Low-Lift Donor Retention

Tony Martignetti
Hello and welcome to Tony Martignetti Nonprofit Radio, big nonprofit ideas for the other 95%. I'm your aptly named host, and I'm the podfather of your favorite hebdomadal podcast. I'm glad you're with us. I'd suffer the embarrassment of pachyonychia if you nailed me with the idea that you missed this week's show. Here's our associate producer Kate to introduce it.

Kate Martignetti
Hey Tony, here's what's coming. Low-lift donor retention. So many nonprofits have a leaky bucket problem. Donors don't stay after their first gift. We all know retaining existing donors costs so much less than acquiring new ones. Chris Vaughan shares his thinking on keeping donors in the bucket through mission connection, engagement, relationships, retention rate ownership, welcome streams, and more. He is co-founder of Sequence Consulting. On Tony's Take 2.

Tony Martignetti
A book update.

Kate Martignetti
Here is Low Lift Donor Retention.

Tony Martignetti
It's a pleasure to welcome the co-founder and chief strategy officer of Sequence Consulting, Chris Vaughan. He helps associations grow their membership, revenue, and impact. He's a frequent speaker and writer on the future of associations, membership marketing, and growth strategy. The company is at sequenceconsulting.com, and you'll find Chris on LinkedIn. Welcome to Nonprofit Radio, Chris Vaughan.

Chris Vaughan
Thank you, Tony. Great to be here.

Tony Martignetti
I'm glad you are. Thanks. Donor retention. Why don't you set the stage? We've heard statistics about dismal retention rates and costs thereof. But it's worth repeating because we don't seem to be getting any better. So please help us, like, some motivation about why we should be paying attention to retention.

Chris Vaughan
Yeah, first, and just by way of background, our focus is primarily membership organizations, and we've been working with them to help them grow for the last 25 years. But we've also worked with major fundraisers, right? Folks like American Lung Association, the ARP Foundation, Jewish United Fund. United Way, and so on. And what we've observed across the years is that the retention issues are exactly the same. They're almost identical, right? The struggles are the same, the root causes are the same, and the solutions are the same across membership and across the donor lifecycle, which is interesting, but also really, really valuable because all the lessons that we've learned from helping associations plug their retention leak and grow also work, right, in the fundraising context. And we know this as background. Okay. So on both sides of the equation, yes, the retention numbers are dismal. Fundraising Excellence Project says overall retention, fundraising donation, donor retention is about 43%, which is down 4 years in a row, right? So I believe, don't quote me, but I believe it's at an all-time low, right? So the trends have been declining for a really, really, really long time.

Tony Martignetti
Fewer than half. We're keeping fewer than half of our donors.

Chris Vaughan
Total, fewer than half of your total donors, right? Or put it otherwise, half of your— more than half are walking out the door, right, every year, perhaps never to be seen again. What really jumps out about me in those statistics is first-time donor retention, right, which the FVP says is the single most important unsolved problem in fundraising, is that less than 1 in 5 first-time donors ever donate again. Man. So think about that, and that 60% of the overall funds that you raise are from repeat donors, and you can see where the leaky bucket is, right? And that's what we call it, the leaky bucket. You know, you're working hard to acquire new donors, you're bringing them in the door, but 4 out of 5 of those are never going to write a check to you sort of ever again. I have this image in my head, right, of Wile E. Coyote, you know, running off the edge of the cliff, and his feet are just spinning, spinning, spinning, spinning. That's acquisition. You know, that's the way I think about it, is you just got to keep running faster and faster replace the donor that you just got, you know, last month.

Tony Martignetti
The Roadrunner has the answer. If the two could come together, they would solve this problem because the Roadrunner knows what he's

Chris Vaughan
doing. Exactly. Exactly. But we wouldn't have much of a cartoon series.

Tony Martignetti
Yeah, well, all right. Well, we'll put the kids aside. I mean, we're trying to solve an existential problem here. All right.

Chris Vaughan
That's true. And we're also really, really bad at recapturing those lost donors once they leave, right? The report says we— 3%, 3%, that's the best we can do. So

Tony Martignetti
3,

Chris Vaughan
1, 2, 3 folks who have, uh, who know about us and have cared about us enough to, to make a gift at some point in the past, um, 4 out of 5 of them are going to walk, and less than 3% of those will ever come back and give again. So it's, it's a real challenge, um, and it's a real growth challenge, right? It's like driving a speedboat with a hole in the bow You know, it's, it's really difficult to grow if you're constantly plugging the hole right behind you. So that's, that's the dynamic. I mean, that's the setup. And I'm sure everyone who's listening to this podcast feels that, right, every single day.

Tony Martignetti
So what, what, what is it? Uh, why don't we get at some of the causes that you've identified that you want to talk through, and, and we'll, then we'll, we'll make our way through the, the donor experience and how we can improve it. But what are some— yeah, what are some root causes you're seeing?

Chris Vaughan
So, so, so why do donors lapse? Why do members lapse? It's never the mission, right? It's not like they, they lose heart, right? Or, or they stop caring for the reasons that they cared about in, in the future. Um, it's that they don't see themselves in the mission, right? So they don't see it in a way that's personally relevant to them, right? And ties back to the things that they care about personally that kind of brought them to your mission in the first place. I think that's, that's one really important one. It's a sense of impact, right? People don't come, they don't make gifts like this, you know, just because they want to be a part of something. They want to make a difference, right? They want to make an impact. They want to know that they're part of something that's changing a world, the world in a way that means something to them. And that connection gets lost. Sometimes it gets lost immediately, right? They just, they don't know where the impact really, really was. And then there's the sense of relationship. And not in the sense that people are coming to these kinds of nonprofits for, for community, but they want to feel like you know them, right? That, that you, you care about them, that you acknowledge them as, as people and as donors and as part of your organization. And most organizations are really bad about that for, for a number of reasons. But those are the primary reasons is, you know, it, it doesn't connect. We don't connect very well to the people and we don't connect them very well back to the mission. that they just contributed to.

Tony Martignetti
So, you know, when we talk about a relationship, I mean, we're talking about a first gift. So it's not gonna be a deep relationship, but are we treating it like the beginning of a relationship or are we treating it like a mere transaction?

Chris Vaughan
Exactly. And I would say that most kind of new members feel like a target, right? Less than a partner, right? Sort of, you know, we've hounded them down, we sort of chased them down, we've got them to give one gift and they're like, okay, Now what, right? What's gonna happen next? In the donor experience, what typically happens next? Nothing, right? Perhaps nothing. We eventually will acknowledge the gift. That could take a long time, right? Small staff organizations that are overloaded, right? That's sort of one of the things that's easy to push to the bottom of the pile is donor acknowledgement, donor recognition. I've been on the other side of that myself. I've donated to new organizations, right? Whose mission spoke to me or I felt compelled to, and don't hear from them for weeks and weeks and weeks. Yeah. And then, and I literally forget that I did it. I have to look them up and go, okay, who, who is this that's writing to me? So, I mean, I think that was a missed opportunity, or our first opportunity to connect with one is one that misses the message, right? So maybe we acknowledge the gift, maybe we talk more about the organization and ourselves and what we do, but we miss the opportunity to make that initial connection. In such a way that is going to bring them back, right, to make that next gift.

Tony Martignetti
Are you envisioning some kind of a message about the impact of the gift that you made? You know, because of, because of you, this work continues, or we can do this, or what are you envisioning in a, like, in an ideal first communication? Not a— hopefully it's not a tax receipt, you know. You know, exactly. Right. I mean, let's not send— okay, let's get that off the table. Like, it shouldn't be a tax receipt. That can come later, or it doesn't even need to come at all. I mean, you can, you can have a narrative letter that's— that includes the date of the gift, the amount of the gift, and then goes on to— well, letter or email. I'm not suggesting it has to be print, but whatever the channel, uh, that ties back to what your gift did.

Chris Vaughan
Exactly. And so, so, um, real-life case study, work that we did with American Lung Association. Although they're quite large, I think all the lessons learned apply, right, to small and medium-sized nonprofits as well. Yeah. But they were in exactly the same place where only 25% of their first-year donors would, would ever give again. And they had a file of several, several million lapsed donors that weren't coming back, right, that had gone back about 5 years. So that's very typical. Uh, problem that you might be up against. Their solve for it was, was 2 parts, and the first part was welcome stream, which we'll talk about first, and the second part was recapturing lapsed donors, and they had a lot of success. So let's talk about that too. But the welcome stream acknowledged the fact that the decision to give again is made in the first 90 days at most, right? Right. So if, if someone hasn't recommitted that they're going to support you on an ongoing basis in the first 90 days, they probably never will. And often it's made much faster than that in the first month. So a really effective welcome stream responds immediately to the gift, right? Acknowledges it, and then asks questions, right? Tell me more about you, Tony. Why did you give? What is it that you really, you really care about? How is this personally connected to you? So in the Lung Association, people give perhaps because someone or someone in their family Right, has, has, uh, you know, been exposed to, had an experience of cancer or of COPD. So very personal missions. If we know that, we can communicate with you so much more effectively in the future about the things that we know you care about. So the first message was getting to know you. Tell us more about you and, and what brought you here. That was number one.

Tony Martignetti
Okay, well, before we go to number 2, how, how do you get that feedback back? So this is, this is an email and then folks are answering, or it's an SMS?

Chris Vaughan
It's a— it goes in an email, but it's a quick pulse survey. It's just a really quick 5 questions.

Tony Martignetti
Quick survey.

Chris Vaughan
No more. Takes 10 seconds to answer it. Right. But now I have that information on the file and I can segment my communications to you in a way that's 100% more effective. And people appreciate being asked, right? Like, oh, they want to get to know me. I'm not just a number. This isn't just a transaction. This is more than a tax receipt. That's week 1. Week 2, we give them an offer, right? Here's other ways that you could get involved. Thank you, Tony. You told us you care a lot about smoking cessation. You know, here's some programs that you can get involved with, right? Here's some other things that you can do. Here's some other ways that you can give to sort of bring them in, sort of invite them into the organization in ways beyond writing checks. Also important, right? Sort of expands the relationship. And the third week, and this is counterintuitive, is to ask again, right? Make another gift 3 weeks after the first. And the campaign was incredibly successful, and many, many people did because it was recent. Right? It was personal, right? And we had shown both interest in them as a person and connection back to the mission. So very simple 3-part email series. There's no reason any size not-for-profit couldn't do that, you know, based on all the modern email systems that we have now. It really transformed their donor cultivation, right? Their first-year retention skyrocketed. by a campaign really just as simple as that. And over the next couple years, they grew their donor file by 50%, 5-0, through a combination of more effective welcome stream and then this lapsed member campaign that we ran.

Tony Martignetti
Okay, before we get to the lapsed members, all right, so this welcome stream is one a week, so you're doing it in 3 weeks. So you're trying to capture the folks who make that decision. You said most people make it within 90 days whether to give again, but a lot of people make it within 30 days. So you want to get— you want the more recent, you want the within— you're doing it within 3 weeks, 21 days.

Chris Vaughan
Yeah, the sooner the better. And I think that's a big miss in a lot of these organizations is they feel like it can wait. And we see this across voluntary organizations of all kinds, membership and donors. You cannot wait, right?

Tony Martignetti
Why do they— I haven't heard that. I mean, I know we have trouble with retention, obviously. I'm completely On board with and agree with the problem. But I haven't heard, you know, we think we can— we figure we can wait. What do we wait to thank? Wait to welcome? Wait to engage? That's counterintuitive.

Chris Vaughan
All of the above. And the reasons we think are really structural, right? Retention is not a strategic priority. Boards get excited by acquisition, right? How many new donors did you get? No one gets excited about retention, although we can all do the math. Um, that's one reason. No one owns the number in most of these organizations. No one is accountable to the retention number, right? It's just a number that's sort of, uh, out there.

Tony Martignetti
That's true. That's a very good— I don't want you to lose your other points you're gonna make, but that's, that's very true. Acquisition Then the channel gets, uh, the channel gets the credit or the accolades for the number or the percentage of gifts that we got from the acquisition campaign, whether it's digital or print.

Chris Vaughan
That's right.

Tony Martignetti
Then, but then, no, you're right, nobody owns the retention number. How many of those donors did we keep? How many of those made a second gift within, uh, let's say, 30 days or 60 days, whatever our, you know, we should be able to do this, the welcome stream within 30 days. But how many of those folks do we keep? But nobody, nobody really is accountable to that number.

Chris Vaughan
No, right? And that, that's surprising considering how important it really is, right? Like a, a 10% increase in repeat donors will net you far more than a 10% increase in retention. Yeah, because we're going to lose 80% of the folks that we acquire. We know that the other number— and again, this holds true across all kinds of organizations for the last 25 years, right? A first-time donor, maybe 30% chance that they'll repeat. A 3-time donor is 70% likely to repeat.

Tony Martignetti
Okay.

Chris Vaughan
A 7-time donor is 90% likely to repeat. So the more you give, the more you give. And this dynamic, it's like a law of nature in these kinds of organizations, is that there's a threshold. It's typically 3. Beyond which this becomes a long-term commitment. It becomes a long-term relationship. And 3 is not a lot if you think about it, right? If you make a gift, if I can get you to give again in the first 3 weeks and then get to get you to give again a few months later, and now I have a reliable repeat donor at 70%, that's way better than 20.

Tony Martignetti
Yeah, yeah, that's excellent. Okay, okay. I derailed you a little bit. We were talking about why Why are we thinking we can wait? And I made you digress around the thing that boggles me, that I heard, is that, well, that nobody owns that retention rate. But are there other— I want to go back to other reasons why the nonprofit feels that we can just hold off on this?

Chris Vaughan
I think there's a sense of learned helplessness, right? Which is, you know, we've sort of trained ourselves that most donors don't give again. Which is unfortunate because in our experience, this is something that you can change. But I think ingrained in these organizations is the expectation of, I better go find a new one because this guy's not coming back.

Tony Martignetti
Well, that's self-fulfilling. Well, yeah, that's self-fulfilling based on bad behavior by the nonprofit.

Chris Vaughan
Agreed. Most of these organizations don't have a structured welcome stream process like I just described that runs automatically. Which is the ideal. I mean, this is something, you know, as soon as the donation hits the system, it should trigger this campaign to folks. I think a lot of these associations have a campaign mindset, right, is we'll wait until the next campaign to ask again, uh, even if the next campaign is 6 months from now, right?

Tony Martignetti
Yeah, yeah.

Chris Vaughan
By which time 80% of these people have moved on, right?

Tony Martignetti
Well, they've long forgotten. They forgot the donation that they made 6 months ago.

Chris Vaughan
Exactly. And then they go into our lapsed donor file where we generally forget about them.

Tony Martignetti
Yeah, yeah. Every couple years we try to revive them.

Chris Vaughan
Exactly.

Kate Martignetti
It's time for Tony's Take Two.

Tony Martignetti
Thank you, Kate. Just have an update on my book, which is on schedule to be launched September 15th. It's Planned Giving Accelerated: The Cut-Through-the-Shit, No-Nonsense, Practical, Step-by-Step Guide to Launch Long-Term Fundraising at Your Small Nonprofit Within a Week, Starting with Bequests. The title may be longer than the book. Did You Need a Nap? That's the book title. So it's, um, it's, it's, it's interesting once you hand it over to The editorial process, which the first editor is the line editor, which is mostly about substance and organization. Once you hand it over there, then, uh, you— and then it goes to the copy editor. The copy editor is mostly about consistency, rules of grammar, Chicago Manual of Style type. Yeah. Editing. And then it goes back to the line editor, and then it goes back to the copy editor, and then it goes to the graphic designer. You notice the writer is out of it. I mean, they asked me questions, but once you, once you write your manuscript, you're pretty much out of the process except for answering some discrete questions about what did you mean here, or can we say this a little differently, things like that. So interestingly, I'm not, I'm not too involved. I mean, yeah, I'm not too involved. They keep me apprised, but I'm not too involved. Oh, and then after the back and forth with the editors, 2 rounds of that, then you have a proofreader. You don't want to skip the proofreader either. So that's a— it's another iteration you go through. But we're on, we're on schedule. Okay. So not to worry. Nunja worry, as, uh, as my grandpa Martignetti used to say. Would be Kate's, uh, great-grandpa in his Italian New Jersey accent. Nunja worry. Nunja worry. So nunja worry. It'll be out by the 15th of September. And that's just an update on my book. And that's just Tony's Take Two. Kate.

Kate Martignetti
I am excited to— I don't know, I don't think you've shown me like the COVID yet, but I'm excited to see the COVID and the whole entire title on it.

Tony Martignetti
It fits, it fits, it fits. I want people to know this is not some academic text that you're going to find at the Columbia University, uh, master's degree program in nonprofit management and fundraising. It's not going to be at Columbia or any— it's not going to be in any higher education curriculum. This is a practitioner's book. It's fun, obviously, based judging by the title, right? I want folks to know this is a fun book, not an academic planned giving text.

Kate Martignetti
Well, nunja worry.

Tony Martignetti
Thank you very much. That was Grandpa Martignetti. Thank you.

Kate Martignetti
We've got beaucoup buttloads more time. Here's the rest of Low Lift Donor Retention with Chris Vaughan.

Tony Martignetti
Improvements. You have some ideas for small improvements, like for the welcome stream. Okay, 3 messages a week apart. The 3rd one is an actual, uh, ask for a 2nd gift.

Chris Vaughan
So, so another really important part of that campaign was Targeted segmentation. So these types of organizations have a bad habit of talking to everyone about everything they do, right? So we get really excited about all of the mission work we do, and we should because we do such great work. And we figure if we tell you about all of it, right, we'll impress you.

Tony Martignetti
Something will stick. We'll throw it all at the wall and something will stick.

Chris Vaughan
And something is actually going to stick. Well, actually, the opposite is true. I can't, I can't see myself in that. So Lung Association, again, back to our example. had 30 different segments, 30, that they thought about people and all the stuff that they did across their— and that's completely unrealistic. No staff can operate against 30 segments at the same time. You can't accurately bucket people. Yeah. Even with the resources of an ALA, you can't bucket people accurately. And you don't have that much to say about 30 different things, I'm afraid. So we did the data analysis. And we looked at all the millions of folks in the file and what they'd given to and what they cared about. And at the end of the day, it was 3. There's only 3 reasons why people give, right? It's smoking cessation, it's COPD, and lung cancer, right? Those are the causes, and they seldom overlap, right? So maybe I care about cancer and smoking cessation, but by and large, I'm drawn to one of those things and not the other.

Tony Martignetti
What were the other— what were some of the other 27 different segments that had these just things? Evolved over time, over years and years, and nobody looked holistically over time?

Chris Vaughan
Or should you talk to a cancer patient different than a cancer survivor, different than a cancer caretaker? No, not as a fundraising organization. No, that doesn't really matter. What matters is that they care about the condition and the good work that you are doing to help cure it. That was the message that we had to tell.

Tony Martignetti
Okay.

Chris Vaughan
So we were able to— because we were able to go through the file and identify previous donors, what they'd given to, when, and why, we could pretty accurately bucket them into one of these cause buckets that we cared about. And that's all we talked to them about. So if we know that you care about lung cancer, that's all we're going to talk to you about. We're not going to try to convince you to care about some other issue. We're going to talk about all the great work that we're doing to cure cancer and how you can personally help and how much difference your donation made To the millions of dollars that we raise for cancer research, et cetera, et cetera, et cetera. And now I'm speaking your language, right?

Tony Martignetti
And for the newest donors, you have the survey results. You have the quick survey from the first third of the welcome journey. Welcome stream. You call it welcome stream. Some folks call it journey or whatever.

Chris Vaughan
Yeah. Some people call it onboarding.

Tony Martignetti
Onboarding. But yeah, but you have the survey. Now you had millions of donors who you had to categorize into 3 sort of programmatic areas. But for the newest donors, yet you do have the survey results, at least.

Chris Vaughan
You do. And that's 1,000 times more than you had before, right? Right. I have some— at least I have some idea. And then the next time you give, I've just confirmed it, right? That this is the kind of donor you are. These are your issues. These are the kinds of things that you respond to. And that's part of why it was so transformational. Is they never expressed themselves that clearly, right, to donors about why should you care and what difference does it make that you're here. It makes a huge difference. And let me tell you how. So that messaging on top of the urgency, right, on top of the inviting nature of the welcome stream was just a radically different experience than anyone had ever had from this organization before. And, you know, the end result was a massive increase in donor retention.

Tony Martignetti
Now, what was that project like to get this down, get millions of records fit within 3 programmatic areas?

Chris Vaughan
The actual analysis wasn't hard. Convincing the organization was, as you might imagine.

Tony Martignetti
All right, so say some more. Say some more.

Chris Vaughan
The analysis was pretty obvious. But, you know, convincing the organization to think differently and, you know, people are attached to their own area and what they work on, but to convince them that we are all going to be better off if we consolidate our messaging and communication around where the donors are at and not where we're at, we'll be much better off as an organization. And ultimately we did. It's human nature.

Tony Martignetti
But we have to talk to our DAF Lung cancer donors differently than we talk to our online lung cancer donors.

Chris Vaughan
Exactly.

Tony Martignetti
And you're saying just talk to them about lung cancer.

Chris Vaughan
Just talk to them about lung cancer and how you're making a difference.

Tony Martignetti
And people give vehicles. What about, we have our vehicle and DAF lung donors. They need to get different messaging than our online and sustainer lung cancer donors. No. All right. So you're— They don't.

Chris Vaughan
It really doesn't matter. It really, really, really doesn't matter. Up to a point, donation size doesn't really matter. I mean, until you get to major gifts, right? It really doesn't matter. Demographics don't really matter. I don't care how old you are. I don't care where you live, right? I care what you care about. That's the strategy here.

Tony Martignetti
I'm letting that sink in. I care what you care about. That's right. So know what folks care about. And then talk to them about that.

Chris Vaughan
And only that. And that's, that's the hard discipline. I mean, part of the, part of this welcome stream was, uh, we call it the no-fly zone, which is, that's the only thing the new member is going to hear from you. Your new donor is going to hear from you during that first 90 days, our welcome stream messages. No one else is allowed to communicate with them, right? So we're not going to talk to them about every other program we're going to do. We're not going to talk to them about, you know, this campaign or this event or whatever we're going to do. We're going to get, we're going to welcome you. And get you on board, and we're going to get that second gift before we start talking to you about anything else. Critical, critical, critical, because the noise that organizations like this can generate in their enthusiasm dilutes the message, right? And trains people to ignore them right out, right out of the bat. Oh my gosh, I gave a check and I'm getting 10 emails a day. And sometimes that's not an exaggeration. Yeah, but my welcome message is not gonna break through, right? So you have to stop, turn off everything else, no flies around for 90 days, focus on that second donation. That's the win.

Tony Martignetti
90 days. Okay. Okay.

Chris Vaughan
That's hard.

Tony Martignetti
Yeah, well, that's discipline. All right. But you, you want— you're, you're imposing messaging discipline.

Chris Vaughan
Yeah.

Tony Martignetti
On, on any nonprofit that wants to talk about all the work they do because the, the person might be interested in something else, but, but we can get there. We can find that out. You know, we can find that out in year 2 maybe, or in 6— and we can find that out maybe in 6 months. But initially, just talk to them. Just like, just care about what they care about for 90 days. That's right. And then we can, you know, there's time. If you get the second gift, then, well, the second gift means the third gift is more likely. And then the third gift means decades of giving or Are more

Chris Vaughan
likely.

Tony Martignetti
So there's time. There's time.

Chris Vaughan
And just to be a little controversial about it, who cares if they're interested in something else if they're consistently giving to this?

Tony Martignetti
Yeah, right. Yeah,

Chris Vaughan
who cares? Who cares?

Tony Martignetti
Good. No, that's not— yeah, all right. Um, that's excellent. Well, what— so, uh, where should we— what were we talking about? Um, trying to get some Like decision-making, we need leadership buy-in. Where do you want to go next? I just forget what I just suggested.

Chris Vaughan
Let's talk about lapsed donors. Oh, the lapsed donors.

Tony Martignetti
Oh yeah, no, that's right. We're capturing lapsed donors. Thank you. So you have a lackluster host. You need to keep me on track. Yes, the lapsed donor recovery.

Chris Vaughan
This is something that I'm passionate about because most of these organizations give up way too soon. Right? On campaigns. And we found over the years that organizations that are successful keep asking much longer than organizations that just sort of stop and give up and figure out they're gone, right? Some of them never stop ever, right? If you were on the file, they will— respectfully, right? But they will continue asking. We write them off. And that's where that 3% number comes from of us being able to reactivate, you know, some of our lapsed donors. Where actually they should be your low-hanging fruit. Why? Because you know something about them already, right? You know why they gave before, you know how much they gave, you know when they gave before. You can reference all of that in these messaging and communications. They already know you. You don't have to tell the story. They cared about you once enough that they were going to give you some sort of money. So you're— you should be way ahead of the game than you are versus a random acquisition person. But we give up on them as if We assume they're mad at us, right? They left because they were upset. No, they left because they were indifferent. That's a very different problem to solve. So number one is don't give up on your lapsed file. In our ALA case, right, they had millions of folks who'd given in the past who'd never given again, and we put them all back on the target list from as old as 5 years ago. So if you had given within the last 5 years, Mm-hmm. You were, you know, you were in this— we call it the win-back campaign, and it operated very similarly to the welcome stream. It was targeted, it was segmented, it was based on data that we had about you. It went out in a multi-part stream, and it was phenomenally successful. They more than doubled their recapture rate. They recaptured 7% of their file over the next year. So between onboarding And this lapsed member campaign, same philosophical, right, fiber to them. They added 300,000 members to their donor file, net of acquisition. So simply by reactivating lapsed members and activating new donors, they were able to accomplish that kind of growth in their file. So when, when people write off their lapsed donor, they kind of pull my hair out a little bit and say, you know, that's the money that you're leaving on the table.

Tony Martignetti
All right, let's go into a little more detail about the win-back campaign. So it's also 3— is it also 3 messages over 3 weeks, or is it longer? What did you do?

Chris Vaughan
I think the win-back campaign probably went a little longer because I think we had to— we felt like we had to walk them back into it a little bit more, right? But part of it was acknowledging that you had given in the past, right? And being very specific about that. Like, we know exactly what you did and exactly when you did it. Thank you again, right? We really appreciate you doing that. Here's, here's something new. Tell us about you, right? Again, you know, we're—

Tony Martignetti
Oh, the survey you gave them? You give them the survey?

Chris Vaughan
Yeah. Absolutely, right? People want to be asked about that. Tell us about you. Here's some new opportunities for you. It's been a while, right? Maybe you didn't know we were working on this, this, this, and this. Here's some more impact messaging. Uh, you know, you may have been wondering what happened with your gift, but this is what we've done. In the last year, in the last two years, with with these gifts to you know cure COPD or or whatever, and then we ask again. I mean, that that was the stream, and we would continue to. It wasn't one and done. I mean, we would continue to keep them in this win back campaign pretty much indefinitely. We would communicate less frequently, right? We don't want to be obnoxious about it, but the philosophy essentially is never give up. Why would you give up? You know, and, and we were successful. The, the, the longer lapse they are, the harder they are to get back. But we were successful up to 5 years out bringing people back in as active donors who had been inactive for that long.

Tony Martignetti
And this was digital. Did you say this was an email campaign to win back?

Chris Vaughan
All email. It was all email.

Tony Martignetti
It was all email. No print. Right, right.

Chris Vaughan
There was no, there was no print. Print's too expensive.

Tony Martignetti
Yeah. For the, for the low likelihood of, of, uh, regaining somebody. Okay. Okay.

Chris Vaughan
So, so, you know, they had Salesforce, right? Big expensive, you know, data and email tool, which was overkill for this, right? You don't need all that. I mean, any, any donor system that you're running has the capabilities, or you can very easily bolt them on to do this kind of, you know, trigger campaign email that I'm talking about. You know, any organization has the ability to segment their file, especially now, you know, using AI. It's actually very easy and very quick to do the kind of segmentation that I'm talking about and put it back in your donor file. So technology is not the obstacle anymore. I think it's, it's right strategic framing, right? Sort of thinking first, A, that retention is important, right? And, and B, that it, it, it's a program, right? It's not something that happens. It's something that we have to intentionally design.

Tony Martignetti
You have, um, some thoughts about, uh, leadership and structural decisions creating the churn that we're talking about? What's your thinking there?

Chris Vaughan
The first was one we've talked about already, which is prioritizing acquisition over retention.

Tony Martignetti
Okay, good.

Chris Vaughan
As, as, as, as an organization. Um,

Tony Martignetti
well, another one would be dismissing your lapsed donors.

Chris Vaughan
Dismissing your lapsed donors for whatever, for whatever reason. And again, I think there's maybe this sort of sense of learned futility, which we haven't been successful in the past, therefore we'll never be successful in the future, even if we do something differently, which our experience says is completely untrue. But I do think there's sort of the kind of ingrained ways of thinking in these organizations that, that stop them from even trying. Yeah. You know, to do things differently. I don't know. Do you agree with that?

Tony Martignetti
Oh yeah. Well, I said earlier, self-fulfilling. You know, we we never have in the past gotten lapsed donors back in in decent numbers. So why why keep trying? But yeah, well, how about trying something different?

Chris Vaughan
Yeah, and I think it's the way that board and leadership measure things, right? So we're looking at new donors, whereas if the, the key metric was just the total size of the file, we would look at it very differently, right? So it's, it's not how many new donors— it's, you said it yourself earlier, how many of them are we keeping? Are we seeing year-over-year growth in the total file? And the total revenue is a very different way of looking at kind of cultivating your, your total donor base. Many organizations don't, you know, we've, we see this and we see this in membership too. You know, the acquisition rate is really strong. It's really great. And no one may ever look at the retention number. They may not be able to tell you what their retention number is because they assume all this acquisition activity means that everything is fine and everything is going okay. So I do think there's a kind of institutional blind spot around retention for a lot of these organizations, but I don't know why.

Tony Martignetti
Well, I think a big part of it is, as you said earlier, nobody, nobody's Nobody's measuring it. I mean, no, not you. We said nobody owns it, nobody's accountable to it. But, you know, so the things you don't measure are just gonna languish.

Chris Vaughan
That's right.

Tony Martignetti
Well, when you start measuring and you start benchmarking and you start setting goals, you can, you can move the needle. I mean, it's not guaranteed, but at least you're paying attention to the problem.

Chris Vaughan
Yeah, I think that's right. And I think there's a structural lack of urgency that we talked about before around, you know, it can wait, it can wait till the next campaign, right? I just, I think there's a lack of appreciation for how quickly human beings make decisions like this about what they want to be affiliated with when their expectations are not met. It's true across a lot of organizations. I think people feel like, well, we got you in the door, that was the hard part, right? And we'll let the rest take care of itself.

Tony Martignetti
Yeah, but it doesn't.

Chris Vaughan
And we know that.

Tony Martignetti
It's not taking care of itself. All right. You've got some ideas, practical, low-cost ways for small and midsize. I appreciated you shouting out our small and midsize nonprofits. Those are our listeners.

Chris Vaughan
Yeah.

Tony Martignetti
American Lung Association probably is not listening, although I think they could learn a thing or two from our guests. But we're—

Chris Vaughan
I'm sure.

Tony Martignetti
We're, we're produced for the small and midsize nonprofits. So you've got some like small things, low lift, but maybe, uh, outsized impact ideas?

Chris Vaughan
Yeah, I, I think, I, I really do think that nothing that we've talked about is beyond the reach of, of all but perhaps the very, very smallest, you know, organizations who, who have no staff whatsoever. The technology has really changed the game, uh, in terms of the ease of lift around these kinds of things. The, the first thing I would do would be to pull my lapsed donor file, uh, and, and really, really understand it. I mean, how many are out there and how long have they been out there and what have we done to try to get them back? Yeah. What would it mean to try to segment them? Have we, have we ever thought about that before? I mean, I would spend some serious time with that file and ask myself, um, why haven't we taken another swing at this and what would it mean if we did? I think that would be step one.

Tony Martignetti
Okay. Do you have a step 2?

Chris Vaughan
I think step 2 would be to start thinking about the right way to segment your members. And some small organizations may be single-cause organizations, and that's actually great, right? Because that solves that problem for you. But other organizations communicate about a lot of different things in a lot of different ways, and being able to consolidate that to manageable, high-impact segments is really important. I think I would start giving some First, be honest about that. You know, are we overcommunicating? Are we diluting our own message? You know, are we talking about what the donors care about, or are we talking about what we care about? Have that conversation with yourself. That's free, uh, for you to do as an organization. And then, uh, think about what you can do in terms of a highly effective welcome stream, even if you can't do multi-part email. And I think you probably can, right? Even if you can't do targeted segmentation, and I think you probably can, what can you do immediately for a first-time donor to bring them back into the welcome stream and get them to that second gift, right? Using whatever tools that you have. It's— I don't know that it has to be sophisticated because anything you do is probably better than what you've been doing, right, up until now, or your retention numbers would be better than they are.

Tony Martignetti
That survey that goes with the first message in the welcome stream or in the win-back for trying to recapture lapsed donors. I imagine that that's— well, I think you said 10 seconds, but it was like a 3-question, 3, 4-question survey.

Chris Vaughan
Maybe 5, sort of 5 very quick welcoming kinds of questions. Hey, we'd like to learn a little bit more about you. Right? You know, how did you hear about us? What moved you to give this time? Right? You know, what, what, why is it, you know, why is smoking cessation personally important to you? Those kinds of questions. You can take freeform answers too. Those are easier to process now than they used to be. It doesn't have to be checkboxes. That's actually the most important stuff. We learned that lesson too from some research that we did with World Wildlife Fund. Right. Who does something very similar to this, but their survey responses are open-ended. So I don't have to do checkboxes. And, you know, again, the technology is not that fancy now, but to figure out, you know, in Tony's own words, this is what he cares about. And then they feed your own words back to you. So they will literally communicate with you in your own words that they collected from that upfront survey, which I thought was brilliant.

Tony Martignetti
All right, that's a great use of technology. Capturing, capturing their words and inserting them into messages back.

Chris Vaughan
Yeah, and it really, really works. I mean, it's like hugely effective. And a couple of years ago, that would have been like Star Trek stuff, right? Like, you know, that's impossible beyond their own— it's not with the AI-powered tools. And a lot of them are built into these donor management systems now. That kind of stuff is becoming more and more automatic. So I encourage all of our clients, it's like, look at the technology you already have. I don't— you, you probably do not have to go out and spend thousands of dollars to buy some new tool. These capabilities are either built into what you're already paying for, or they will be next year. So have that conversation with your vendor. What capabilities are you not using that are right there at your fingertips?

Tony Martignetti
Okay, Chris Vaughan, you feel okay? Is there anything you want to leave our donors with that we haven't talked about that you want to?

Chris Vaughan
Encouragement, right? I would want to encourage.

Tony Martignetti
Did I just say leave our donors? I think I just said leave our donors with.

Chris Vaughan
You did.

Tony Martignetti
I'm so focused on donor retention.

Chris Vaughan
Yeah, you're focused on donors right now.

Tony Martignetti
Leave our listeners. Leave our listeners donor. Well, we're donor focused. No, we're listener focused. It's a podcast. It's not a it's not a nonprofit. So. Leave our listeners.

Chris Vaughan
I would, and it's gonna sound obvious, but take, take retention seriously, right? Elevate it to a strategic priority. It is far and away your fastest path to revenue growth is to bring that retention number up. That'd be the most— have this conversation. Your board should be talking about this. You should have this conversation. They should know these numbers, the benchmarks as well as your own, and understand The compounding arithmetic of repeat donors and bringing them up. And, and I think a lot of boards really, really don't. I mean, so, uh, the problem is solvable, and I feel like a lot of folks coming into this conversation feel like that's just the way it is, right? Donors just don't come back. I think that's not true. Yeah. I think donors that aren't, aren't managed well, aren't welcomed the right way, right, aren't asked to come back the right way, don't come back. But it— our experience shows, and, and, and the example that I've been talking about shows that it, it, it can be different. So part of it is encouragement, which is take this seriously, and part of encouraging it, it's solvable, right? This is not a problem that can't be solved. It's not a problem that you can't solve as a, a small organization, right? I mean, we're, you know, this is, this is our mission as a firm, is to help organizations grow, right, to grow membership and, and to grow revenue. And we've been, we've been at it for 25 years, and nothing makes us happier than to see these organizations succeed. I think the things that I've been talking about today, um, are not complicated. And maybe they sound complicated to a small staff organization, um, but in— I, having done it for all these years, it's, it's not. I think, you know, I think what's hard is to make the mental shift in the first place. That this is important and that, you know, we need to be more urgent about it. I think once you turn that corner and elevate this to the strategic priority, the how and the what becomes an awful lot easier. So I would leave that with your listeners as well as don't be intimidated and don't be afraid to take this on. I think this is what these things are all well within your reach.

Tony Martignetti
The company is Sequence Consulting at sequenceconsulting.com. Its co-founder and chief strategy officer is Chris Vaughan. Chris, thank you very much. Pleasure.

Chris Vaughan
Thank you, Tony. Great.

Tony Martignetti
Thanks for sharing all this.

Chris Vaughan
My pleasure.

Kate Martignetti
Next week, grants fundraising before you start writing. If you missed any part of this week's show,

Tony Martignetti
I beseech you, find it at tonymartinetti.com.

Kate Martignetti
Our creative producer is Claire Meyerhoff. I'm your associate producer, Kate Martignetti. The show's social media is by Susan Chavez. Marc Silverman is our web guy, and this music is by Scott Stein.

Tony Martignetti
Thank you for that affirmation, Scotty. Be with us next week for Nonprofit Radio, big nonprofit ideas for the other 95%. Go out and be great.