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Elizabeth Chung
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5 Clever Approaches to Increasing Donor Lifetime Value Year-Over-Year

The lifetime value of your average donor is a major sign of your organization’s health. Not only does it reflect the effectiveness of your retention efforts, but it showcases your ability to increasingly deepen donors’ commitment to your nonprofit. Naturally, improving donor lifetime value is something all organizations aim to do, year over year.

Like most things in life, there’s no easy formula for this. There’s no quick fix for getting donors to stick around and donate more to your organization. When all is said and done, boosting retention rates and gift amounts is all about building relationships. It’s about engaging them in personalized and meaningful ways, and thereby strengthening loyalty and trust.

With that said, there are steps you can take to improve your donor stewardship strategy and gradually grow supporters’ involvement. Here’s how to utilize 2015 to increase your donors’ lifetime value over the year.

1. Get Your Donor Data in Order

This next year, your first step is committing to prioritize organizing donor information.

If you’re not doing so already, your organization should be recording every touch point with donors and prospective donors (leads). Tracking supporters’ interactions with your organization is the only way you’ll be able to continually build these relationships and engage supporters in meaningful ways. You’ll be able to eliminate any guesswork around your fundraising and communications strategies and make data-driven decisions to build your donor relationships.

To start, a constituent relationship management (CRM) system, like Salesforce, can help track your data, observe trends, and identify opportunities for larger contributions down the road.

For more on metrics and donor data, read this post: 5 Metrics Every Development Director Should Know

2. Build Rapport with First-Time Givers

According to studies conducted by the Association of Fundraising Professionals and others, 60-70% of all new donors fail to give again the following year. Additionally, research has found that over half of donors leave an organization due to a lack of effective communication from the nonprofit.

Stats like these emphasize how critical it is to create an engagement plan specifically for first-time donors. You must build initial trust and rapport that will deepen their connection to your organization, and turn a one-time donation into a long-lasting relationship.

Create a 2 to 3 part email campaign customized to welcome first-time donors. Start by thanking them and sharing the impact of their gifts, and offer valuable resources to help them learn more about your cause and programs (eg. blog posts, impact reports, infographics, photos and videos, etc.). Link your social network profiles so they can follow you. In the final email of the series, ask them to opt into your monthly newsletter. Not only will this initial outreach add new donors to your regular communication workflows, but it will make them feel like valued members of your community, right off the bat.

3. Encourage Regular Donors to Become Recurring Donors

An excellent way to increase the lifetime value of your supporters is to turn them into recurring donors. For one, monthly donors have around a 60% retention rate, a much higher average than one-time donors. Monthly donations also allow you increase the amount a supporter gives on average each year. It’s a win-win situation.

To do this, start by showing supporters the impact of their gifts, and how those gifts have been critical to your organization’s mission.

Then, try using social media and other marketing efforts to inform and excite supporters about your recurring giving program. For example, you might start publicizing your upcoming recurring donations campaign, its benefits and its impact on your organization before sending out the email that actually asks people to join the program.

This will help roll the topic out onto supporters’ radars without fatiguing them. As the ones who are making change happen, emphasize how monthly gifts can increase the impact donors can make exponentially. Then, in February or March, target your regular donors – those who usually give multiple times a year – and ask them to join your recurring giving program.

To read about how to run a stellar recurring revenue campaign, read this post on how Watsi raised $20,000 in recurring revenue…in just two days.

Two Tips:

• Even within this donor group, keep in mind not everyone needs to be asked to give the same monthly amount. Check individual giving history, age, region, marital status, and any other demographics that will help you segment regular donors on a finer level, and tailor recurring donation asks to fit the attributes of each group.

• To create some extra value for donors, consider presenting a monthly gift as a way to gain entry to a special, “honorary group” for your most dedicated supporters. Frame your ask an invitation to join an elite tier of supporters that plays an important role in your organization’s development.

4. Create Custom Donation Forms with Specific Giving Levels

Custom donation forms can be a powerful asset to your online fundraising efforts. When your form matches the branding and messaging of particular campaign appeals, it creates a seamless donation experience that can result in higher conversion rates. To make it even better, custom forms also provide a unique opportunity for you to upgrade donors’ gift amounts. How? By allowing you to tinker with your giving levels.

Let’s say you’re sending out an email appeal series for your next fundraising campaign. If you do some segmentation beforehand, you can spin up different donation forms with default giving levels adjusted to each group’s past giving history. Whether their average donation amount is modest or large, donors will see suggested gift amounts tailored just for them. This gives you the chance to increase certain group’s gift amounts, without unintentionally downgrading others.

5. Respond to Donors’ Interests

As we’ve mentioned, increasing donors’ lifetime value is all about continually engaging them in a meaningful way. This means you have to understand their interests and motivations and respond to them in a targeted manner.

One option, for instance, is to learn what programs your donors are most passionate about. Track what programs and campaigns your supporters are giving to, and tailor your follow-up communications to reflect those interests. For example, if a supporter always donates to your rainforest preservation efforts in Asia, your thank-you message can include a link to a blog post or impact report that touches specifically on your organization’s activity in that region.

Responding to a first-time donor, however, can be a bit harder. You don’t have a lot of prior context that can help shape your follow-up message. Not to worry; you can include custom questions on your donation form that can help collect this information.

Conclusion

At the end of the day, there is no end all be all secret to growing your donors’ lifetime value. It all rests on your organization’s ability to build relationships. It requires understanding your supporters’ interests and connections to your nonprofit and responding to them in targeted and personalized ways. As you deepen these relationships, use these tips to help you approach the many opportunities you’ll have to upgrade donors.


Success by Example: 10 Digestible Case Studies

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