The methods by which organisations acquire, hold and use personal data are the subject of intense scrutiny and GDPR legislation. At the same time, as the spectre of post-Brexit austerity looms, there’s more pressure than ever on fundraisers to deliver, particularly in healthcare and social welfare.
Across a wide range of UK and overseas charities, we are seeing increasing numbers respond by seeking a substantial increase in fundraising performance (such as doubling it) over a five- to ten-year period. The ways in which charities can approach this may vary anywhere from heavy investment in cold marketing at one extreme (poor for short term ROI – possibly better for long-term income) to focusing on efficiency to maximise the support of existing loyal donors at the other (can achieve a very good ROI but the active pot of donors actually shrinks over time through attrition).
Meeting the campaign challenge
Most charities clearly choose to sail somewhere between these two poles, as fundraisers attempt to manage campaigns to optimise the balance between maximising today’s income and ROI, and maintaining the long term health of the supporter file to ensure the continuing ability to deliver the charity’s mission. Wood for Trees believes there is an optimum middle ground in using dynamic campaign selections to engage all their supporters more effectively while optimising value across the organization.
So how does a charity achieve a sensible and effective balance between income now and growing income for the future?
At Wood for Trees we work with our clients to meet these two key objectives by combining a simple segmentation with fact-based selections to ensure that the right objectives are set for each supporter and that campaign selections are optimised to deliver these efficiently.
The process is set out below. Cash Appeals have been used as the example in the remainder of this paper but the process can be equally applied to other types of giving such as Regular Gifts, Raffles or Catalogues.
The campaign process
Stage 1: Initial contact segmentation
The supporter file is split into two groups:
- Core Cash – Supporters with an active cash giving history. Typically defined as supporters who have made a cash gift in the last two years.
- Cash Development – Typically supporters who have not made a cash gift in the last two years. Often further sub-divided into:
- Supporters who have made a cash gift more than two years ago
- Supporters who have made a financial gift but not as a cash payment – so this would cover regular givers via direct debit, event participants, raffle ticket buyers etc. In practice this group is often broken down into more detailed segments based on type and recency of gift.
- Supporters with a non-financial relationship such as campaigners or enquirers.
Stage 2: Campaign activity
Selections made from the initial segmentation are then included in an appeal or campaign.
Stage 3: Results analysis
The results are analysed and recorded in the supporter database
Stage 4: Segment reallocation
Supporters are then reallocated to contact segments based on their response to the appeal.
- Responders will be allocated into the core cash giving segment. This core segment will form the cornerstone of future selections.
- Non-responders stay in the cash development segment. For this segment, less frequent and/ or more diverse communications may be more appropriate.
- Persistent non-responders are identified over time and should be removed from the programme and allocated to the offer development segment. This avoids wasting resources and reducing supporter satisfaction but also highlights the fact that work is needed to identify ways of supporting the organisation that are appropriate for these supporters.
Complete and continue the cycle by undertaking the next selection based on the learnings and actions from stages 3 and 4 above.
The detailed selections within the contact segments should be based on likelihood to respond. The selections can utilise either mathematical propensity models or segmentations based around behavioural data (recency, frequency, value, type of gift) and demographics. The individual solution will depend on the availability and quality of data. Whatever approach is used, the key issues are:
- The selections are based on hard data applicable to the supporter.
- The selections are consistent so that over time we can build up a history of the selection and understand the response rate for that selection – whether it is a model decile or an RFV segment.
- The supporter’s selection and response history is captured so that after each campaign they can be reallocated to the correct contact segment and selection for the next round of activity.
For the development segments the most responsive selections can be prioritised for contact in future campaigns while the least responsive are migrated to the offer development segment.
Wood for Trees uses this approach with a number of our clients to provide a range of benefits:
Understanding the supporter file
Using a combination of segments and more detailed selections means that the organisation can easily:
- Assess and visualise the potential and key issues within its current supporter file.
- Track changes over time caused by both marketing activity to existing supporters and ongoing recruitment of new supporters.
Understanding the make-up of the file simplifies the planning process and provides a framework within which the operational plan can address the issues within the file.
Active and engaged supporters can be sent appeals where this will generate positive ROI for the organisation.
Maintaining the health of the supporter file
Lapsed supporters or those with no previous giving history can be contacted where they are likely to prove profitable in the medium term. This helps to ensure that the appeal selections are refreshed and that there is sufficient emphasis on growing the supporter file.
Maximising cross sales and offer development
Identifying persistent non-responders enables the organisation to either put different offers in front of these supporters or even develop fresh new offers.
The key to Dynamic Campaign Management is that this progressive process delivers a structure for targeted future development. Offer strategies can be tested so that existing high-performing donors are protected and nurtured, while less responsive supporters are either targeted with different offers or removed from future selections.
No organisation wants to spend valuable resources contacting people who no longer want to support it.