Who is The Luxury Institute? Their website states that “The Luxury Institute is the uniquely impartial, independent and objective ratings and research and CRM consulting organization that is the global voice of the high net-worth consumer.”
What can we, as fundraisers, learn from The Luxury Institute? I am generally opposed to using the term ‘net-worth’ for fundraising purposes. True net-worth is impossible for us to determine as it includes too many unknown private variables (both assets and liabilities) for us to consider. However, if we assume that the high net-worth consumer that the Institute studies is the same person whom we are trying to identify and cultivate as the high capacity donor, understanding consumer trends better can only help us understand our prospects better as well.
With this in mind, reading the Institute’s new whitepaper with a donor-focused, rather than a consumer-focused, mindset offers us 7 trends that we can apply to fundraising. I encourage you to read the entire white-paper, remembering to be creative with the language used in order to apply it to fundraising practice.
For the purposes of this article, I want to introduce you to Trend 1. According to the Institute, the first Wealth and Luxury Trend to be aware of is “Luxury CRM Culture Dramatically Supersedes Operational CRM.” In this portion of the Institute’s whitepaper, the author explores the use of CRM (Customer Relationship Management) tools to help retailers segment, market and communicate better with their customers.
For non-profits, using CRM (Constituent Relationship Management) systems have been picking up steam for about a decade. In fact, a 2007 Eduventures study on use of CRM in higher educational organizations showed that nearly 1/3 of universities had some system in place that mirrored a CRM. I would expect that this percentage has grown significantly since 2007 and could be applied to other non-profit sectors as well.
Simply a CRM is a good database where an organization can track relevant information on their constituents, donors, prospects, members, alums, or anyone else who may be interested in supporting our organization’s causes. CRM goes further than simply collecting name, address and giving data by also tracking data to fully understand a person’s relationship to and interest in an organization. For us, rather than using CRM for customers, we look to such databases to better segment, market and communicate with our donors.
Part 2 of this article will explore the Institute’s concept of CRM and its applications to fundraising in more detail.
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