segmentation and personalisation final iwrm bangalore 2009

Presented by Sean Triner

Segmentation and personalisation

What we’ll cover today

1. Types of data to fuel growth

2. Segmenting and targeting your next fundraising campaign

3. The power of personalisation – The Lost Dogs’ Home Case Study

1. Types of data to fuel growth

ANALYTICALYour Growth

Your donor behaviourENVIRONMENTALHow much is given

GrowthCompetition

PERSONALTransactions

Bequest statusPet name

Motivations

Types of data

Technical Data• used

Strategic Data• informs

environmental data

Mystery Shopping

Benchmarking

• Understand trends - scan industry and body reports

• Look at others - mystery shop

• Don’t have to be formally involved in benchmarking studies

• But, sharing for the greater good helps

Using environmental data

analytical data

Gross Income By Calendar Year 1992-2008 - All

$2,000,000

$4,000,000

$6,000,000

$8,000,000

$10,000,000

$12,000,000

$14,000,000

$16,000,000

$18,000,000

1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008

Bequest Cash Community Corporate Event Gift In Kind Grants/TrustsIn Memoriam Merchandise Other Regular Gift Capital Campaign In Celebration Event Merchandise

Where your money comes from

New Recruits By Year - All

13,243

6,0786,627

7,734 7,918

10,000

12,000

14,000

1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008

Number of donors recruited

Direct Mail Face to Face Phone Phone Face to Face Phone

Cash Lottery Regular Gift

Value to Date by Gift and Channel

Ave Year1 Inc Ave Year2 Inc Ave Year3 Inc Ave Year4 Inc

Value to date by donor type

YearRetained Donors Income

Retained %

Retained Donors Income

Retained %

Retained Donors Income

Retained %

2003 2,413 $285,664 75.8% 1,209 $58,668 53.4% 34,206 $1,253,913 42.0%2004 2,537 $300,404 71.7% 7,608 $383,625 45.4% 33,203 $1,220,102 40.7%2005 2,558 $294,457 66.4% 8,973 $407,627 50.1% 29,862 $1,157,286 41.9%2006 2,882 $335,475 67.4% 8,619 $430,831 48.0% 27,883 $1,138,266 45.9%2007 3,173 $361,419 59.1% 15,871 $899,425 53.6% 22,599 $692,119 32.1%2008 4,127 $465,254 25.2% 17,243 $923,565 45.3% 28,240 $1,587,719 59.4%

DM Cash Donors Phone Cash Donors Lottery Players

Retention Rates

personal data

Appeal letter

Dear Tania

Thank you for continued support of the Lost Dogs’ Home and especially for completing our recent survey.

As winter approaches it saddens me to think of the thousands of kittens that unlike Chi Cha and Zer Zac will need rescuing from the streets by our trained staff…

Benchmarking

2. Segmenting and targeting

Prospect or donor?

1 4 7 10 13 16 19 22 25 28 31 34 37 40 43 46 49 52 55 58 61 64 67 70 73 76 79 82 85 88 91 94 97 100

Recency Frequency Value

0-12 months >1 A $10,000+

13-24 1 B $5,000 - $9,999.99

25-36 C $2,500 - $4,999.99

37-48 D $1,000 - $2,499.99

49-60 E $500 - $999.99

61-72 F $250 - $499.99

73-84 G $100 - $249.99

85+ H <$100

Using RFV

Segment # mailed # Resp % Resp Gross Net<=12 12,283 2,142 17.40% $149,008 $127,02213-24 3,905 285 7.30% $14,763 $7,77325-36 2,629 101 3.80% $6,328 $1,62237-48 1,055 32 3.00% $1,990 $10249-60 1,355 46 3.40% $2,640 $21561-84 1,166 42 3.60% $2,028 $2984+ 777 11 1.40% $1,650 $259

This illustrates the importance of recency in determining whether a donor will respond or not

Why is recency important?

Segment # mailed # Resp % Resp Gross Net

Single 7,930 633 7.98% $58,719 $43,246

Multi 15,240 2,282 14.97% $132,118 $107,021

Donors who have made more than one gift have a much higher propensity to give again

Why is frequency important?

The importance of value is not in the response rate but in the income generated

Why is value important?

Value of Highest Gift ever Mailed Response Gross Ginc/'000 Av Gift

F <$10 584 22 3.80% $334 $572 $15

E $10-$24.99 1,860 137 7.40% $3,054 $1,642 $22

D $25-$49.99 1,308 129 9.90% $4,504 $3,443 $35

C $50-$99.99 1,667 154 9.20% $9,851 $5,909 $64

B $100-$249.99 1,588 134 8.40% $18,233 $11,482 $136

A $250+ 909 38 4.20% $19,711 $21,684 $519

Grand Total 7,916 614 7.80% $55,687 $7,035 $91

Decile Cumulative Gross Income Count Cumulative

Count % of Donors Cumulative % of Donors

1 $ 6,854,383 45 45 0.0% 0.0%

2 $ 13,708,765 292 337 0.2% 0.3%

3 $ 20,563,148 716 1,053 0.6% 0.9%

4 $ 27,417,531 1,291 2,344 1.1% 1.9%

5 $ 34,271,913 2,171 4,515 1.8% 3.7%

6 $ 41,126,296 3,557 8,072 2.9% 6.6%

7 $ 47,980,679 5,712 13,784 4.7% 11.2%

8 $ 54,835,061 10,018 23,802 8.2% 19.4%

9 $ 61,689,444 19,807 43,609 16.1% 35.5%

10 $ 68,543,827 79,193 122,802 64.5% 100.0%

122,802 122,802 100.0% 100.0%

Pareto Principle – focusing where it matters

• RFV drives your warm/house program

• Be smart, dig deep

• Focus on value, not cost

• Find out where you can have the biggest impact

Using analytical data

Other Segmentation Possibilities

Payment type

Past campaign responses

Gender

Type of credit card

Expressed wish

Using personal data

Find out who your donors are

Using the data

Using the data, donor type

Using the data, area

Use transactional history

• Survey, survey, survey

• Ask the questions, capture the answers, use the data

• Use transactional history to help drive response and gift levels

Using personal data

A case study: The Lost Dogs’ Home

The Lost Dogs’ Home

Gross Income for Individuals Over Years

$100,000

$200,000

$300,000

$400,000

$500,000

$600,000

$700,000

$800,000

1993 1994 1995 1996 1997 1998 1999 2000 2001 2002

Direct Mail Event Membership Merchandise Other In Memoriam Internet Gift In Kind

State of play

Struggling for second gifts

Less donors giving multiple gifts

Struggling to recruit

Appeals program not thriving

So, what did they do

Found out who their donors were

What makes them tick?

Got really personal

Solicited real opinions

Didn’t tippy toeing around bequests

WARM SURVEY RESULTS 2004 2005 2006 2007 2008

Quantity Mailed 15,888 16,357 18,835 24,883 21,563

Total Response 2,769 3,947 4,874 6,746 5,509

Response Rate % 17% 24% 26% 27% 26%

Immediate Gross Income $104,178 $130,926 $111,890 $215,189 $178,381

Immediate Net Income $55,011 $64,494 $92,326 $148,860 $114,999

Confirmed Bequest 373 191 86 81 120

Intend to Bequest n/a 560 232 522 115

Consider Bequest 1056 647 614 335 156

Surveys rock

They went online

They went online, to get personal

Asking the tough questions

Getting personal: using the data

• Got personal with donors• Focused on areas of growth – monthly

giving, bequests• Put the fundraising into relationship

fundraising • Used data driven, disciplined direct

marketing• Were prepared to spend now, reap returns

later• Looked at what others were doing

Getting cute

Getting cute, but still data driven

• Got personal with donors• Focused on areas of growth – monthly giving,

bequests• Put the fundraising into relationship fundraising • Used data driven, disciplined direct marketing• Were prepared to spend now, reap returns

So, what did they do?

They changed donor behavior

They talked honestly about bequests

Solicited genuine feedback

Solicited genuine, personal feedback

Replayed it back

They involved donors

They were disciplined through the mail

Getting clever, but data driven

1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003$0

$100,000

$200,000

$300,000

$400,000

$500,000

$600,000

This purple block represents income from the first appeal using the new strategy - to the same donors

Crisis appeal: immediate impact

Spend now, reap returns later

1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 $-

$500,000

$1,000,000

$1,500,000

$2,000,000

$2,500,000

$3,000,000

$3,500,000

bequests• Put the fundraising into relationship fundraising • Used data driven, disciplined appeals• Decided to spend now, reap returns later• Looked at what others were doing

Looked at what others were doing

So, was it all worth it?

Yes. In the short term..

Knowing Bilbo increases upgrade

rates by 43%!

1998/99 1999/00 2000/01 2001/02 2002/03 2003/04 2004/05 2005/06 2006/07 2007/08

Cash Regular Gift Bequest Merchandise Unsolicited In Memoriam Membership Event

Yes. In the medium term..

From 98 to 10,330 activemonthly donor’sApprox 1m USD

SW ACF

Yes. In the long term..

5.7% of their active donors have confirmed they are leaving a bequest – that’s 1.649 donors

1998/99 1999/00 2000/01 2001/02 2002/03 2003/04 2004/05 2005/06 2006/07 2007/08

Cash Regular Gift Bequest Merchandise Unsolicited In Memoriam Membership Event

Yes. In the long term..

BUT, only now reaping the rewards

1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 $-

$1,000,000

$2,000,000

$3,000,000

$4,000,000

$5,000,000

$6,000,000

$7,000,000

Total Cost COF

Getting the balance right: cost v value

THANK YOU

segmentation and personalisation final iwrm bangalore 2009

lost dogs

growth monthly

disciplined

long term

short term

reap returns

bequests put

pareto fundraising

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