How to Take Your Recurring Donation Strategy to the Next Level

John Licata is the Director of Client Insights and Satisfaction at Idealist Consulting and has over 12 years of experience working with Salesforce.com.

As Team Rubicon touched upon in their recent blog post, recurring revenue programs have proven to have an enormous impact, and they are critical to your fundraising strategy. Salesforce has been around for 15 years now and a lot has changed in that timeframe. Donor’s behaviors and expectations are not what they were 15 years ago, and they want a different type of relationship than in the past. They want an ongoing relationship as a sustainer – they want to be engaged.

Recent research from Classy says first-time donors have a 30-45% retention rate, as opposed to 70% retention with recurring donors. In other words, the same donation amount the first year (5,000 people who donate once at $240 or 12 times at $20) will, over time, result in either $2MM or almost $5MM after ten years. You can’t afford to not consider recurring donations.

You need a well-thought-out marketing and communications strategy to retain those awesome monthly donors. Here are a few of the biggest changes we’ve noticed and some actionable strategies your nonprofit can adopt to manage a recurring donor program by applying great new tactics using a CRM like Salesforce.

Change #1: Purchasing behavior

Old: Not so long ago, people saved for Christmas and major purchases. Fundraising strategies capitalized on this by pushing everyone to donate through an annual year-end campaign.

New: In the past five years or so, consumers have moved almost completely toward the subscription model. People now expect that purchases like mobile phone calling plans, Netflix, and business applications like Salesforce.com will be channeled through smaller budgeted payments on a recurring basis.

What to do: Match your fundraising strategy with your donor’s new behavior by creating sustainers or subscribers. How to do this? Treat your audience like they are part of something: your fundraising call-to-action should fit in with their lives so they feel like they are participating in something. Through CRM integration, you can easily schedule regular reminders.

You can also target messaging specifically to different segments of your donor base. For example, if someone originally donated through Facebook, they may respond better to social media campaigns than email. Like Netflix, once your donor base gets used to smaller recurring donations, it will become an unconscious part of their budget.

Change #2: Donor data

Old: Many nonprofits still operate on a “back office” model, with manual data entry and monthly or quarterly reports prepared after the fact to meet board demands.

New: CRMs today operate on a “front office” model where you live in the system. Your online donations, constituent interactions, phone calls, emails, and meetings are all integrated into the system in real or near-real time.

What to do: Invest in integrating your online fundraising, email, and social media into your CRM. This will transform donor data into a living and breathing system. You learn something about your donors’ preferences each time they interact with you, such as what time of day/week/year they donate and what platform they prefer to donate through. You have always had powerful personal relationships with your top donors, and this relationship view has to be reflected in your CRM as well.

Every time you interact with your donor, you should make sure it’s reflected in your CRM, and you can build these identities quickly through demographic surveys if you’re starting from scratch. Companies like Classy have thought long and hard about the best workflow for this process, so if you sign on with them, you will be in good hands. Many nonprofits have made the transition from spreadsheets to Salesforce, and any consulting firm worth their salt can help you through this process.

Change #3: Donor reaction time

Old: Segmenting your donor database to identify a hot-button topic and targeting the appeal letters accordingly used to be a good guess at best.

New: You can now leverage CRM-integrated systems to segment prospects in real time for more agile fundraising appeals.

What to do: Consider how segmenting your donors can allow for just-in-time fundraising appeals. Through your CRM, you can keep reports in real time about every aspect of each donor’s history, from amount to geographic area to the type of appeal they respond best to. You can then use mass email marketing to deliver custom messages to different segments. A/B testing is great for this sort of appeal—try using two different messages on the same segment and see what type of messaging works best.

There are many ways your CRM can help you maximize the impact of recurring donations. Check out this presentation about recurring donation programs, made in conjunction with Team Rubicon and Classy, for more inspiration.