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Laura Connors, National Parks Conservation AssociationSharon Dreyfuss, World Wildlife Fund
Kerri Kerr, Avalon Consulting
Where's the Acquisition in the Retention Equation?
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Here with you today…Laura Connors – Acting Vice President, Membership, National Parks Conservation Association
• NPCA’s mission is to protect our national parks for future generations.• NPCA has more than 1 million members and supporters.
Sharon Dreyfuss – Manager, Direct Response and Acquisition, World Wildlife Fund
• WWF’s mission is to conserve nature and reduce the most pressing threats to the diversity of life on Earth.• WWF has a mature fundraising program with over 1 million members.
Kerri Kerr – Senior Vice President, Avalon Consulting Group
• Avalon is a full-service direct marketing fundraising agency.• Since 1997, Avalon has helped our clients raise millions of dollars to achieve their visions for a better world—while building relationships with people who share their passion and support their important causes.
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Acquisition in the Retention EquationIn today’s session…
Learn how leading fundraising organizations are using data to make
strategic changes to improve their membership retention.
See how fundraising programs are evaluating program success based on
both upfront and long-term performance metrics.
Know how to move beyond basic campaign analysis with more
insightful master file analysis that will lead to real strategic change and
impact on retention.
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How do we define “acquisition”?
A system of acquiring new donors to an organization using a variety of channels, formats and techniques.
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How do we define “retention”?
Donors who start the year having given a gift in the previous 12 month period, and make a gift in the subsequent 12 month period, are considered retained.
Ex: If you start the year with 1,000 “current” donors, and over the period of the next 12 months 600 of them make a gift, retention is 60% for the year.
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Why retention and acquisition?
Traditional discussions around retention have focused on the donor experience.
Yet, data shows a clear link between the start of the donor relationship and that donor’s subsequent retention and long-term value.
If donors don’t join your organization for the right reasons – namely, passion about your mission and a desire to make a real difference – then no amount of engagement
and retention activities will keep them on board.
Acquisition provides a critical opportunity to focus expense where the organization will get the best return and retention – on how those donors are acquired in the first place.
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Retention
Offer• Price Point• Premiums• Message• Benefits
Channel• Direct Mail• Telemarketing• Web• Email • Face to Face• DRTV
Audience• List Selection• Key Demographics
Retention is closely linked to three core elements of new donor acquisition…
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Case Studies: Evaluating and Structuring
Acquisition Programs with an Eye on Retention
CHANNEL
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Channelxxx
Background: NPCA’s large and robust acquisition program encompasses multiple channels. While direct mail is dominant by volume, analysis has shown that joins from the web and email are very valuable and show stronger long-term value metrics.
After five years, web and email
joins’ retention is notably higher
than direct mail joins.
Year 1 Year 2 Year 3 Year 4 Year 510%
15%
20%
25%
30%
35%
23.4%22.1%
18.6%15.3% 14.0%
26.2% 27.9%
23.4% 19.7%19.6%
28.4%
30.5%
24.9%22.1% 22.2%
Direct Mail Joins Web Joins Email Joins
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#Bridge15
Email joins have the highest donor value, although direct mail joins have been increasing in value over time.
Channelxxx
Direct Mail Web Email
$81
$152
5 Year Donor Value
$43
• Donor value is nearly doubled for web joins and tripled for email joins.• Yet, low response rates and universe limitations restrict the growth of web and
email joins.
Channelxxx
Email and web joins are now 7%
of new joins compared to 2.5%
in 2009.
FY09 FY10 FY11 FY12 FY13 FY14
DM New Joins Web Joins Email Joins TM Joins
• Knowing the value and retention of new joins by channel, NPCA has allocated resources to growing web and email joins, while simultaneously working to increase the value of direct mail joins.
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Channel
Background: For WWF, all acquisition channels are tracked with the same metrics, and all compete on equal ground for investment dollars.
• Direct mail acquisition• Reinstates• Direct Response TV• Online activities (banner ads, Change.org, Google, etc.) • DRTV – the cost to acquire a monthly member is 7 times greater than a direct mail
donor, but the LTV of the donor is much higher and the net LTV is much higher.
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Channelxxx
Background: An environmental organization acquired a significant number of members through a face to face canvassing program. While the volume of acquisition joins increased at the peak of the program, revenue and overall file size remained flat.
Canvass joins were the
dominant channel of acquisition
from FY06-FY09.
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Channel
Analysis by channel indicated that retention over five years varied dramatically by channel, with canvass joins far underperforming other direct marketing channels.
Year 1 Year 2 Year 3 Year 4 Year 5
28.8%
20.9%
6.9% 7.0%
23.2%
13.6%
DM Joins Canvass Joins Web Joins
With this information among other factors, the organization cancelled the program and
shifted funds to more productive
channels.
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AUDIENCE
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Audience – List Analysis
• Utilize individual List Return on Investment metrics. • Don’t be fooled by upfront performance!
List 1List 2List 3List 4List 5List 6List 7List 8List 9
List 10List 11List 12List 13List 14List 15List 16List 17List 18List 19List 20List 21List 22List 23List 24List 25List 26
-100% 0% 100% 200% 300% 400% 500%
Gross Return on Investment at 3 Years
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% retained
Audience – Warm Prospects
• Look for opportunities to analyze and include in-house lists (e.g., activists, visitors, etc.). In many situations, these pre-qualified lists show higher retention and value over time.
• For NPCA, acquiring members who are also activists leads to stronger retention when compared to those not additionally qualified by activism.
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Activ
ists
Non
-Acti
vist
s
Members Lapsed Members Deep Lapsed Members
WWF Direct mail acquisition:• Work closely with list broker.• Share updated present value by list and list select quarterly.• Along with standard metrics, every list plan incorporates a Present Value Calculation.
Goal: Mail lists that have positive “Total Present Value/Gross Cost ratio” of one or greater.
Example:
List Cost/ Donor (PL) Subs Rev/Donor
Blended Net Cost/Donor Total Blend Net
Gross Cost Per Donor
Total Present Value/Donor
Total PV/Gross
Cost
List A ($37.24) $ 82.28 $ 45.04 $ 0.35 $104.05 $149.09 1.43
List B($15.87) $ 33.28 $ 17.41 $ 0.03 $43.72 $61.13 1.40
Audience – List Analysis
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Audience – List Analysis
xxxProspecting Database Case Study – Targeting Your Audience for Long-Term Value
• In March of 2014, WWF teamed with Infogroup to create a Prospecting Database
• Only worthwhile if you mail 10,000,000 pieces or more a year
• Benefits:
• Select high value names from the Prospect Database
• Post-merge model outside lists, and drop names that are not high value with better projected retention
• Review records regardless of list, and assign packages and ask strings at a record level
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Retention Year 1 Retention Year 2 Retention Year 3 Retention Year 4 Retention Year 5 Retention Year 6 Retention Year 70.0%
0.5%
1.0%
1.5%
2.0%
2.5%
Increase of Female Retention over Male
Audience – Demographics
• Identify demographics that indicate a high-retaining donor.• Use these attributes to target your universe.• For WWF, female donors equate to higher retention.• WWF’s file is 74% female. After 7 years, females retain 1.8% better than
males.
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WWF uses this information for
list qualification, selection, and
enhanced targeting in acquisition.
1 < 35 35 < 45 45 < 55 55 < 60 60 < 65 65 < 75 75 < 85 85+
Retention Year 1 Retention Year 7
Audience – Demographics
• Similarly, for WWF (and many organizations), age matters.• Up to a point, the older the donor, the stronger the retention.• For WWF, 65-75 year olds retain best.• Invest your acquisition dollars to get the members who will pay back
more over time.
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Audience – List Analysis
• Test and analyze co-op modeled lists as part of your acquisition audience.• For many organizations, co-op lists generate high retaining and high LTV members when
compared to outside lists.• There are vast differences between co-ops – assess both short-term and long-term
performance to determine the most productive universe.
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Co-op #1
Co-op #2
Co-op #3
Co-op #4
Non-Coop (Outside Lists)
Co-op #5
Co-op #6
-60% -40% -20% 0% 20% 40% 60%
46%
15%
13%
-3%
-11%
-22%
-39%
GROI Year 1
Audience – Warm Prospects
• Maximize your lapsed universe as a priority over outside lists.• For most organizations, the long-term donor value of lapsed re-acquired names far
exceeds new joins.
<$10
$10-14
$15-19
$20-24
$25-49
$50-99
$0 $20 $40 $60 $80 $100 $120 $140 $160
New Join Re-Acquired24
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OFFER
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Offer – Price Pointxxx
Background: The National Parks Conservation Association acquired most donors through their acquisition program with a $15 starting ask. Donor-level analysis showed a clear correlation between a lower first gift and reduced five year retention.
Five year retention
increases by 35% for new joins at the $25 first gift.
Year 5
5.5%
8.7%10.5%
13.4%
18.1%
22.9%
27.3%
$1-9 $10-14 $15-19 $20-24 $25-49 $50-99 $100+
+35%
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Offer – Price Point
-34%
-26%
$15 Ask
$25 Ask
ROI after 1 year
Because a higher ask string typically equals fewer donors and potentially less revenue, NPCA tested the control $15 ask against a $25 ask string.
At the end of one year, retained members were virtually the same in quantity, and net revenue and ROI favored the $25 ask, allowing NPCA to ramp up the strategy.
Initial joins andretained members after 1 year
$15 Ask $25 Ask
2381
2019
560 546
Initial joins
Retained
Initial joins
Retained
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Offer – Premiumxxx
Background: NPCA has historically acquired donors with a premium at the $15 level. In 2012, the organization conducted a test of a package with no premium to assess if the long-term value and retention offset the initial higher response rate.
Response Rate
0.90%
0.67%Premium
No Pre-mium
Initial response rate was 34% higher for the
premium package.
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Year 2 Retention
19.7%24.3%
No Pre-miumPremium
Offer – Premium
• After two years, retention was 23% higher for the No Premium package.• However, the initial volume of donors acquired with a premium was enough to
offset stronger LTV metrics from the no-premium group, leaving Year 1 net revenue virtually tied, and Year 2 strongly favoring the Premium joins.
4% higher for Premium joins 114% higher for Premium joins
PremiumNo Premium
Year 1Net Revenue
Year 2Net Revenue
While retention is a key part of the equation, other elements must also be considered in decision making.
$0
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As with NPCA, WWF analysis has shown that higher initial gifts equate to higher retention.• Donors who join at $100 or more retain best, but there are not many of those!• Sweet spot: The sweet spot is $33 or above, and that group has lifetime revenue 3 times over other joins.
Offer – Price Point
Goal: Increase those who join over the
premium awarding ask amount. Donors who choose to give more
than the premium price point retain better.< $16
$16
$17 <= $26
$26 <= $52
$52 <= $100
$100+
-5.0% 0.0% 5.0% 10.0% 15.0% 20.0% 25.0% 30.0%
Retention differences by first gift amount (<$16 baseline)
Retention Year 7 Retention Year 1
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Retention Year 1 Retention Year 2 Retention Year 3 Retention Year 4 Retention Year 5 Retention Year 65.0%
10.0%
15.0%
20.0%
25.0%
30.0%
35.0%
13.9%14.8%
9.4%
One Premium No Premium Maximum Number of Premiums (21)
• WWF analysis has shown that receiving a high number of premiums, and also certain “killer” join premiums, equates to a lower retention rate as it impacts the type of member acquired.
• Members are tracked by join premium and retention over time.• Over 7 years, people who joined and opted out of the premium retained the best.• Those who received the maximum number of premiums over time showed the weakest
retention.
Offer – Premium
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Offer – Messagexxx
Background: A performing arts organization sees ebbs and flows in new member acquisition directly related to ticket sales to popular performances. There is a clear relationship between spikes in acquisition in a popular performance year and declines in retention the following year.
FY13 = popular performance
drives new joins to record highs.
FY12 FY13 FY140
1,0002,0003,0004,0005,0006,0007,0008,0009,000
DM Joins TM Joins Web Joins Email Joins
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Offer – Messagexxx
• Popular performance = retention spikes in 2013.• New joins triggered by popular performance retain at weaker rates the following year.• Recognizing this trend and increasing efforts to retain those offer-inspired joins is
key, although challenging.
FY12 FY13 FY1420%
30%
40%
50%
60%
70%
51.7% 51.9%
64.4%66.0%
29.8%25.8%
Overall Multi-Year First-Year
Overall, multi-year, and first-year retention over a three year period.
Large event
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Offer – Messagexxx
Background: A conservation organization focused acquisition aggressively on an urgent single-issue, single-species topic. While new joins increased, subsequent retention of those joins was weak as later messaging covered a variety of topics and species.
Year 1 Retention Year 2 Retention0%5%
10%15%20%25%30%35%40%
Historical AverageSpecies Specific Package, Sample Year 1Species Specific Package, Sample Year 2
• Species-specific package shows weaker retention compared to historical averages.• Organization tested into a broader-focused package to increase long-term value,
retention and revenue.
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Analysis
Understand the impact by channel and the appropriate channel usage
Test and measure retention by offer: message, price point, events, benefits or other key variables.
Understand and utilize key demographics and donor attributes to target your audience
Monitor improvement of key metrics on an ongoing basis
In summary:Maximizing retention in acquisition…
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Questions?
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Laura ConnorsDeputy Vice President for Membership National Parks Conservation Association
Sharon DreyfussManager - Direct Response and Acquisition
World Wildlife [email protected]
Kerri KerrSenior Vice President
Avalon Consulting [email protected]
Thank You!