Don't ask me how I know, but in Alcoholics Anonymous meetings you'll sometimes hear a member mention "The Elephant in the Living Room." In AA circles, a family member's drinking problem is the elephant in the living room that everyone sees, that everyone feels uncomfortable about, but that no one wants to confront. In direct mail fundraising circles, the elephant in the living room is abysmal conversion rates.
According to Stephen Hitchcock, President of Mal Warwick and Associates, Inc., only 35 percent of new donors ever make a second gift. Which is to say, putting it the other way, a whopping 65 percent of donors acquired by direct mail give once and never give again. Confronting this sobering statistic takes courage but is worth the effort. Heres why:
- donors acquired through direct mail usually generate net income only after making a second donation, because acquisition mailings usually lose money (you must lose money to gain a donor)
- re-soliciting existing donors is likely to perform five to eight times more profitably than acquiring the same number of equally generous first-time donors
- today's new donor is tomorrow's major donor and legacy gift prospect
What all of this means is that the most important gift in direct mail fundraising isn't the first gift but the second one. What's most important isn't the first mailing that acquires the donor, although thats vital, obviously, but the second mailing (or third or fourth) that keeps the donor. So the place to concentrate your scarce financial resources is not more and more donor acquisition but better donor conversion.
Donor conversion is the process of turning a first-time donor into a repeat donor. Some people call it donor renewal, which is also the act of persuading donors and members to renew their support year after year.
Before asking again, W-I-N them
You have work to do between receiving a donors first gift and asking for a second one. First-time donors need a reason to repeat their generosity. I recommend you W-I-N over your new donors, as follows.
Give them a WelcomeMail a welcome kit or new member package within a week of receiving the first gift. Your goal is to inform and inspire your new donors, helping them see that they made the right decision in mailing you a gift, and that your organization deserves their continued support.
Get them InvolvedIn 1993, according to fundraiser Kent Dove, the average gift among households with volunteers was 55 percent higher than among households with no volunteers. So invite your first-time donors to sign a petition, answer a survey, volunteer or drop by for a tour. Involvement leads to commitmentand that second gift.
Give them NewsFirst-time donors have attended one game but they aren't fans yet. To transform them into long-term, loyal supporters, you need to educate them with newsletters, updates and progress reports. To attract that vital second gift, the most important thing to tell your new donor is what you did with his first gift. Donors want to see proof that you have used, or are using, their last gift as the donor intended.
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