Development teams looking to maximize their donations have an uphill battle to fight: Balancing connecting with and securing new donors with maintaining donor retention represents an operational and organizational challenge for fund managers.
Nonprofits already operating on limited budgets can find their resources taxed almost to breaking simply by trying to recruit a new donor — an activity typically two to three times more expensive than that donor’s first contribution.
With that in mind, it becomes operationally vital to be able to engage your existing donor base in ways that leverage their maximum willing donation, which may in fact be more than their current level. Key to this is the use of personalized ask amounts, calibrated to commit your limited resources to reaching out to high-value donors, rather than those unlikely to increase or repeat their contribution.
Lessons from the ‘For-Profit’ Sector
As we’ve written about in the past, increasingly non-profits have been looking to the ‘for-profit’ sector for guidance on how to limit attrition, improve retention and boost in donations. One of the vital lessons to be gleaned from a for-profit model is identifying the key drivers of loyalty. As described by Adrian Sargeant in Nonprofit Quarterly, these drivers break down to satisfaction, identification, trust and commitment.
“I believe this to be relevant,” writes Sargeant, “as some donors will consciously evaluate the service provided by a nonprofit and compare it to what could be achieved ‘in return’ for their donation elsewhere.”
The transactional nature of this shows the importance of the relationship between a nonprofit and its existing donors. These are your existing “customers,” people already converted to your brand. It stands to reason that it would be less costly to maximize an existing customer value than it would be to forge an entirely new relationship.
The Closest Thing to Reading Minds
This is where the concept of personalized ask amounts comes in: By simply modifying the amount you ask your customers for, you create the impression of personalized “service,” driving up loyalty and boosting donations — by as much as 76 percent, as in the case of PBS station KLRU when it implemented ExactAsk.
The key to the success of personalized ask amounts isn’t about asking your donors to give MORE, it’s about asking them to give the RIGHT amount. Simply settling on a random number, or even attempting to formulate an unchanging custom ask amount formula, isn’t likely to be successful. Rather, by using the donor data you already have at your disposal in an algorithmic predictive analytics platform like ExactAsk, you can come up with a customized donation number that may closely match the number the donor already has in their head.
A cost-effective, precise ask amount tool can be something like a magic trick for donors — the closest thing to reading their minds. And this has measurable results: CTAs that contain an exact ask amount are nearly 50 percent more successful than open-ended ones.
This in turn translates to a feeling of high-quality “service,” which will drive continued loyalty. By simply tapping into the amount they are already ready to spend, you can leverage greater returns by reducing the risk of asking for too much or too little.
To learn more about how using personalized ask amounts can enable you to boost donations, schedule a briefing today.