The field of analytics has been infiltrating cross-channel and intra-channel marketing for some time.  Some organizations have embraced the analytics movement by incorporating predictive analytics or prescriptive analytics into their marketing planning efforts.

Use of Descriptive Analytics

In most cases, however, an organization uses descriptive analytics – or looking at past performance to mine what happened and why it happened – to inform how they plan to interact with donors to maximize returns.  In these cases, operational and analytical reports – like campaign reports, year over year trend reports, and reports on segment, package, or premium performance from prior campaigns – are developed and used to make adjustments to the same plan from last year, tweaking the plan to accommodate test results and prior performance trends.  No doubt that this process yields continuous improvements in how the organization communicates with their constituents, albeit very, very gradually.

Moving the Ball with Predictive Analytics

However, many organizations are taking this one step further.  Instead of focusing on what happened and why it happened, they are looking at what might happen or how it might happen.  This is where we get into the area of predictive analytics.  Predictive analytics can be used to answer a number of questions about how your file is expected to perform under different circumstances.  Typical answers that can be answered using predictive analytics that benefit nonprofit marketers:

  • Which offer is more likely to drive higher responses or average gifts?
  • What segmentation variables allow me to maximize my ROI? Revenue?
  • How can I identify constituents that are likely to churn?
  • What rented lists are likely to perform better?
  • What channel should I use to reach the most constituents? Maximize ROI?
  • Which group of constituents is more likely to become sustainers?
  • What is the right timing of the ask? The right ask amount? The right opportunity?
  • How can I extend donor participation?
  • How can I maximize constituent value?
  • When do I give up?

By asking the right the question to achieve the goals of your particular program, and extending your strategy beyond descriptive analytics, you will be able to achieve significantly greater lift in your fundraising than just relying on tweaking based on your prior campaigns.

Leveraging the Experts

If your lift is still not quite where you expect it to be, you may be asking the wrong questions or using the wrong variables to draw a tight enough correlation.  Leveraging statistical experts to help analyze your program will help to tie up your predictive capabilities.  It may be that you need to think about additional datasets or a new set of technologies to leverage the types of analytics necessary to fully realize your organization’s vision. In many cases, due to higher costs to develop and maintain the technical infrastructure, and the high costs of hiring qualified analysts, organizations choose to outsource this work to a partner.

Word of caution: Don’t outsource and forget!  In the best programs that I have worked with on direct marketing strategy and supporting product and data needs, an organization and analytical partner work closely together to develop the right predictive strategy. The organization holds the keys to the affinity model of their constituents and the business cases that need to be executed, while the analytical partner is the expert in unlocking the data.  It requires that both keys be turned to enable the power of the data.

 

 

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