No Such Thing as a Free Donor

Puzzled about why your online donors aren’t renewing? Simple ... they’re different, those donors who give online. For a time, prevailing conventional wisdom was that a donor acquired online is most likely to renew online.

And the great hope was that online donors would be so much cheaper to re-solicit because we wouldn’t have to spend money on postage and printing and production … we could just e-mail them!

It wouldn’t be quite like raising money in a bank vault, but dreamy looks crossed fundraisers’ faces everywhere as they thought about how fantastic the cost-to-raise-a-dollar ratios would look for online donors. So much for conventional wisdom.

Today, we know a lot more. Online donors don’t respond uniformly to re-solicitation efforts any more than those acquired with direct mail.

A lot of them respond better to direct mail than e-mail campaigns, in fact, blowing a big hole in the theory that they would be cheaper to re-solicit than those direct mail donors we have to spend so much money on.

Fundraisers who raise the most from online donors are contacting them with every media in the arsenal … e-mail, phone and mail in strategic coordination. They know if they don’t, online-acquired donors won’t be with them for long.

No simple solution
Online donors are proving to us yet again that all donors are not created equal, and our success in retaining them and upgrading their level of giving depends on how fully we understand them in all their quirkiness.

Certainly, every organization must conduct its own testing to determine if the following intelligence about online donors holds true, but years of testing and tracking and detailed analysis tell us that, in general, online-acquired donors have a lower retention rate and a lower lifetime value than direct mail-acquired donors.

No medium — mail, telephone, e-mail or any combination thereof — works as well with online-acquired donors as it does with their direct mail counterparts. Which isn’t to say it’s not worth bothering; it just means we need to consider them differently and have an aggressive retention strategy to keep as many of them as we can.

Testing with some nonprofits shows a difference in their responsiveness to special appeals versus renewal notices, interestingly. For one group, online donors’ gifts to special appeals accounted for only half the percentage of additional gifts from direct mail-acquired donors, but response to renewals was roughly the same.

When analyzing the cost to acquire them, a significant portion of online donors are not “free” after all.

Regular match-back analysis indicates that anywhere from 20 percent to 50 percent of online donors received a direct mail acquisition piece in the weeks preceding their contribution. Unlike donors who find their way to your Web site on their own, a good number of online donors choose to give online simply because it’s the financial transaction method they prefer.

Truly “free” online donors who can’t be matched back to any campaign should be flagged and segmented separately so you can test, test, test to see what media, messaging and offers generate additional giving.

Like they say in fine print on diet commercials, “results are not typical.”

Not all bad news
However, donors acquired online are more valuable than direct mail-acquired donors in the first 18 to 24 months. They aren’t retained as well as direct mail donors, but one thing online-acquired donors are good for is bigger gifts and more of them.

They make larger first contributions and larger subsequent donations, and they often make more gifts per donor annually than direct mail-acquired donors — particularly in the first year.

And finally, the kicker: Online donors are twice as likely to become monthly givers!

Whatever you do, hit up your brand-new online donors with a monthly giving offer. They’re ripe for it. If you have their phone number, use it. Otherwise, send them a monthly giving invitation in the mail. But get that offer in front of them pronto.

When they opt to make their monthly pledges by electronic funds transfer or credit card, offer them the opportunity to receive giving statements by e-mail. And when you send those e-mails, be sure to include a donation link so they can easily make an extra contribution when your monthly message moves them to do so.

For the majority of online donors who will decline a monthly giving offer, get them into the mail stream and include them in your telemarketing campaigns … utilize every media you use with direct mail-acquired donors.

All in all, a much larger proportion of online donors migrate to giving by mail than direct mail donors migrate to the Web. So to retain your online donors, you’ll want to spend a good part of your budget on direct mail.

Lastly, if you don’t already have one, institute a retention strategy to cultivate and bond online donors to your organization.

If you want to keep them, hit ‘em with everything you’ve got!

Kimberly Seville is the creative director at Craver, Mathews, Smith and Co., where she manages the company’s Dedicated Donor™ Task Force. She can be reached at kimberly@cms1.com.