5 Things the Subscription Economy Teaches Us About Recurring Giving
By 2025, the subscription economy will grow to $1.5 trillion. From artisan coffees and cat toys to music services and video platforms, people have gotten used to the subscription model—paying a set amount each month for goods or services. Nonprofits have been able to join this consumer shift by rebranding recurring giving programs as subscription donations.
By using best practices from the most successful subscription services out there, your nonprofit can take its recurring giving program to the next level. Below, we highlight five of these lessons learned to help you increase your donor retention rates and benefit from consistent recurring donor revenue.
1. Treat Recurring Donors as Members
Amazon Prime and Disney+ both treat subscribers as members rather than simply customers with ongoing transactions. Both do so through strategies like special member days and branding.
For example, Amazon Prime is a subscription service that provides special services to members, such as free shipping and access to its streaming service. It hosts an annual Prime Day where only members benefit from exclusive deals on top brands.
Meanwhile, Disney+, a subscription streaming video service, connects its members to the full Disney brand, including in-person experiences at Disney Parks that can leave a lasting impression. Disney+ Day showcases upcoming content on the streaming platform while offering various perks for current and new subscribers. These include benefits like early entry to Disney’s theme parks, discounts on Disney cruises and resorts, Disney+-inspired treats, and photo opportunities at Disney’s Hollywood Studios.
Both examples foster brand loyalty from customers because members feel like they belong when engaging with the brand. As a member, they’re not just paying a monthly bill—they’re part of a community.
Nonprofits can learn from this and treat recurring donors as members, too, by fostering a brand connection through:
- Member-exclusive perks: For example, Savory Institute’s Regenerating Members recurring giving campaign offers three membership levels: champion, steward, and changemaker. Each receives corresponding exclusive perks, such as quarterly webinars, discounts on products and offerings, branded apparel, and signed books.
- Special names for the recurring giving community: For example, Canal Alliance calls its members Aliados, meaning allies in Spanish. Additionally, Many Hopes refers to its community of recurring givers as The Rising, a group of “change agents committed to raising children from injustice to influence.”
2. Offer Membership Tiers
Many subscription services will offer tiers based on factors like:
- Number of users
- Needed features
- College student or professional status
This ensures new subscribers aren’t discouraged from joining because they either aren’t getting enough value for the price or feel they’re paying too much for features they don’t use. Successful subscription models meet the customers where they are.
Nonprofits can mirror this approach by offering donation tiers that match donors’ different recurring giving capacities. For example, a college student may only be able to afford a $10 donation per month, whereas the CEO of a company may be able to afford $1,000 per month.
Additionally, each recurring giving tier can come with special perks to encourage donors to increase their contribution when they can.
For example, Broadway Cares uses membership tiers to encourage recurring donations that “provide essential support for those affected by COVID-19, HIV/AIDS, and other debilitating illnesses across the country.” Membership options include:
- NextGen Network: Donors who are young professionals and give an annual contribution of $250 or more receive exclusive invitations to events and other benefits.
- Angels Circle: Donors who give an annual contribution of $1,000 or more receive exclusive invitations to events, VIP status at some events, and other benefits.
- Visionary Circle: Donors who give an annual contribution of $10,000 or more receive exclusive invitations to events, VIP status at events, and the option to designate their gift to a specific grant category.
3. Create a Discount Option
Subscription services will often use discounts on the first year or month of service to encourage new members to join.
Nonprofits can also institute a discount by encouraging donors to request a company donation match from their employer. That added contribution may allow donors to gain the benefits of a higher membership level that they would otherwise be unable to afford. For example, if a donor gives $500 and can have their employer match that gift with another $500, they could join the Angels Circle at Broadway Cares.
Another way to create a discount is by offering multiple frequencies for donating. For example, a donor may choose to give $120 at the start of every year, or they could break that up to just $10 every month for a more affordable option long term. Many subscription services use this technique as well, often providing a discount for services paid in full upfront.
4. Ensure Seamless, Automated Payment
The subscription economy doesn’t rely on members returning each month to settle their bill. Instead, these companies let users set up their payment information once and then seamlessly automates the charge afterward at the agreed-upon frequency.
Many also use various payment options so customers can use their preferred method. For example, BarkBox, a monthly subscription service that provides dog products, offers the expected credit card payment options as well as Venmo and PayPal. Having these payment options may appeal to a wider range of customers.
Nonprofits can implement modern, automated payment processes for recurring donations, as well, through software like Classy. Classy Pay offers flexible, secure payment options, including:
- Credit cards
- ACH bank transfer
- Digital wallets, like Apple Pay, Google Pay, and Microsoft Pay
- PayPal donations and Venmo donations
By reducing any payment friction for recurring donors, you can reach broader and younger donor segments.
5. Take an Evergreen Approach
Disney+ reached over 137.7 million subscribers worldwide in April 2022 and has grown to account for 18% of the streaming video-on-demand market since its launch in 2019.
Forecasts predict Disney+’s continued success in the streaming services industry because it hosts a lot of evergreen content subscribers can rely on rather than constantly focusing on the need to develop new content to entice users. Evergreen content at Disney+ includes classic movies and shows that people are likely to watch again and again. So having that reliable library of content helps prevent subscriber churn.
Nonprofits can also take the evergreen approach to recurring donor retention through:
- Consistent messaging and nonprofit branding that members can rely on
- Accountability in meeting their mission, such as through publishing annual reports
- Timely thank you notes and donation receipts
- Quick, clear responses to donor inquiries to keep members informed
- Active, engaging social media accounts
In other words, while your nonprofit may launch new programs or try new marketing strategies, always keep enough consistency and connection to your original intent for recurring donors to trust in and continue with your ongoing relationship.
Grow Your Recurring Giving Program Through Lessons From the Subscription Economy
As the subscription economy continues to grow, nonprofits have a unique opportunity to learn from its approach to inform recurring gift programs. Through a membership strategy like the ones outlined above and effective, streamlined systems, your nonprofit can gain and retain supporters for donation subscriptions for years to come.
Learn More in Our Recurring Donor Sentiment Report
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