Retention is key
August 20, 2012
Working as I currently do at a non-profit organisation as a development and marketing manager (and being on the boards of community organisations), I am struck by the strong parallels between the challenges faced by the NGO sector and by unions.
One of my responsibilities is fundraising, achieved principally through philanthropic grants and individual donors.
The importance of individual donors is significant. Apart from the obvious example of the tens of millions of dollars raised by Barack Obama through small, individual donations, donors and individual financial supporters are the life-blood of many non-profit organisations.
Increasing the number of new supporters (whether donors or members) is central to ensuring the ongoing financial health of an organisation. But the story doesn’t stop at just getting new donors. Keeping them is just as important.
In my experience, even a small decrease in member/donor attrition can result in large improvements to member stability, and as a result, the financial sustainability of the organisation. A 10 percent improvement in retention can have up to a 200% increase in the member’s life-time financial contribution to the organisation. This can be due to increased giving, volunteering and activism, word-of-mouth recommendations and other benefits.
Most non-profit organisations (whether charities or unions) are primarily focused on member/donor growth. This is like filling up an increasingly bucket. If we can increase the rate of new members/donors, we can make up for the leakage (member exits, donor drop-off).
A focus only on growth ignores the substantial opportunities that can come through retention: improving the supporter’s relationship with the organisation over time.
Some unions (and charities) face massive retention issues. This can be for a range of reasons, such as the precarious nature of the industry or because of the (in)action of the organisation.
I’ve developed specific retention programs, and have seen the impact that such programs can have on boosting membership and donor numbers.
By changing the focus away from the raw metrics of growth (number of conversations, direct mail pieces sent, phone-calls made, website hits) to increasing the quality of the member’s experience, churn can be reduced dramatically. Of course, growth must still occur through recruiting new members and donors.
But focusing on loyalty metrics rather than just growth metrics can make a difference. (See this blog post for more on important membership metrics.)
A crucial element to action this advice is to audit your member communications. Are they about the members and donors, or are they about your ogranisation? By being member-centric (or donor-centric), you can recalibrate many of the activities and communications you send to be more relevant and reduce churn.
For example, with a union retention program, I completely redeveloped the new-member kit and introduced a requirement that every new member be personally handed the kit (by an organiser or delegate, rather than have it sent in the mail. I also introduced regular contact with new members are key times: 1, 3, 6 and 12 months. These were identified as crucial times in member satisfaction and drop-off.
Even small improvements to supporter attrition can have a huge impact.