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Can organizations successfully generate and upgrade
monthly donors? Two organizations prove that they can!
(DMAW Marketing Advents, May 2003)
By Erica Waasdorp
At the recent DMA Nonprofit Conference in Washington,
there were many sessions to choose from. One was on
monthly giving, in which two nonprofits were happy
to share their success stories AND results. We fundraisers
are always extremely happy when they do because it
gives us an indication of a winning or losing strategy,
especially with monthly giving where the biggest challenge
lies in selling the concept to the donors.
One of the largest US animal welfare organizations
introduced a dog and cat sponsorship program a few
years ago. Their message is asking the sponsor to adopt
a special needs pet, developing a bond and providing
long-term care. Multiple donors can sponsor the same
dog or cat.
The heavy initial investment (on average twice that
of single donor acquisition) in the sponsorship program
enabled the organization to grow the net revenue to
almost $2 million, an increase of 92% in one year.
Once the sponsor is on board, drop off is low and additional
revenue starts building without much extra expense.
Through direct mail, direct response TV and web, the
program grew to over 40,000 sponsors, giving via bill
me (check) option, credit card and Electronic Funds
Transfer (bank account). The typical offer is $10 a
month to save an animal. The sponsor receives a pin,
a certificate with a photo of the sponsored dog and
monthly updates.
Overall retention rates (which differ per medium used
to acquire): EFT: 90%, Credit Cards, 85%, Bill-me option:
60%. To offset the higher costs for this option, conversion
is key.
One of the largest child-assistance organizations
in the country with a base of some 85,000 active sponsors
went discussed how best to deal with existing sponsors,
focusing on:
- increasing retention rate of existing sponsors
- growing revenue from existing sponsors/upgrading
monthly amount to two new levels.
To increase retention rate it's important to address
the reason for termination and solve the problem through
different strategies, from migrating check payers to
EFT, to redesigning statements to make them easier
to understand. One of the major factors they found
is the communication between sponsor, child and field
office. If the sponsor writes to the child, the retention
rate is going to remain high.
The upgrade strategy was very interesting, trying
to convert current $24 Sponsors to $28 or a special
level of $34. New sponsors were brought in for $28,
others were gradually converted via direct mail and
telemarketing. Telemarketing results: no terminations,
40% upgraded to the $28 a month, 30% upgraded to the
higher level, 30% wanted to stay at the same level.
Direct mail results seem very promising, but are still
coming in. The special level seemed to appeal to many
existing sponsors, generating an upgrade to $34 a month.
This session proved to me that it pays to stay focused
on existing donors and to ask for more without sacrificing
retention and to never, ever stop improving, evaluating
and creating new ways to meet challenges.
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