Analysis: How Consumer Confidence Affects Regular Giving
Tim Paris – 30 April 2020
The COVID-19 pandemic has led to a historic plunge in consumer confidence.
As part of our analysis of economic downturns and regular giving retention, we compared consumer confidence metrics with regular giving churn. The correlation is clear; drops in consumer confidence are typically closely followed by an increase in regular giving churn.
The analysis provides an important insight for charities stepping up their retention programs in response to the crisis.
In this analysis, we compare consumer confidence data from the ANZ-Roy Morgan Consumer Confidence Monthly Rating with regular giving data back to before the global financial crisis.
To generate this analysis, churn rates and consumer confidence metrics are normalised. The consumer confidence index is also inverted, so a drop in consumer confidence is reflected as a spike in this graph.
There are several key trends. Importantly, when consumer confidence plunged in 2008, it was closely followed by an increase in regular giving attrition. Equally, as consumer confidence improved, retention rates followed. The question is, will the record consumer confidence drop triggered by COVID-19 result in a similar outcome?
