The concept of Donor Lifetime Value isn't new to advancement offices—an alumna doesn't give just once to her alma mater; she gives many times over the course of her life. Even some alumni relations offices think about Alumni Lifetime Value.
But it's rare that either office invest in that lifetime value.
We all invest in relationships with our alumni and donors, sure. Nobody forgets to send a thank-you card or make a call to express gratitude to a volunteer.
But when we do that, we leave out something important: We're just investing in our relationship with our alumni, not empowering the alumni themselves. We get so focused on donor retention that we lose sight of the donors.
Awards, notes, and gifts can help make alumni feel appreciated. But introductions, hires, and mentorship make them more capable of giving back. (And who doesn't like to know their alma mater is there to help them?)
As Michael Schrage, Research Fellow at the MIT Sloan School of Management, writes this month in the Harvard Business Review,
While delighting customers and meeting their needs remain important, they’re not enough for a lifetime. Innovation must be seen as an investment in the human capital and capabilities of customers.
In other words, If we want to get the most out of our relationships with our alumni communities, we need to empower the communities themselves.
The stronger and more capable our alumni, the more frequently, deeply, and variously they can help our institutions. If we, say, help an alumnus land a job by connecting him with an alumna who works at his dream company, then we not only earn his gratitude, we increase his capacity to give back—his lifetime value. William '10 of Oberlin, for example, was able to land a job at the EPA thanks to the help of his fellow alumni and facilitation of his alma mater:
Now William gives advice to and helps other alumni, giving back to his alma mater with his time and talent. And he is grateful to Oberlin for making the connection, to boot.
An alumna whose alma mater helps her meet her professional and personal needs is an empowered alumna. And empowered alumni are more willing and able to offer their time, talent, and treasure in return.
Again, Michael Schrage:
By investing in and enabling new customer capabilities, firms create new ways for customers to increase their lifetime value. Making customers better truly does make for better customers.
Examples in the private sector of this approach to lifetime value are common. The payment processing company Square offers loans to its customers to help them grow their business—and Square's revenue. Nike's free Training Club app helps people refine their exercise techniques and develop fitness plans. YouTube offers free production facilities, equipment, and software to people whose channels have over 10,000 subscribers.
These companies, and thousands more, invest in their customers because they know making customers better makes for better customers.
And making alumni better makes for better alumni.
Switchboard's alumni networking platform helps dozens of schools, including Williams, Bowdoin, and William & Mary, invest in their alumni lifetime value. Find out how.