How to use data to target donors

When heavy storms are forecast in the American Midwest, stores like Walmart stock up on strawberry Pop-Tarts. Why? Because analysis of sales data shows, rather surprisingly, that in the past locals filled their shopping carts with Pop-Tarts just before bad weather hit. And because in retailing past behaviour is often a good guide to future behaviour, stocking up in advance allows Walmart to maximise its pre-storm Pop-Tart sales.

 

If you are a charity fundraiser, then this is relevant to you at a very basic level, and here’s why. Data analysis that’s been carried out in the past reveals that in any group of potential donors, the people most likely to make a donation to your charity in the future are the people who have already donated to your cause at least once. In charity giving, as in retailing, past performance is a good guide to future behaviour.

 

That means that a database containing a list of previous donors is a useful starting point for targeting potential future donors. But if this database is filled out with previous donors’ "RFM" data then it can be used to pursue a far more sophisticated digital fundraising strategy. RFM stands for Recency Frequency Monetary, and this refers to the recency of an individual’s last donation, the frequency that they make donations, and the amount of money they typically donate.

 

Armed with RFM data, not only are you in a position to ask previous donors for further donations, but you can work out when best to ask them, how often to ask them, and how much to ask them, in order to maximise your digital fundraising. It may not be obvious at first glance, but the answers to these questions are all in the data.

 

 

Getting started with data using CRM

This begs an important question: how do you extract these types of answers from your data? The simplest way for a charity to begin with a digital fundraising strategy is to use a constituent relationship management (CRM) system such as Salesforce for Nonprofits. This data optimisation software manages and records contacts with potential charity supporters and serves as a centralised database for RFM data as well as many other types of data that you collect.

 

Importantly, a CRM system will also allow you to analyse your data to surface insights about your potential supporters and answer questions such as those raised above.

 

For example, going back to the question of when best to ask past donors for another donation, you can use your CRM system to dive into your data and see what interval between asking for donations was the most successful in the past. Typically the answer is around four to seven months, but for your charity supporters, the answer may be very different. But whatever it is, the answer will be found in the data.

 

All good CRM systems should include the following features:

• Segmentation
• Data analysis and reporting
• Supporter engagement measurement
• Email communication

 

Popular CRM systems include

• Access thankQ
• Salesforce for Nonprofits
• HubSpot
• Microsoft Dynamics CRM
• Blackbaud CRM
• Raiser’s Edge NXT
• eTapestry