Why donor-centricity should be a strategic priority for NFPs

Why donor-centricity should be a strategic priority for NFPs

by | Apr 23, 2020 | donor-centric, Donor-centricity, Sustainable Fundraising, Trust Economy

In my previous blog post, I explored what it means to be donor-centric. This post, I’ll explain why we at LemonTree believe donor-centricity should be a strategic priority for NFPs.

Donor-centricity is the ongoing dedication to increasing the depth and breadth of your donor understanding. In doing so, you generate insights that can be used to tailor your communication and engagement efforts and demonstrate to your donors that they are at the heart of your entire organisation. This builds trust and loyalty – the critical foundations of any lasting, sustainable relationship.

How do we know this? Because we’ve seen it before in the commercial world.

Customer-Centric Commercial World

Long ago the commercial world realised that the ‘customer is king’ and so adopted a customer-centric approach to their business. Marketing teams work tirelessly to get inside the hearts and minds of their customers so they can position and promote their products and services in the right way, at the right time and with the right message to engage and nurture the customer and eventually make the sale.

Faced with increasing pressures, change and disruption from technological innovation, and a general decline in trust amongst businesses, commercial entities recognise that sustained competitive advantage doesn’t belong to those who provide the best product or service. Sustained competitive advantage belongs to those who provide a sustained focus on delivering the best customer experience.

A positive customer experience makes us feel something and – as humans – we are motivated to act based on how we feel. We tend to make decisions based on emotion, then find a way to justify that decision based on logic. Which is why we choose to walk that little bit further to get our morning coffee, even though it costs 50c more…but the barista greets us by name, remembers our order and takes the time to ask how our kids are getting on with that school project.

We walk further and pay more because of the way the experience makes us feel; that’s what keeps us coming back. It makes us trust the barista; makes us loyal to the cafe and gives them a competitive advantage. In today’s challenging times with COVID-19, this entrenched loyalty – built up from years of providing a positive customer experience – is keeping many businesses alive, and for that, we applaud them and wish them every success.

To deliver the best customer experience and earn a sustained competitive advantage, businesses need to earn trust and build loyalty by adopting a customer-centric approach:

  1. Understanding what their customers want, need, like, dislike, hope, fear and value at each stage of their life (see Fig. 1)
  2. Infusing these customer insights across all their business functions to help shape decisions
  3. Creating a unique and ongoing value exchange for their customers
  4. Engaging in open, honest and transparent two-way conversations with their customers, across many different channels
  5. Empowering customers to interact with their brand on their own terms

This same approach applies to not-for-profits looking to secure sustainable giving. You need to earn trust and build loyalty by adopting a donor-centric approach, and that starts by increasing the depth and breadth of your donor understanding.

Fig. 1

Understanding your Donors

In the same way as a customer’s ability or desire to purchase a product or service will vary over their lifetime (see Fig. 1), so too will a donor’s ability and willingness to donate to your cause vary in both time and dollars as their circumstances change and evolve.

Adopting a donor-centric approach enables you to recognise the changes in their life stage (whether it’s a significant milestone or subtle adjustment) and adjust your communication and engagement activities accordingly so you sustain the relationship over a longer period of time.

Smart organisations – both commercial and NFP – would rather have a customer or donor contributing $25 annually for 10 years, versus a one-off transaction of $500. That is not sustainable.

Historically, donors have reported they often feel treated like ATM machines, where the focus is on the financial transaction itself, rather than taking the time to nurture and engage with the donor. But if NFPs treat the donor relationship as a purely transactional one, then it will only ever yield one-off transactional results.

The building blocks of sustainable relationships

Remember, trust and loyalty, are the building blocks of any long-lasting relationship. But they are not built on a series of one-sided transactions. Trust is built over a series of two-way conversations during which the donor feels recognised, valued and instrumental to your organisation and its beneficiaries.

If you can make your donors feel this, they are far more likely to stay loyal to your cause…and even adopt it as their own.

So if you want to grow sustainable giving for your cause, and for the Australian fundraising industry, you need to adopt donor-centricity as a strategic priority to earning trust and building loyalty.

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If you’re on a mission to become more donor-centric, we invite you to join LemonTree’s free Donor-Centricity Collective (DCC). As a member of the DCC you can share best practice, learn from your peers, keep up-to-date with the latest strategies to become more donor-centric…and be part of a movement to help grow sustainable giving in Australia!

Next up in this series:

  • Barriers to donor-centricity: the challenges you face
  • How to become more donor-centric
  • The different stages of the donor relationship and how they impact donor-centricity

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Protecting your donors and your sustainability, our conversation with FIA

Protecting your donors and your sustainability, our conversation with FIA

by | Jul 11, 2019 | Donor-centricity, Sustainable Fundraising

Many of us work in this sector to make a positive impact on society. But has the nature of fundraising in today’s digital world led to a proliferation of communication and around privacy concerns that sometimes challenge our core beliefs?

Have the negative experiences of our overseas counterparts; the rise of “leaking donor bucket” syndrome; – and the declining ability to acquire donors via traditional channels got you wondering where things have gone awry; what can we learn; and what can we do differently?

On our mission to create more sustainable giving practices in Australia, these questions and concerns are certainly at the forefront of our minds here at LemonTree Fundraising.

That’s why we recently sat down with the FIA’s Head of Code and Regulatory Affairs, Scott McClellan, to discuss best practice donor protection and others trends across the industry. Some really interesting market research was discussed and some powerful areas of focus resulted from our conversation. 

Handling Donor Preferences

Earlier this year FIA’s Code Authority commissioned mystery shopping of 30 FIA organisational members to assess their compliance with the Code. Donations were made in April via telephone and website.

To date no breaches of the Code have been recorded. Nevertheless, the monitoring found that most charities that received the unsolicited donation by telephone did not take the opportunity to ask the donor about their preferred method for receiving future communication.

By contrast, a clear majority of charities contacted via their website did enable the donor to choose their preferred method of future contact.

Similarly, receipts sent to donors generally had no option for the donor to alter their communication preferences. While there is no requirement to provide a communications preference choice to current donors, it is considered best practice to regularly offer it in the context of donor care.

Scott also mentioned “a current focus of Code monitoring is the treatment of donors who may be in vulnerable circumstances. This is a tricky area, demanding compassion and good judgement from fundraisers. The Code itself requires fundraisers, when they identify such a person, not to accept a donation.”

FIA has published a practice note to help members identify donors who may lack capacity to make a decision to donate due to their vulnerability.

Communication Compliance

Other topics discussed with Scott, included the changes we are seeing in the awareness of and preparation for the governments Digital Platforms Enquiry, Consumer Data Rights and Europe’s General Data Protection Regulation (GDPR).

As these privacy-driven controls begin to tighten, both the FIA and LemonTree Fundraising have observed mixed views across fundraising on high vs. low frequency of communications and which is in the best interests of the donor.

Interestingly, in what appears to contrast the increasing privacy-driven compliance measures, Australian Communications and Media Authority (ACMA) has declared overall communication complaint levels from Australian consumers are in decline. However this could be due to the mass reduction in telemarketing of the financial sector, as opposed to changes in fundraising telemarketing practices.

What did we conclude?

Protecting vulnerable people is getting better and easier with the ability to apply ‘vulnerable propensity’ scoring across your donor base and equip your donor support team with a flag on your CRM for the next time they communicate with a potentially vulnerable donor.

When it comes to the frequency with which you communicate with your donors, one size does not fit all. It’s no longer enough to be compliant with government and industry regulations; you need to be compliant with your donors. Begin capturing communication preferences on your donors as part of your opt-out process. Often they are more frustrated, rather wanting to stop giving completely.  Check out our LemonTree Fundraising preference/opt-out capture page as an example.

Finally, conversations increase learning which leads to change. We each play a part in the future of the fundraising industry; it’s important that we continue to share our experiences and learnings so together we can create more sustainable giving practices in Australia. We look forward to continuing our conversations with Scott and the FIA and encourage each of you to tap into your passion for social good and contribute to the discussion. Comment below or reach out to Scott at smcclellan@fia.org.au or myself joel.nicholson@lemontree.com.au directly.

LemonTree Q&A with Dr. Adrian Sergeant

LemonTree Q&A with Dr. Adrian Sergeant

by | Feb 14, 2019 | Customer Journey, Sustainable Fundraising

Adrian Sargeant is Chief Executive of The Philanthropy Centre. He is passionate about achieving massive growth in philanthropy. All his work is focused on achieving that by developing the value that donors get from their giving. He specialises in the new science of philanthropic psychology, a science that is routinely doubling the income for those charities that apply it… [Source: FIA Conference].

The LemonTree team compiled a handful of burning fundraising questions for renowned Author and Fundraising Professor Dr. Adrian Sargeant, featured speaking at the upcoming FIA Conference in Melbourne, here is what he had to say:

Q – With acquisition of donors via traditional channels becoming more challenging, how should charities adapt practices to grow their donor numbers?

Couple of thoughts on this. First – recruit the right donors. Don’t be tempted to recruit poor quality donors just to push up the figures for the initial ROI. In the US in particular, fundraisers have honed their skills in recruiting low value donors who will never come back and make a second gift. And their Boards applaud. Second thought – get a proper welcome cycle in place to maximize subsequent retention and loyalty

Q – What are the biggest dangers for charities that you consider are over communicating to their donors? Do you see resting donors a viable option?

I’m not sure what ‘over-communication’ looks like. If I like you and I care about you – and I enjoy what I receive – how can you over-communicate? What you’re really saying here is that we are over-communicating with rubbish that doesn’t in any way reflect donor interests, needs or aspirations. If you’re squarely donor centric and concerned with how you make people feel, resting individuals shouldn’t be necessary.

Q – Have you seen personalising communications based on motivational scores make a difference? Or is it a progressive learning program over many years to get right?

Hmm – well I take issue with motivation, its very limiting. The next big thing in fundraising will be identity. So its not ‘why do people give’ – its what are people saying about themselves when they give. And when you orient a fundraising program around adding value for the types of people that donors are – magical things happen. People give more and they feel better about themselves when they do.

Q – What are your top 3 tips to building more sustainable long term fundraising programs?

I’ve touched on this already. Forget behavioural economics and all that 20th century rubbish. Focus on enhancing the wellbeing of supporters and construct communication that genuinely adds to that. AND think through what activities you can have folks engage with that will genuinely add to that sense of wellbeing – even if those activities raise no money. In short – stop thinking about your needs and focus on theirs. If people feel good, the money will follow.

SHOUT OUT TO: David Craig from Precision Fundraising for connecting us with Dr. Adrian Sergeant.

We are now living in a Trust Economy

We are now living in a Trust Economy

by | Jan 24, 2019 | Sustainable Fundraising, Trust Economy

By Joel Nicholson – LemonTree Founder

We are now living in a Trust Economy. Thanks to today’s technology, digital and social media, we can quickly and easily connect with – and do business with – more and more people from all over the world. Forget Bitcoin. Trust has become the currency ‘du jour’.

But how ‘real’ are these connections?

How much do we really know – and trust – our 4.9 star-rated Uber driver?

Or the owners of the Airbnb house we’ve just booked?

Or the latest person to follow us on Instagram?

What do they really know about us?

With the growing number of connections, has come growing statistics on depression, disengagement and authenticity, along with a continuing decline in the World Trust Index, suggesting that we are suffering from a false sense of connection and belonging.

Winning and losing in the Trust Economy

As humans, we are social, communal beings at heart. We want to meaningfully connect with our communities. We want to belong to a tribe. We want more meaning, more fulfillment, more happiness.

In the Not-For-Profit industry specifically – where a common question from donors is: “Where does my money go?” – it is becoming increasingly important to focus on growing lasting, sustainable relationships vs. amassing unsubstantiated connections.

Fundraisers and charities that focus on relationships over transactional connections will be the winners in this new era.

Keeping our donors is more important than ever.

Those that don’t invest in getting to know and understand their donors and provide them with real value, will fall away in this trust economy and lose the chance to make a real difference to their cause.

Donor-Centric Life in the Trust Economy

In the trust economy, every donor is deeply understood and deeply valued.

We move from transactions (RFM) to motivations and preferences.

You are genuinely connected with your donors.

You collaborate with others to further your knowledge and understanding of your donors so you can truly care for and work in their best interests!

Those natural human chemicals of Oxytocin and Sertonin are flowing.

What do we need to thrive in the Trust Economy?

What if you knew your localised motivated donor?

What if you knew the exact time of year your donor prefers to support your cause?

What if you knew which donors shared the plight of YOUR cause and which donors are simply do-gooders?

How would you communicate with them?

How would you engage with them?

How would you attract and retain them?

The reality of the Trust Economy reality is now.

In 2018, 54 LemonTree members, leant in and embraced the Trust Economy.

They are now matching messages to motivation segments; testing multi channels across Direct Mail, eDM, SMS and phone; and tracking LTV vs. immediate response rates.

How are you adapting to the Trust Economy? (Share your comments below)

Get to know what drives the founder of LemonTree Fundraising

Get to know what drives the founder of LemonTree Fundraising

by | Oct 16, 2018 | Behind the scenes

Traditionally, the first act establishes character, relationships and setting; it’s where the first plot point happens. This series collects the ‘first act’ jobs, careers or businesses of entrepreneurs… Meet Joel Nicholson.

Joel Nicholson isn’t afraid to challenge a decision. His first foray into work was as a teenager in a fish shop, where he says he learned “the classics”; customer service and people skills. “But after about three weeks I got sacked,” he says. “I went back to the boss and said, ‘That can’t be right’. He took me back in.”

But that false start wasn’t the career he would first seriously embark on: “My first career was in professional golf,” Nicholson says. “It’s such a mental game. I was really challenged by the idea of conquering your mind. That was the appeal, but I definitely had a view towards making it right to the top in the world.”

After playing for a few years he followed his ambition to Europe for a season, but a survey of the other older players had him questioning the realities of a career on the green. “I discovered there are too many freaks in this world and there’s probably an easier way to make a living… I looked around and there [were] a lot of 29-year-olds still doing the golf circuit. They were winning about $10,000 or $15,000 a year. That’s below the poverty line, basically. So even though they were freakishly good talent, the vast majority were broke.” It was a sobering realisation.

Change may force you into new situations but those situations often don’t make sense until after the fact. “After golf, I wasn’t thinking, ‘Oh, I’m going to start my own business. I’m going to take over the world.’ I just literally came back, found a job and just started working in that,” says Nicholson. “After a number of years, the owners were on the verge of retirement, so I said, ‘How about I buy a part of the business?’”

Click here to continue reading our very own Joel Nicholson’s featured story on ‘Kochies Business Builders’.