Recruiting donors to become on-going contributors via monthly pledge letter or automatic credit card/ACH has become an increasingly important strategy for nonprofits as they can provide a reliable steady stream of income while bonding donors more closely to their missions. The objective of sustainer recruitment through outbound telefundraising is to increase their giving by engaging them to commit to a regular (monthly) contribution.
Telefundraising can actually be an effective way to recruit large numbers of sustainers from within a Housefile. There are many factors that impact whether or not a monthly sustainer campaign is successful (offer, appeal, timing, ask arrays, etc.). Two of the most important considerations are Audience selection and Evaluating performance and ROI on an annualized basis.
Active, Muti-Gift Donors: The most responsive audience to a sustainer request is active donors who have made frequent donations over the past 12-24 months. Typically, the monthly conversion rate is directly proportional to the number of gifts the donor has made to the organization in recent years.
With these frequent donors, the objective should be to upgrade their annual giving by converting them to sustainers. Therefore, when selecting the data for a call center, it’s important to include annualized total giving and number of gifts. The ask amounts often times will be based on annualized giving by donors with the first request attempting to upgrade the donor. The second request is usually for an amount that is comparable to the donor’s annualized giving (with the assumption that the donor will also respond to additional appeals throughout the year). Additionally, if monthly giving is not an option for a donor, a soft third request for a 1X donation can be incorporated (conversion rates range between 5-15% on average). These 1X gifts also help shorten a nonprofits “breakeven period” on the teleservices campaign as they offset some of the immediate program costs.
Monthly response rates can vary significantly between nonprofits due to a number of variables, however sustainer recruitment campaigns that focus on current, frequent donors typically produce a 7-15% response rate with average gifts ranging between $10-$20. As previously mentioned, it’s recommend to ask for a 1X gift as a fallback if the donor does not commit to a monthly gift.
New, Single Gift Donors: Many nonprofits have pursued a strategy of making a sustainer request of new donors as the first phone contact after the donor is acquired. This can be effective but there is a tradeoff that must be considered when electing to pursue a sustainer recruitment strategy versus asking them for a second 1X gift. Overall response rates tend to be about a third lower when asking for a sustaining gift from new donors versus a 1X gift. Therefore, it’s important to cautiously test a separate sustainer campaign in parallel with a straight 1X-ask campaign all while tracking the long term value of your donors. Once the data is compiled for each audience, a strategic comparison can be made. This will help determine whether sustained giving campaigns are viable options for new donors.
Lapsed & Non Donors: Sustainer programs are generally cost prohibitive for lapsed donor and non-donor audiences as they are usually contacted on a 1X gift ask program first. Once they make a gift to that program and have been converted back to “current donor status,” they can usually be integrated into a future sustained giving program.
ANNUALIZED PERFORMANCE & BREAKEVEN THRESHOLD
Long-Term Value: Sustainer programs to active, multi donors will sometimes cover their telefundraising costs in the first couple of months from the fulfilled revenue received. Often though, breakeven is longer and achieved in subsequent months. A long term value analysis will help to determine the level of investment that should be made to recruit sustainers. Before beginning any teleservices sustainer recruitment campaign, a nonprofit should establish an acceptable “breakeven period” goal.
While some sustainer campaigns breakeven, and even net money after the first month or two, most do not realize net until months after the initial phone call. This is largely due to the fact that average gifts are generally lower ($10-$20) than those seen on 1X gift ask campaigns ($20-$30+). Additionally, due to the added length of the phone call, sustained giving campaigns can have a slightly higher telefundraising cost than traditional 1X gift ask campaigns.
When it comes to monthly giving, don’t think of net in the short-term, but rather look at net revenue as a long-term strategy. This can sometimes be difficult for senior management to accept, especially when nonprofits have immediate funding needs. An experienced call center marketing partner will be able to analyze a data file, make segmentation recommendations, and proforma the estimated performance over the course of a 12-month period, thus allowing a nonprofit to budget appropriately.
In summary, breakeven thresholds vary between nonprofits and are largely influenced by a number of factors such as audience selection, ask arrays, timing, and appeal. On average, breakeven periods range from 1-12 months.
ADDITIONAL PERFORMANCE ENHANCERS
Strategic Flagging: Sustainer recruitment is most effective when it is a part of a comprehensive, multi-step process. Two important variables in determining response to a sustainer request is having a previous history of: phone responsiveness and/or gifts by credit card. These donors are typically up to 50%+ more responsive to sustainer requests.
For that reason, it’s recommend integrating the phone into the donor development mix in other areas first to maximize the cost effectiveness of the sustainer recruitment programs. For instance, the phone is a very effective tool for reactivating lapsed donors. Many call centers (like Donor care Center, Inc.) will typically guarantee breakeven on lapsed donor programs so, the nonprofit regains significant numbers of lapsed donors at very minimal financial risk. The reactivated donors are then very good candidates for future sustainer requests.
The same applies to new donors. A strong argument can be made to implement a telephone conversion strategy as the first contact for newly acquired donors where a 1X gift is requested. That will maximize the conversion rate. Then, donors who respond can be asked for a sustainer gift 4-6 months later…and because they have responded to a phone call previously, they will be more responsive to a sustainer request over the phone.
Driving Credit Card Response During The Call: Sustainers who make their contribution on credit cards are much more valuable than donors who pledge to send a monthly check. Therefore, every attempt should be made to obtain credit cards. As previously mentioned, flagging previous credit card donors can impact performance as telephone agents can reference the donors past credit card donation. Credit card response rates by previous credit card donors are typically several times higher than response rates of donors who have not given on a credit card in the past.
It can also be beneficial to offer premiums to donors in exchange for paying their sustainer gifts by credit card. Again, the value of a credit card sustainer is many times higher than that of a pledger. Therefore, a premium with a relatively high perceived value can be tested.
COMPREHENSIVE COMMUNICATION STRATEGY
Integration With Other Channels & Marketing Materials: The nonprofits which enjoy the most success with telemarketing sustainer recruitment programs are those which already have an existing sustainer program in place and “brand and promote” it to donors via with frequent mailings, frequent mentions in newsletters, online communications, and in other media.
The sustainer recruitment phone call should follow a sustainer recruitment mailing whenever possible. A lot more information can be provided in a mailing than in a two minute phone call. By dropping the mailing first, donors will be aware of the benefits of becoming a sustainer (to them and to the nonprofit). The phone call will then serve to obtain commitments from donors who are more aware of these benefits because they reviewed the mailing.
This article was originally published on LinkedIn.
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