Performance Fundraising - Using Analytics and Insights-Driven Strategy to Grow Fundraising

MODULE 1USING ANALYTICS AND INSIGHTS-DRIVEN STRATEGY

© 2014 Merkle. All Rights Reserved. Confidential2

What Is the Biggest Challenge Faced by Your Direct Mail Program?

CHALLENGE ACCEPTED.


Four Big Questions

Who is the audience?

What is the offer?

When do you engage?

Where do you engage?

4 big questions


Who: Targeting Acquisition in Direct Mail

Tapping into your Lapsed Pool1.

Focusing on donor value in your Cold Acquisition2.

Cutting costs where they add no value3.


FY 2013 FY 2014 FY 2015 P

-$4M

-$3.5M

-$3M

-$2.5M

-$2M

-$1.5M

-$1M

-$.5M

$M

-$3,684,605

-$2,537,213

-$1,319,865

Acquisition Net Revenue

Arthritis Foundation: Increasing Net by over $2 million

FY 2013 FY 2014 FY 20150%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

Quantity MixCold Lapsed

$1.1M

$1.2M

Strategic shift towards Acquisition Net RevenueDriven by change in mix – more lapsed and fewer cold


Enhanced Lapsed Model Increases Efficiency

Former Co Op Model New Model$0

$5

$10

$15

$20

$25

$30

$15

$28

Average Gift

83%

Former Co Op Model New Model

$M

$M

$M

-$48

-$32

First Year Net Revenue per Donor

$16

Testing Results

Average gift increased by 83%

Response rate increased by 4%

Net Revenue per donor increased by $16


Increasing Average Gift Opens Up Lapsed Pool

Increasing average gift allows us to acquire more deeply into the lapsed donor pool at the same CPDR.

This leverages a bigger portion of the increasing lapsed donor pool.

Example

25.00

$30.00

PreviousAvg Gift = $15

NewAvg Gift = $28

$40.00

Cost/donor

Incremental donorsreactivated at same cpdr

Current Limit($1.50 cpdr)

New Limit ($1.50 cpdr)

$35.00


Just Getting By segment represents a high % of donors (18%) but delivers a proportionally small % of revenue (8%).

Young at Heart represent a small

% of donors (13%) but delivers a

proportionally large % of revenue

(20%).

13%

14%

24%13%

18%

18%

24%

12%

16%

20%

20%

8%

Benevolent Boomers Golden Oldies Traditional Retirees

Young at Heart Modern Middle Class Just Getting By

AHA Utilizes Segmentation to Make List Buys

Young at Heart

Online PG

Avg age 73, college educated, nice home, travels & invests

13%Active Donors

Value

LOW

VA

LUE

Just Getting By

Value Online PG

Avg age 61, HS Educated, kids, lower income, modest home

18%Active Donors

HIG

H V

ALU

E

DM acquisition decisions that redirect investment from low to high(er) value segments.


AHA: Identifies $1.3 Million In Net In Cold Acquisition

Tier 1/2 Tier 3/4 Top Segments

Tier 3/4 Bottom Segments

$0.00

$0.04

$0.08

$0.12

$0.16

0.00%

0.20%

0.40%

0.60%

0.80%

1.00%

Performance by GIPN and Response RateGIPN RR%

Tactical Approach

Lowest Performing lists ordered by segments

Dropped low value segments

Redirect savings into higher performing

segments


“Value” Segments Instead of Demographic Segments

Value Segment

Email response likelihood

Expected average gift Online giving propensity

Retention likelihood Large donor propensity

AHA needed a way to identify highest value donors in cold acquisition

Define Value• Most focus on expected value this year within DM

• Best practice looks at expected value over time within SM

• AHA focused on expected value over time to the Entire Association

Build Value Driven Segments• Five separate models focused on value levers

• Intersection of these models creates Segments

1 2


Watch the full presentation in Merkle’s

Donor-Centric Fundraising: Challenges, Opportunities & Digital

Integration on-demand webinar series.

Chris PritcherVice President, Analytics, Nonprofit

Merkle

http://bit.ly/1REzZ51




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Performance Fundraising - Using Analytics and Insights-Driven Strategy to Grow Fundraising