Reactivating Lapsed Donors


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Reactivating Lapsed Donors March 7, 2017

Randy Kinder • Senior Director of Annual Giving • University of Alabama at Birmingham • 15 years in annual giving, including Colorado State University, Colorado College, and Ruffalo Noel Levitz • CSU grad…Go Rams! • President of the Birmingham Bass Fishing Club Page 1

University of Alabama at Birmingham • Founded in 1969 • Birmingham, AL • ~130,000 alumni • 12 Academic units, SOM (26 Dept’s) • 8.7% alumni participation • Annual Fund: ~$715,000 from 5,025 donors • 5 Annual Giving staff – centralized • Mascot: Blazers…those are dragons • Currently in the $1B Campaign for UAB Page 2

Agenda • Understanding why donors lapse • Analyzing key segments and trends • Developing compelling messages • Bringing them back on board

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UNDERSTANDING WHY DONORS LAPSE Page 4

A donor can fall into 1 of 4 categories • Current donor • Prior year donor (LYBUNTS) • Lapsed donor (SYBUNTS) • Non-donor

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Calculating reactivation • Retention rate: the percentage of prior year donors who give within a given year – Example: if 1,000 donors gave last year and 600 of those donors gave again this year, then the retention rate is 60%

• Reactivation rate: the percentage of lapsed donors who give with a given year – Example: if 5,000 donors gave in one of the past 5 years and 750 of them gave last year, then the reactivation rate is 15% Page 6

Reasons donors lapse (you can’t control) • They moved and you didn’t know it • Gave for special occasion (e.g., memorial gift, reunion, crowdfunding, giving day, challenge, excited about athletics) • Relationship with the institution is finite (e.g. parents, friends, fans) • Financial hardship • Developed a stronger affinity for something else • Bad PR for your institution Page 7

Reasons donors lapse (you can control) • They didn’t get the attention they expected (e.g., no gift acknowledgment, recognition, no one returned their call or email) • They didn’t feel like their gift made a difference • You didn’t ask them (limited resources, excluded from appeals for major gift cultivation) • They didn’t know they lapsed (fiscal years are an institutional construct)

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Oklahoma Lapsed Donor Survey • Goal: To identify why donors lapse, directly from the source • Mailed to 20,000 lapsed donors • Those who completed survey received premium • Address update • Giving opportunity

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Lapsed Donor Survey Questions

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Lapsed Donor Mail Package

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Lapsed Donor Survey Results • Sent to 20,000 lapsed donors • 200 survey responses • 300 demographic updates • 150 address label requests • 400 gifts for $35,000

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ANALYZING KEY SEGMENTS & TRENDS Page 13

POLL: Do you know what percentage of your donors last year were reactivated lapsed donors?

• Yes • No

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Lifetime donor participation rates

Source – Target Analytics Page 15

Median reactivation: 1-5 years lapsed

Source – Target Analytics Page 16

Median revenue per reactivated donor

Source – Target Analytics Page 17

Know how your own donors break down

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Understand changes from year to year

Reactivated # -/+ % change Avg. $ Total $

FY13 3733 $88 $328,504

FY14 3995 262 7% $98 $391,510

FY15 4004 9 0% $95 $380,380

FY16 4679 675 17% $102 $477,258

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Retention rates increase…

• The more recently a donor gave • The more frequently a donor gives • The more money a donor gave (last time)

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Retention rates increase with gift size

Source – Target Analytics Page 21

Reactivation rates decrease…

• As the frequency of donor’s past giving decreases • When the amount of a donor’s last gift decreases • Every year that goes by that a donor doesn’t renew

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Avoid the cliff!

After a donor has lapsed for 5 or more years, the likelihood that they will give this year is less than the likelihood that a non-donor will give for the first time! Page 23

DEVELOPING COMPELLING MESSAGES Page 24

Guidelines for reactivation messages • Treat lapsed donors as their own segment • Create special messages for them; especially after a year of lapsing • Find out what they gave to before they lapsed and ask them to support that • Appeal to their emotions and ego (e.g., We Miss You!) • Call them to action (e.g., Come back!) • Focus on the impact of their past gifts more than the amount of their past gifts Page 25

Colorado College Lapsed Mailing

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Direct mail reactivation tips • Make donor-driven decisions, rather than institutional • Show donors their gift history • Show areas of previous support • Increase frequency to high-yield donors • Reduce frequency to low-yield donors • Reinforce impact of their previous gifts • Encourage recurring and multi-year gifts Page 27

Recurring Gifts / Auto-renewal

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Show donors their giving history

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Email reactivation tip • Make it personal • Take advantage of pet projects and special campaigns • Follow up with those who didn’t open your emails • Preface/Echo direct mail messaging in bite size pieces

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Preface/Echoing Direct Mail

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Phonathon scripting tips • Thank you, thank you, and thank you • Connect the thank you to the student caller • Treat all prospects as if they are your most important donor • Include a recurring ask into your standard ask cycle • Use “commitment” and “loyalty” throughout • Test rapport Page 32

BRINGING THEM BACK ON BOARD Page 33

POLL: Where does your program focus more of its time, energy and resources?

• Lapsed Donor Reactivation • New Donor Acquisition • Not sure

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General guidelines for reactivation • Don’t ignore them; in fact, focus on them – be aggressive! • Avoid the cliff: – Expand your definition of lapsed donors to 5 years if it’s not already – Don’t expend too many resources on them after they’ve lapsed more than 5 years • Use low cost channels in order to increase the frequency of your appeals (e.g., email, postcards) • Assign good callers to reactivated segments • Target special interest & affinity rather than general funds Page 35

Focus on three key sub-segments 1. Gave consistently before lapsing 2. Donated at leadership level before lapsing 3. Made multiple gifts in a single year before lapsing

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Make sure you have good data • Compare “lost” rates for lapsed segments to peers • Consider phone/email append if budget allows • Collect cell phone numbers (they’re good for life!) • Use phonathon calls to update email, mailing, and employment info • Offer incentives for lapsed donors to update info (e.g., contest to win a prize)

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It’s that time of year

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Encourage monthly gifts/multi-year pledges

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Targeted web marketing • IP Targeted (i.e. Google Ads) • University of Northern Iowa test: – Goal: Identify if lapsed donors who receive target web ads are more likely to respond to a mail piece – 20,000 lapsed donors mailed – Test segment received nearly 800,000 impressions over two weeks – Tactic: Results (who received the web ad) • Target: 1.2% return and $94 avg. gift • Control: 0.79% return and $79 avg. gift Page 40

Implement “second asks” • Go back to donors who have already given in the current fiscal year and ask them for another gift • Those who give more than one gift in a year are more likely to give again even if they lapse for a few years • Rutgers University runs two “second ask campaigns” a year – One in January and one in May – Secure second gifts from over 3,500 donors – Found that 13% more likely to renew if they make a second gift, and 23% more likely to renew if they make 3 or more gifts in a year Page 41

Offer premiums as incentives

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Let them “buy back” missed years

• Recognizes those who’ve made a gift at least two consecutive years • Qualifying Levels – Charter: 2-4 years of consecutive giving – Milestone: 5-19 years of consecutive giving – Lifetime: 20+ years of consecutive giving • Members can “buy back” missing years for $25 per year Page 43

Refresh your “do not call” list • Send a letter to everyone who is coded “do not call” • Request that they ”opt-in” if they’d like to remain on the “do not call” list • University of Kentucky did a “refresh”: – Sent a postcard to just under 5,500 prospects – Fewer than 175 asked to continue being excluded – The others returned to the phonathon calling pool – Focused on those who were lapsed donors

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Day of Giving • CSU 2016 Giving Day • Reactivated 336 donors • To put that into perspective… – It would take 33,600 pieces of mail to have same impact (assuming 1% return) Page 45

Key Takeaways • Treat lapsed donors as their own segment with messages that let them know you want them back • Create messages that speak specifically to them as a segment AND as individuals • Make sure you have good data on them (e.g. contact info, interests/past giving, attitudinal surveys) • Be creative/think outside the box to get their attention and win them back • Be aggressive; use lower cost channels to be able to increase the number of appeals you send to them • Don’t let them go over “the cliff” Page 46

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