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Thursday, April 27, 2017

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Dr. Sargeant says you're only doing half your job
Tom Ahern

February, 2010

And he has the data to prove it.
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I had the most extraordinary encounter at the 2009 Toronto AFP Congress. I was speaking with another consultant, and she was lamenting.

She insisted that the mantra among nonprofits lately had become: "Retention. Retention. They're cutting acquisition spending, and focusing instead on retention."

If true, it's about time.

Not the part about cutting acquisition activities -- sorry, you always have to acquire new donors and spend on it.

But focusing on retention? Yes. DO. Retention figures in the fundraising industry right now are a disgrace, and getting worse every year: clear evidence of something horribly wrong with our methods.

Who says? Dr. Adrian Sargeant.

If you're unfamiliar with that name, and yet consider yourself a fundraising professional, be aware that you need to update your reading.

Start with Building Donor Loyalty, the book he co-authored with Elaine Jay and published with Jossey-Bass in 2004. In it he explains his essential concept, LTV, which stands for a donor's "lifetime value."

Dr. Sargeant moved to the United States from the UK in 2006 to accept the first Robert F. Hartsook Chair as a professor of fundraising at the Center on Philanthropy at Indiana University. Jossey-Bass has scheduled his new textbook, Fundraising Principles and Practice, co-authored by Jen Shang, for release in April 2010.

Adrian Sargeant is a key crossover academic, bringing a measure of badly needed rigor to the fundraising industry's quest for improved income and retention.

He started in marketing research, where they take no prisoners. He then applied the same rigorous academic methods to the fundraising profession -- and found we are all prisoners: of our accepted wisdom, preconceptions, and daft ideas that many swear by (that humankind needs more self-sticking address labels, for instance).

At the 2009 Toronto AFP Congress (which set records for attendance, BTW, a tribute to this conference's well-deserved reputation for relevance), Dr. Sargeant introduced his latest findings.

They were shocking. Did you know, for instance, that 8 out of ten first-time donors in America, on average, do not make a second gift?

Now, if you were a marketing manager for a commercial firm, and you lost 8 out of 10 new customers, you'd probably be fired for gross incompetence.

However, if you're a fundraising manager in America, and you lose 8 out of 10 new customers (i.e., donors), apparently, well, you're just normal.

Adrian Sargeant is raising the bar by showing us how much money we're leaving on the table by failing to perform well with essentials like donor cultivation.

The prize is worth the trouble, too, Dr. Sargeant discovered.

Improving your donor retention by 10 percent will improve your donor revenue 50 percent immediately. And that's just the beginning, because the real benefit from this improved loyalty is realized as the years pass and donors-who-stick continue to express their support through annual gifts, campaign contributions, and bequests.

[Upcoming in the next newsletter: Part 2 of this report from the 2010 Toronto AFP Congress appearance of Dr. Adrian Sargeant.]

>>> Takeaway >>> You're job, as a fundraising communicator, is to entertain your donors. I'm not talking flaming batons and card tricks. Your donors are not six-year-olds at a birthday party. Your donors are middle-class, middle-aged, nice adults who want to be helpful. When you show-and-tell them how they are making a real difference via their gifts, you entertain them. They feel joy. They feel pleasure. They beam. They stay interested.

Tom Ahern can be found at www.aherncomm.com



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