Frequency, the second member of the trinity of Direct Marketing – Recency, Frequency, and Monetary (RFM) analysis, plays an important role in the development of a strong marketing database.

Frequency refers to the number of times a donor makes contributions. It’s important to understand the patterns of donor frequency within your database because frequency is one of the great predictors of future behaviour: the more often a donor gives, the more likely they are to give again.

You can look at donor frequency in several ways – within a single year, or over several years. Let’s start by examining the importance of understanding donor frequency patterns within a single year.

A number of charities and not-for-profits run multiple campaigns each year. For example, your organization might hold an annual membership renewal where the objective is to get as many existing members as possible to renew their memberships. In addition, you might have a special “Research Request”, a “Back to School appeal”, and a “Christmas Drive”. And while not all of your donors will give to each appeal, a number will contribute to more than one.

How can we increase the contributions/donor/year?

Look at how donors are responding within your database by performing some analysis. First, how many people contributed last year, and how many separate contributions did they make? (For purposes of this analysis, you should regard multiple payments on the same gift as one gift – for example, your donor might make twelve payments through Pre-Authorized Chequing, but in reality it’s one gift for the year).

You might have had 1,000 donors last year, who made a total of 1,200 separate donations. Expressed another way, each donor contributed 1.2 times. You now have a benchmark which you can use to project future revenues, and as a reference point in your goalsetting process. You might set a challenge for your fundraising campaign such as “what can we do to increase the average number of contributions to 1.3 or 1.4 per donor per year?”.

We can also look at donor frequency over an extended period. Once you add the dimension of a longer time period, you’ll find that you are in fact measuring donor loyalty.

To start this analysis, call up the records of all donors who made a gift a few years ago, then determine how many there are, and how many gifts they have made in total. For example, perhaps your organization has 500 donors who contributed five years ago. They have made a total of 1,875 gifts, or 3.75 gifts over the entire five-year period, or 0.75 gifts per year, a figure which will also be affected by attrition. Again, you have a benchmark you can use as a challenge within your goalsetting process.

Where are we vulnerable?

You can use this information to learn some fascinating trends within your campaign – such as the most prospective areas for growth … and the Achilles’ heel – the most vulnerable elements in your marketing campaign. One approach is to examine this information by gift range, and compare one range’s performance against another. For example, compare the results of your $1 to $25 contributors to your $100 + contributors. Which group gives more often? Which shows the greatest loyalty?

By studying the donor frequency patterns within your database, you can create a starting point for your next campaign. Challenge your campaign by asking, “How can we boost the performance of this segment or that segment?”, or “How can we encourage a strongly performing group of donors to do even better?”.

It makes perfect sense that donors who give frequently are more likely to give again. After all, if someone has given five times in five years, there is a stronger likelihood that they will give a sixth gift in year six, than there is from someone who has given only once in the same period. Donor frequency is the litmus test of the level of donor loyalty your organization enjoys.

Tony Lovell is President of Lovell & Company Inc, a company helping its clients achieve exceptional results through effective Direct Marketing programs. His company assesses programs, develops strategy, and provides a full range of creative and production services. He can be reached by calling (416) 763-7173.