5 Data Points That Can Change Everything
April 14, 2015 Patrick Sullivan
Big Data and regression models can chop and analyze a donor file in lots of interesting ways. But if you don’t have millions of dollars or millions of names in your file to utilize these technologies, you’ll have to look elsewhere for measurement.
“These are the tried and true: first gift amount; offer or product responsiveness; mission affinity and relationships; multi-channel, multi-action; and, demographics,” said Lisa Smith, senior vice president of data insights and integration at Pasadena, Calif., agency Russ Reid. She, Diane Clifford and Mary Beth McIntyre showed attendees of DMA Nonprofit Federation 2015 Washington Nonprofit Conference just where to look.
Clifford said her organization, the National Audubon Society in New York City, compared first gift to five-year value by acquisition channel. It found that donors acquired through their customer service help line had a first gift nearly three times the average across channels, and five-year value was off the charts, $489 compared to $79.
The analysis, said Clifford, “helped make the case to transition to a new vendor” that was more expensive but that the organization x felt could produce even better results.
For the second data point, “When we think ‘offer,’ we’re thinking at the program level. An animal welfare organization might be marketing to pet owners but probably also needs to save the whales. There might be crossover but it’s a different audience,” said Smith. “Product” is a premium.
One of Smith’s clients is a national social services organization, “a heavily premium mailer,” she said. The organization was testing its label control on lapsed donors. Managers decided to segment the list based on former calendar responders. The calendar was sent to some of the calendar responders, the label to non-responders and the label to a subset of calendar responders.
When we fine-tuned the audience, we saw that the calendar generated double the income,” said Smith. “Calendar people like calendars. If that’s a vehicle in your arsenal, think about how to use it wisely.”
For another organization that utilizes a calendar, “they used that same thinking: There’s people who like the calendar so send it to them, and the people who haven’t responded to them probably don’t,” said Smith. The organization segmented for product non-responders with a calendar and a freemium that cost half the price to produce. The freemium generated nearly $4,000 more revenue. “They were telling us, basically, ‘I’m not interested in stuff,’” said Smith.
The remaining points, said McIntyre, principal at Win-Win Giving, “are more about the donor’s relationship with the organization.” The next data point the panelists examined was mission affinity and relationships.
“There’s value in self-reported data,” said McIntyre. An international animal welfare organization asks donors if they have pets. The pet owners give an average of 3.65 gifts and their retention rate is 55 percent, compared to non-pet owners, who give an average of 2.57 gifts and retain at 38 percent. “The pet ownership (segment) had more gifts, a better retention rate and a higher lift in retention when focusing on this segment,” said McIntyre.
The trick to mission affinity metrics is that they’re often on other databases than the donor management system. For another of McIntyre’s clients, it was found that donors who participate in a mission event or activity have additional value in direct marketing — a 15 percentage point higher retention rate and 91 percent more direct mail revenue per donor. But, information on event attendance resided elsewhere in the organization. “You’ve got to get others to share that data,” said McIntyre.
Donors who take more than one action, such as donating and volunteering, are telling you they care about your organization. Multichannel, multi-actions are related to be separate from the mission affinity data points. One of Smith’s clients saw a 32-percent lift in retention and a 135-percent lift in revenue per donor when the donor also takes an advocacy action. Similarly, donors who give through two or more channels have a 53 percent better retention rate and 58 percent more revenue per donor for one of McIntyre’s clients, a United Kingdom-based animal welfare organization.
“Multi-engagements equal enhanced lifetime value,” said McIntyre. “Set your priorities and tactics to move donors and prospects across channels.”
Finally, segmenting based on demographics can be useful for direct mail and not just planned giving and major gifts. But, resist focusing on messaging. “That could be a rabbit hole. Focus on segmentation,” said Smith.
A regional social services organization has a list that’s 38 percent male. The men give as frequently as the women but at a higher gift amount. Instead of worrying about the messaging, Smith recommended her client test higher gift arrays with male prospects. “Some lists might perform marginally in aggregate but might perform better if selected for gender,” she said.
Age can be another good segment, particularly if combined with the other accessible data points. An environmental organization found that 45 to 54-year-olds had the highest three-year value of any age segmentation, even though the organization’s file is more than 50 percent older than 65.
“The people who are the most valuable, giving and doing the most, are around age 50,” said Smith. “You’ve reached an age where you have more disposable income and you’re thinking about your legacy, but you’re still active.” Try to reach out to this demographic with event and volunteer offers. “Engagement opportunities vary by age,” said Smith. “Use age as a filter for channels other than planned giving.”