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Laura Connors, National Parks Conservation AssociationSharon Dreyfuss, World Wildlife Fund

Kerri Kerr, Avalon Consulting

Where's the Acquisition in the Retention Equation?

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Here with you today…Laura Connors – Acting Vice President, Membership, National Parks Conservation Association

• NPCA’s mission is to protect our national parks for future generations.• NPCA has more than 1 million members and supporters.

Sharon Dreyfuss – Manager, Direct Response and Acquisition, World Wildlife Fund

• WWF’s mission is to conserve nature and reduce the most pressing threats to the diversity of life on Earth.• WWF has a mature fundraising program with over 1 million members.

Kerri Kerr – Senior Vice President, Avalon Consulting Group

• Avalon is a full-service direct marketing fundraising agency.• Since 1997, Avalon has helped our clients raise millions of dollars to achieve their visions for a better world—while building relationships with people who share their passion and support their important causes.

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Acquisition in the Retention EquationIn today’s session…

Learn how leading fundraising organizations are using data to make

strategic changes to improve their membership retention.

See how fundraising programs are evaluating program success based on

both upfront and long-term performance metrics.

Know how to move beyond basic campaign analysis with more

insightful master file analysis that will lead to real strategic change and

impact on retention.

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How do we define “acquisition”?

A system of acquiring new donors to an organization using a variety of channels, formats and techniques.

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How do we define “retention”?

Donors who start the year having given a gift in the previous 12 month period, and make a gift in the subsequent 12 month period, are considered retained.

Ex: If you start the year with 1,000 “current” donors, and over the period of the next 12 months 600 of them make a gift, retention is 60% for the year.

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Why retention and acquisition?

Traditional discussions around retention have focused on the donor experience.

Yet, data shows a clear link between the start of the donor relationship and that donor’s subsequent retention and long-term value.

If donors don’t join your organization for the right reasons – namely, passion about your mission and a desire to make a real difference – then no amount of engagement

and retention activities will keep them on board.

Acquisition provides a critical opportunity to focus expense where the organization will get the best return and retention – on how those donors are acquired in the first place.

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Retention

Offer• Price Point• Premiums• Message• Benefits

Channel• Direct Mail• Telemarketing• Web• Email • Face to Face• DRTV

Audience• List Selection• Key Demographics

Retention is closely linked to three core elements of new donor acquisition…

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Case Studies: Evaluating and Structuring

Acquisition Programs with an Eye on Retention

CHANNEL

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Channelxxx

Background: NPCA’s large and robust acquisition program encompasses multiple channels. While direct mail is dominant by volume, analysis has shown that joins from the web and email are very valuable and show stronger long-term value metrics.

After five years, web and email

joins’ retention is notably higher

than direct mail joins.

Year 1 Year 2 Year 3 Year 4 Year 510%

15%

20%

25%

30%

35%

23.4%22.1%

18.6%15.3% 14.0%

26.2% 27.9%

23.4% 19.7%19.6%

28.4%

30.5%

24.9%22.1% 22.2%

Direct Mail Joins Web Joins Email Joins

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#Bridge15

Email joins have the highest donor value, although direct mail joins have been increasing in value over time.

Channelxxx

Direct Mail Web Email

$81

$152

5 Year Donor Value

$43

• Donor value is nearly doubled for web joins and tripled for email joins.• Yet, low response rates and universe limitations restrict the growth of web and

email joins.

Channelxxx

Email and web joins are now 7%

of new joins compared to 2.5%

in 2009.

FY09 FY10 FY11 FY12 FY13 FY14

DM New Joins Web Joins Email Joins TM Joins

• Knowing the value and retention of new joins by channel, NPCA has allocated resources to growing web and email joins, while simultaneously working to increase the value of direct mail joins.

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Channel

Background: For WWF, all acquisition channels are tracked with the same metrics, and all compete on equal ground for investment dollars.

• Direct mail acquisition• Reinstates• Direct Response TV• Online activities (banner ads, Change.org, Google, etc.) • DRTV – the cost to acquire a monthly member is 7 times greater than a direct mail

donor, but the LTV of the donor is much higher and the net LTV is much higher.

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Channelxxx

Background: An environmental organization acquired a significant number of members through a face to face canvassing program. While the volume of acquisition joins increased at the peak of the program, revenue and overall file size remained flat.

Canvass joins were the

dominant channel of acquisition

from FY06-FY09.

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Channel

Analysis by channel indicated that retention over five years varied dramatically by channel, with canvass joins far underperforming other direct marketing channels.

Year 1 Year 2 Year 3 Year 4 Year 5

28.8%

20.9%

6.9% 7.0%

23.2%

13.6%

DM Joins Canvass Joins Web Joins

With this information among other factors, the organization cancelled the program and

shifted funds to more productive

channels.

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AUDIENCE

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Audience – List Analysis

• Utilize individual List Return on Investment metrics. • Don’t be fooled by upfront performance!

List 1List 2List 3List 4List 5List 6List 7List 8List 9

List 10List 11List 12List 13List 14List 15List 16List 17List 18List 19List 20List 21List 22List 23List 24List 25List 26

-100% 0% 100% 200% 300% 400% 500%

Gross Return on Investment at 3 Years

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% retained

Audience – Warm Prospects

• Look for opportunities to analyze and include in-house lists (e.g., activists, visitors, etc.). In many situations, these pre-qualified lists show higher retention and value over time.

• For NPCA, acquiring members who are also activists leads to stronger retention when compared to those not additionally qualified by activism.

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Activ

ists

Non

-Acti

vist

s

Members Lapsed Members Deep Lapsed Members

WWF Direct mail acquisition:• Work closely with list broker.• Share updated present value by list and list select quarterly.• Along with standard metrics, every list plan incorporates a Present Value Calculation.

Goal: Mail lists that have positive “Total Present Value/Gross Cost ratio” of one or greater.

Example:

List Cost/ Donor (PL) Subs Rev/Donor

Blended Net Cost/Donor Total Blend Net

Gross Cost Per Donor

Total Present Value/Donor

Total PV/Gross

Cost

List A ($37.24) $ 82.28 $ 45.04 $ 0.35 $104.05 $149.09 1.43

List B($15.87) $ 33.28 $ 17.41 $ 0.03 $43.72 $61.13 1.40

Audience – List Analysis

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Audience – List Analysis

xxxProspecting Database Case Study – Targeting Your Audience for Long-Term Value

• In March of 2014, WWF teamed with Infogroup to create a Prospecting Database

• Only worthwhile if you mail 10,000,000 pieces or more a year

• Benefits:

• Select high value names from the Prospect Database

• Post-merge model outside lists, and drop names that are not high value with better projected retention

• Review records regardless of list, and assign packages and ask strings at a record level

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Retention Year 1 Retention Year 2 Retention Year 3 Retention Year 4 Retention Year 5 Retention Year 6 Retention Year 70.0%

0.5%

1.0%

1.5%

2.0%

2.5%

Increase of Female Retention over Male

Audience – Demographics

• Identify demographics that indicate a high-retaining donor.• Use these attributes to target your universe.• For WWF, female donors equate to higher retention.• WWF’s file is 74% female. After 7 years, females retain 1.8% better than

males.

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WWF uses this information for

list qualification, selection, and

enhanced targeting in acquisition.

1 < 35 35 < 45 45 < 55 55 < 60 60 < 65 65 < 75 75 < 85 85+

Retention Year 1 Retention Year 7

Audience – Demographics

• Similarly, for WWF (and many organizations), age matters.• Up to a point, the older the donor, the stronger the retention.• For WWF, 65-75 year olds retain best.• Invest your acquisition dollars to get the members who will pay back

more over time.

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Audience – List Analysis

• Test and analyze co-op modeled lists as part of your acquisition audience.• For many organizations, co-op lists generate high retaining and high LTV members when

compared to outside lists.• There are vast differences between co-ops – assess both short-term and long-term

performance to determine the most productive universe.

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Co-op #1

Co-op #2

Co-op #3

Co-op #4

Non-Coop (Outside Lists)

Co-op #5

Co-op #6

-60% -40% -20% 0% 20% 40% 60%

46%

15%

13%

-3%

-11%

-22%

-39%

GROI Year 1

Audience – Warm Prospects

• Maximize your lapsed universe as a priority over outside lists.• For most organizations, the long-term donor value of lapsed re-acquired names far

exceeds new joins.

<$10

$10-14

$15-19

$20-24

$25-49

$50-99

$0 $20 $40 $60 $80 $100 $120 $140 $160

New Join Re-Acquired24

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OFFER

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Offer – Price Pointxxx

Background: The National Parks Conservation Association acquired most donors through their acquisition program with a $15 starting ask. Donor-level analysis showed a clear correlation between a lower first gift and reduced five year retention.

Five year retention

increases by 35% for new joins at the $25 first gift.

Year 5

5.5%

8.7%10.5%

13.4%

18.1%

22.9%

27.3%

$1-9 $10-14 $15-19 $20-24 $25-49 $50-99 $100+

+35%

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Offer – Price Point

-34%

-26%

$15 Ask

$25 Ask

ROI after 1 year

Because a higher ask string typically equals fewer donors and potentially less revenue, NPCA tested the control $15 ask against a $25 ask string.

At the end of one year, retained members were virtually the same in quantity, and net revenue and ROI favored the $25 ask, allowing NPCA to ramp up the strategy.

Initial joins andretained members after 1 year

$15 Ask $25 Ask

2381

2019

560 546

Initial joins

Retained

Initial joins

Retained

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Offer – Premiumxxx

Background: NPCA has historically acquired donors with a premium at the $15 level. In 2012, the organization conducted a test of a package with no premium to assess if the long-term value and retention offset the initial higher response rate.

Response Rate

0.90%

0.67%Premium

No Pre-mium

Initial response rate was 34% higher for the

premium package.

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Year 2 Retention

19.7%24.3%

No Pre-miumPremium

Offer – Premium

• After two years, retention was 23% higher for the No Premium package.• However, the initial volume of donors acquired with a premium was enough to

offset stronger LTV metrics from the no-premium group, leaving Year 1 net revenue virtually tied, and Year 2 strongly favoring the Premium joins.

4% higher for Premium joins 114% higher for Premium joins

PremiumNo Premium

Year 1Net Revenue

Year 2Net Revenue

While retention is a key part of the equation, other elements must also be considered in decision making.

$0

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As with NPCA, WWF analysis has shown that higher initial gifts equate to higher retention.• Donors who join at $100 or more retain best, but there are not many of those!• Sweet spot: The sweet spot is $33 or above, and that group has lifetime revenue 3 times over other joins.

Offer – Price Point

Goal: Increase those who join over the

premium awarding ask amount. Donors who choose to give more

than the premium price point retain better.< $16

$16

$17 <= $26

$26 <= $52

$52 <= $100

$100+

-5.0% 0.0% 5.0% 10.0% 15.0% 20.0% 25.0% 30.0%

Retention differences by first gift amount (<$16 baseline)

Retention Year 7 Retention Year 1

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Retention Year 1 Retention Year 2 Retention Year 3 Retention Year 4 Retention Year 5 Retention Year 65.0%

10.0%

15.0%

20.0%

25.0%

30.0%

35.0%

13.9%14.8%

9.4%

One Premium No Premium Maximum Number of Premiums (21)

• WWF analysis has shown that receiving a high number of premiums, and also certain “killer” join premiums, equates to a lower retention rate as it impacts the type of member acquired.

• Members are tracked by join premium and retention over time.• Over 7 years, people who joined and opted out of the premium retained the best.• Those who received the maximum number of premiums over time showed the weakest

retention.

Offer – Premium

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Offer – Messagexxx

Background: A performing arts organization sees ebbs and flows in new member acquisition directly related to ticket sales to popular performances. There is a clear relationship between spikes in acquisition in a popular performance year and declines in retention the following year.

FY13 = popular performance

drives new joins to record highs.

FY12 FY13 FY140

1,0002,0003,0004,0005,0006,0007,0008,0009,000

DM Joins TM Joins Web Joins Email Joins

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Offer – Messagexxx

• Popular performance = retention spikes in 2013.• New joins triggered by popular performance retain at weaker rates the following year.• Recognizing this trend and increasing efforts to retain those offer-inspired joins is

key, although challenging.

FY12 FY13 FY1420%

30%

40%

50%

60%

70%

51.7% 51.9%

64.4%66.0%

29.8%25.8%

Overall Multi-Year First-Year

Overall, multi-year, and first-year retention over a three year period.

Large event

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Offer – Messagexxx

Background: A conservation organization focused acquisition aggressively on an urgent single-issue, single-species topic. While new joins increased, subsequent retention of those joins was weak as later messaging covered a variety of topics and species.

Year 1 Retention Year 2 Retention0%5%

10%15%20%25%30%35%40%

Historical AverageSpecies Specific Package, Sample Year 1Species Specific Package, Sample Year 2

• Species-specific package shows weaker retention compared to historical averages.• Organization tested into a broader-focused package to increase long-term value,

retention and revenue.

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Analysis

Understand the impact by channel and the appropriate channel usage

Test and measure retention by offer: message, price point, events, benefits or other key variables.

Understand and utilize key demographics and donor attributes to target your audience

Monitor improvement of key metrics on an ongoing basis

In summary:Maximizing retention in acquisition…

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Questions?

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Laura ConnorsDeputy Vice President for Membership National Parks Conservation Association

lconnors@npca.org

Sharon DreyfussManager - Direct Response and Acquisition

World Wildlife Fundsharon.dreyfuss@WWFUS.org

Kerri KerrSenior Vice President

Avalon Consulting Groupkerrik@avalonconsulting.net

Thank You!