Lessons for nonprofit organisations to consider

Many Australians shopped for new health insurance before 1 April when rates for most of us increased. When I received a notification from my insurer of my rate increase, I immediately called iSelect to seek a less expensive plan. I had bought my existing plan via iSelect and decided to start with this consolidator to find an alternative plan. The call was a success.

iSelect informed me of a less expensive plan, plus a plan with more coverage. It was a 20-minute call, which saved me ~$40 a month and brought me greater benefits.

About three weeks later I received a call from my outgoing insurer asking me why I was “leaving” their plan. When I explained it was due to cost, the caller said “why didn’t you give us a chance to find you a cheaper plan and alternative benefits?” I suggested customer retention was the job of the insurer, not the customer. I also suggested if there were alternate plans, which were cheaper and more beneficial, the insurer should send those alternatives out to the customer rather than simply send a rate increase letter. The caller suggested I had good points and ideas.

The call from this insurer suggests to me missed opportunities all around. Additionally, the call offers some lessons to be learned by the non-profit sector and retention of donors. The following are obvious lessons to me:

1. Rather than give donors (in my case customers) a reason to “shop around” or go to another charity, work hard to retain the donor.
2. Offer donors a menu of choices rather than restrict them to one option.
3. The donor (customer) is likely to not call you to seek alternative ways to stick with you.
4. Show donor appreciation before it is too late. Retaining a donor is less costly than acquiring a new donor.

Recognising donor and brand loyalty is critical. Once the donor is gone, it is often very difficult to gain the donor back.