It’s tempting to judge the success of an acquisition program by simply looking at how many new donors signed up. The more donors the better, right? The reality is a bit more complicated. The better question to ask is: for how long did each donor continue giving?
When you factor in acquisition costs (e.g. data costs, calling costs, or other services like face-to-face suppliers), regular givers who cancel within the first six, twelve or even 18 months might actually end up costing the charity money. Attrition rates (i.e. the percentage of donors that churn per month) are therefore critical for a successful program.
Dataro recently compared attrition rates between newly acquired regular givers and reactivated regular givers across a broad range of charities. The results showed that reactivating a lapsed giver tends to deliver better long term value than acquiring a new one.
Interesting insights include:
- 42% of new donors typically churn within the first 12 months, compared to just 32% of reactivators
- After 24 months, 57% of new donors have typically churned, compared to 47% of reactivators
Of course, results will vary from organisation to organisation, but the trend in this analysis is clear.
Acquisition and retention are opposite sides of the same coin and both are critical for growing a healthy regular giving program. But this analysis confirms charities should pay close attention to how long donors acquired from different programs are retained. Why do some donors churn more quickly than others? Such insights can help to develop a more focussed acquisition and retention strategy. It also shows that failing to focus on reactivations is a missed opportunity to re-engage with potential long-term supporters.
Dataro supports charities in identifying which lapsed regular givers are the most likely to reactivate each month with our machine learning CRM integrations. For instance, we recently helped a major children’s charity improve reactivations by 40%. This analysis further demonstrates the long term value of these reactivated regular givers.
To find out how we helped increase reactivations, feel free to get in touch.