Acquisition vs retention

Donor acquisition means: finding new $ and in-kind donors.  It can take 5+ contacts before a donor acts, each contact needs to be from a different source to avoid tuning out.

Donor retention means:  keeping your existing $ and in-kind donors, up-selling existing donors and converting in-kind donors into money donors

It is important to separate acquisition and retention activities because the:images-43

  • messages are different.  The donor’s knowledge of you is different.
  • marketing activities are different.  Retention activities focus on improving your touch points with each audience.  Acquisition activities focus on staff outreach.
  • costs are different.  Retention activities will be cheaper.

Marketing activities need to be compared with other activities within the same group, not with all marketing activities.  For example, it is best to compare the cost effectiveness of a direct mail campaign to acquire new donors with other acquisition activities.  Do not compare it to a direct mail campaign to existing donors.   See how to compare efforts in the Donor Churn report.

Why donors stop their support:

According to recent research:

54% donors could no longer afford
48% poor communication (no info on how donation was used, no memory of donation, never got thanked, poor service)
41% thought charity did not need them, other charities more deserving
16% death
(total 159% due to multiple selections)

Is Media Relations an acquisition or retention activity?

It’s both.  A favourable article in a newspaper will get your non profit on the radar screen of new donors.  And it will remind existing donors of the work you do.  For many non profits, it is hard to track the success of a publicity campaign.  You should still focus efforts on the media,  but tracking results may be one of those unanswered questions.

How this concept will affect your non profit:

1.  Marketing costs need to be reported separately.  Reassure your accounting staff that these are internal reports for making management decisions, so they don’t need to change your existing accounting system.

2.  Marketing staff time needs to be reported separately.  Reassure your marketing staff that you do not expect them to log their effort on time sheets. Rather ask them to pause for 10 minutes at year end and make an estimate.

3.  If you have a large marketing department, you may want to consider reorganizing the structure so you can track the impact of the activities for each employee.

4.  When calculating the cost/benefit of a new idea, the formula may differ.