you hit your annual contribution goals or mention how many new donors your latest campaign attracted.

No doubt, those are important indicators. But there’s a tendency among fundraisers to focus only on short-term objectives. And that could prove a hurdle to reaching your long-term potential.

Sure, the latest numbers on a spreadsheet are important, but what’s sometimes forgotten is how an organization manages its relationship with the donor. If nonprofits lose sight of that, any immediate wins will prove fleeting over the long haul.

Research has shown time and again that attracting new donors is much more expensive – and less productive – than retaining existing ones. So rather than looking only at what a supporter can give today, we need to be equally focused on making sure they’re energized enough to continue giving and serving as brand champions for your nonprofit.

A report by the Hartsook Centre for Sustainable Philanthropy at Plymouth University in England really drives this point home. It found that even a 10% improvement in donor attrition rates leads to a 200% increase in long-term value. (L1, p2) That’s a remarkable multiplier effect, to be sure.

Managing the donor journey

Needless to say, nonprofits need to direct their attention not just to the campaign ahead, but to the lifetime value of their donors. That means looking at the entire “donor management journey.”

We encourage our clients to use the metaphor of an hourglass, which reflects the dual goals of acquiring donors and building your relationship with those individuals. It’s a more holistic way of thinking about your fundraising goals, and it’s one that can be truly transformative.

The top half of the hourglass looks like that venerable sales funnel concept that’s long served as a reference point for marketers and fundraisers alike. Successful organizations are able to build awareness among potential donors and help them evaluate their giving options. From there, the goal is to turn a significant subset of those leads into actual givers.

But it’s the bottom half of the hourglass that tends to get overlooked, to the detriment of the organization’s long-term goals. It’s the half that captures the importance of managing those donor relationships after than initial pledge. The more successful you are, the wider that hourglass gets at the bottom; it means more people are getting involved in your efforts through word of mouth.

Here’s the good news: technology is allowing us to understand donors and communicate with them more effectively than ever before. An integrated CRM can pull information from a whole range of data points – where donors are going online, what emails they’re clicking on and so on – allowing you to communicate in a way that’s more personal and engaging.

From donors to advocates

Let’s take a closer look at this second half of the hourglass:

Repeat. Perhaps one of your prospects has opened up a piece of direct mail or responded to an ad and decided to make a pledge. Success! But how do you get that individual to give again?

The simple answer: stay relevant. Don’t blast a mass message to your entire donor list and expect the individual to maintain her interest. This is why it’s so important to have the right tools that can provide you with pertinent information about who this person is.

Are you able to gather and consolidate data on what newsletter stories they click on or where they’re going online? If you are, you’ll be able to splice your audience into distinct segments and follow up with more targeted, personalized messaging that keeps them interested.

Loyalty. It’s one thing to have an affinity for a particular organization. But it’s quite another to feel you’re actually a part of that entity. Bridging that gap is something any successful nonprofit needs to figure out.

Find a way to reward your most important donors by bestowing on them a special standing. Consider giving those with a certain lifetime contribution a “Gold” or “President’s Circle” status that makes them feel like a valuable part of the organization. Perhaps you’ll want to provide a tangible gift for sustaining donors.

Even a simple feature like giving contributors an online account where they can change their contact information or revise their membership level can help create a sense of connectedness with the organization.

Referral. Each contribution that a donor makes is extremely valuable, but it’s even better when they decide to recruit other donors from their network of friends and family.

How easy do you make it for benefactors to share social media posts or videos about a campaign you’re working on? Do you have tools that allow attendees to easily sign up their friends and family members for an event?

By building out the pool of qualified donors and prospects, you’ll have a much easier time hitting pledge goals going forward. Of course, it’s helpful if you have the tools in place to gather data on new prospects and create 360-degree profiles for those individuals, which makes it possible to engage in the micro-targeting mentioned earlier.

Advocacy. The bottom of the hourglass is advocacy, which means your donors bring not only their financial resources, but their time and skills, to your fundraising efforts. In a lot of ways, it’s easier to help your donors become advocates in the age of social media. Unfortunately, a lot of organizations don’t take full advantage of those opportunities.

Make it easy for your supporters to build their own fundraising pages, where they can post updates and send tweets about your cause. Ideally, your social media sites should integrate with your CRM, ensuring that your peer-to-peer initiatives stay aligned with your centralized campaign.

Finally, find creative ways to recognize your campaign creators so they feel like they’re valued by the organization.

More revenue, lower costs

Ask yourself: have you put as much thought into managing the donor journey as you have on your short-term goals. If not, it might be time to think about what strategies and tools you need to not only acquire donors, but turn them into advocates for your organization.

The hourglass model represents a powerful internal communication tool, acting as a touchpoint for your overall fundraising operation. To the extent that you can successfully incorporate these seven steps into your organizational mindset, you’ll find yourself generating more proceeds from fewer marketing dollars. And that’s a goal every nonprofit would love to achieve.

Sources:

L1) Sargeant, Adrian. “Donor Retention: What Do We Know and What Can We Do About It?” Hartsook Centre for Sustainable Philanthropy. Available at http://studyfundraising.com/wp-content/uploads/2016/07/Donor-Retention.pdf

L2) Nonprofit Quarterly. Available at https://nonprofitquarterly.org/2016/07/29/keep-donors-right-thing-makes-money/

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