Big Data – Big ROI

Big Data – Big ROICathy Finney

Deputy Vice President, Strategic Services The Wilderness Society

Chuck PruittCo-managing Director, AB Data

Kevin Moran Principal, Integral

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Session Objectives

1. Learn how to put together a strong case to leadership for growth.

2. Understand how to monitor your acquisition progress.

3. Understand how different approaches impact your return on investment.

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The state of the world today …

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2012 Fundraising Effectiveness Survey Report—done by the Association of Fundraising Professionals and the Urban Institute—found that the “net gain in giving” for charities in 2011 was $0.

That is, for every $100 a nonprofit gained in 2011 from new donors, higher giving from current donors and the return of former donors, it lost $100 through lower gifts from current donors and the loss of donors who gave in 2010 but not in 2011.

Where we are …

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• For every 100 new and returning donors added to an organization in 2011, –107 departed

• “net gain in donors” of -7.

Why are we treading water?

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PRESSURE!!

1. Economic turbulence2. Reduce – or even keep flat – your expense budget year after

year.3. Bring in all your money online. 4. Expand beyond your core constituency (younger, other

demographics, etc.)5. Declining acquisition results.6. Shrinking list universe. 7. Competing priorities – (advocacy vs fundraising)8. Increased scrutiny from watchdog groups9. Increased competition.

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“Why don’t you just save the money you propose investing in new donor acquisition and focus on the donors we have already?”

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As Roger Craver put it: “At a time when the media and watchdogs are focused on the high costs of fundraising, particularly acquisition, we all need to get much better at explaining the increasingly expensive but essential acquisition process. The alternative is to leave donors turned off, anxious and angry.”

The Challenge …

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The Wilderness Society

• Over the last 4 years, we’ve faced a 22% decrease in investment in acquisition … membership has dropped 17%

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The Wilderness Society

To further complicate matters:

• We know that in the past, we hadn’t been breaking even on acquisition for at least 24 months

• Over the last fiscal year, our control package has been in steep decline.

There was a real need to begin to shift our approach from short-term gain to long-term investment.

The solutions we sought relied both on DATA and CREATIVE.

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The Data

Developing a smart, data-driven strategy focusing on ROI and monitoring performance to this standard.

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The Standard Measures

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Quickly Understanding Investment Dynamics

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Are Your Investments Right?

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Is This Program Growing Smart?

$20.96 $21.50 $22.13 $22.42

$23.86$26.28

$32.76$33.17

$0

$5

$10

$15

$20

$25

$30

$35

2010 2011 2012 2013

CPD & Subsequent Value - OutsideLists

Sub Val 24

Sub Val 18

Sub Val 12

Sub Val 6

AG

CPD

As they grow, costs increased initial metrics suggested they would not be able to grow and stay within a 12 month ROI

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What are the Right Measures of Success

Investments focused on acquiring quality as they grew and long-term metrics became the primary investment drivers. They reduced the percentage of donors that will never break even.

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And the program is getting stronger

Retention, Conversion, Second gift timing, value metrics etc. (whatever is important for you). These data points provide immediate insight into forecasting short and long term and help monitor investments

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Now Compare to Other Channels to Determine the Value of Each

JoinSourceId AG CPD VPD6 VPD12 Act12 NPD 12Offline Direct Response $22.17 $33.17 $32.91 $42.22 36.85% 9.05$ Offline Total $22.17 $38.74 $32.91 $42.22 36.85% 3.48$ Online Email Conversion $64.89 $8.28 $82.63 $93.24 37.64% 84.96$

Website $84.11 $0.00 $115.65 $143.22 23.25% 143.22$ Online Advertising $66.99 $131.00 $92.66 $121.36 13.48% (9.64)$ Social Media $109.45 $157.68 $146.19 $163.83 18.39% 6.15$ Acquired Email $37.17 $168.86 $53.48 $74.85 27.29% (94.01)$

Online Total $75.42 $15.02 $162.25 $177.88 24.37% $162.86Grand Total $29.28 $35.57 $38.79 $65.92 33.88% $30.35

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Build Your Media Investment Map

Media Investment Map Direct Marketing

Module

1-Time

Acquisition

Major Gifts

Planned Gifts

Web

Online Ads

New Initiatives

Monthly

Conversion

Online Ads

Web

Increased Investments

Online ads

DRTV

Direct Mail

Face to face

Web

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Where to Begin

1.“Begin with end in mind”2.What are your measures of success?3.Lagging, Current, Leading, Strategic4.Don’t Chase Metrics – Shape Them5.What Drives Value for YOU6.Forget Big Data – Think Smart Data7.Compare Channels8.Communicate, Communicate, Communicate9.Embrace Inefficiency – but move fast

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Building the Investment Map

Step 1

• Begin with End in Mind• Understand the

your value driving metrics.

• Identify your lagging, current, leading, strategic.

• Incorporate these into today’s strategies.

Step 2

• Shape your Metrics don’t chase them• Compare the

channels.• Paint your

media investment map.

• Embrace the inefficiencies, but move fast.

Step 3

• Communicate• Communicate to

the Senior Management

• Communicate to your partners

• Communicate to your team.

• Monitor your measurements against multiple growth scenarios.

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Creative Approaches to Improve Acquisition Performance and ROI

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The Creative:

Different creative approaches – both in messaging and production – and the kind of new donor acquisition you engage in – both by channel and message – will significantly affect your return on investment.

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Keeping Your Promise to the Bosses

• Understand ROI

• Smart, Data-Driven Investment Strategy that is: Transparent Carefully and Continually Monitored Constantly Adjusted

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Creative Approaches to Improve Acquisition Performance and ROI

• Strategies to Shorten ROI

• Strategies to Reduce Initial Investment

Big Data / Big ROI: A Case Study

It’s More Than a Body Count:Changing the Mix to Improve ROI

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Big Data / Big ROI: A Case Study

FY10 FY11 FY12

$36.47 $38.37

$45.58

FY10 FY11 FY12

$111.04 $113.01

$126.85

Value Per Acquisition Joins in their 1st Year Value Per Member of the Overall Donor File

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Big Data / Big ROI: A Case StudyObama for America

Big Data and Big ROI on Steroids…

• State-of-the-Art Micro-Targeting for Potential Donors

• Multi-Channel Integration to Improve ROI

• Cutting-Edge Donor File Segmentation

• Creative Strategies to Reduce Initial Investment

Authentic Voices

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The Internet is Change the Direct Mail Experience: Multi-Channel Marketing

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Breaking Your Bond with #10 Envelope

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The Wilderness Society

Old Strategy• Focus was on short-term metrics• Key goal was quantity not quality

New Strategy• Balance short and long term metrics – ROI, retention• Quality then quantity• ROI is the primary measure of success• More donors joining over $20

• Testing new creative approaches• Moving toward a balance of non-premium and premium offers• Trying to provide some channel balance

Additional half-million investment in acquisition has been approved for FY14.

Thank you

Don’t forget to visit the Solutions Showcase!

Many of the ideas discussed today are on display at the Solutions Showcase!

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Cathy Finney – Deputy Vice President, Strategic Servicescathy_finney@tws.org

Chuck Pruitt – Co-Managing Director of the A.B. Data GroupChuck_pruitt@abdata.com.

Kevin Moran – Principal, Integral, LLCKevin@integral-dc.com