Pick 3 for FY19: Revenue Retention Tactics
At the Contributor Development Partnership, we, like you, are focused on member retention. Just as important to funding our mission is Revenue Retention. You will notice on your CDP Revenue Opportunity & Action Report (ROAR) that six of the twenty-four KPIs are related to Revenue Retention:
Overall Revenue Retention
Overall First Year Revenue Retention
First Year Mail Acquired Revenue Retention
First Year On-Air Acquired Revenue Retention (excluding web pledge)
First Year On-Line Acquired Revenue Retention (web, web pledge & web email)
Sustainer Revenue Retention (for all Sustainers giving in the first month of the prior year)
CDP is focused on maintaining and growing NET revenue to mission, and we are emphatic about measuring Revenue Retention. As part of our series, Pick 3 for FY ’19, investing time & resources in at least one of the metrics above could provide a decent return. We know:
Current donors are more likely to give more money when asked often enough and when the solicitation is compelling
Current donors who give less this year than they gave last year is a signal we need to which we need to pay heed
Unlike the Member Retention metric, which must be capped at 100%, the sky’s the limit with the Revenue Retention metric. For instance, a donor could easily jump from a $100 annual contribution to $120 by switching to Sustaining giving; a $500 annual donor could be compelled to give an extra $200 gift at the end of the calendar year, and so on
If you have neutral or growing Revenue Retention trends, CDP would like to know what practices you have in place so we can share them with the CDP community.
There are scenarios where Member Retention is solid or growing and Revenue Retention is falling. A decrease in the latter is far more worrying than a decrease in the former. We can change our fundraising practices to increase donor acquisition or lapsed recapture, but a decrease in revenue from a steady number of donors is telling you a story of how your constituents are interacting/valuing with your station. Of course, it could also be a sign of changes in your fundraising efforts. For stations that experience negative Revenue Retention, some questions to ponder:
Have you changed (or lowered) donation form levels?
Are your direct mail and web renewal ask strings strategically tweaked each year?
Do you have a robust Additional Gift solicitation program? (direct mail, email, telemarketing)
Have you focused on lower entry-level pledge levels on-air in an effort to increase new member acquisition and inadvertently renewed current members at a lower level?
Do you regularly ask Sustainers to upgrade?
Are your efforts at retaining first-year donors and quickly asking for additional gifts strong enough?
CDP Best Practices checklists (accessible with your CDP password) can help your station assess your efforts associated with Additional Gift, Sustainers, Email & Online solicitations.