Using Models for Reactivation To Model or Not to Model Using Models for Reactivation

Presenters Steve Veto V.P. of Consulting Services Aegis Premier Technologies 1490 W. 121st Ave., Suite 201 Westminster CO 80234 sveto@aegispremier.com PH: 618-622-9252 Roger Hiyama SVP, Client Services Wiland 1800 Diagonal Road, Suite 600 Alexandria VA 22314 rhiyama@wiland.com PH: 703-403-3403 Jan Parrott Direct Mail Manager Sisters of St. Francis St Francis WI jparrott@lakeosfs.org PH: 414-744-1160

Subsequent Activity (25-36 Mos) Lapsed 2+Yr Reactivated Reactivation Models Why mail to a Lapsed Donor?   Subsequent Activity (25-36 Mos) Donors Gifts Revenue Avg Gift GPD RPD Conversion Rate LTV / Donor Donor Segment New Donors (2014) 2,991 5,189 $65,730 $12.67 1.73 $21.98 27.03% $16.48 New New Donors (2015) 3,370 6,092 $80,564 $13.22 1.81 $23.91 26.18% $18.36 New Donors TOTAL 6,361 11,281 $146,294 $12.97 1.77 $23.00 26.57% $17.49 Reactivated Lapsed 1 (2014) 1,909 3,018 $44,823 $14.85 1.58 $23.48 42.35% $26.74 Lapsed 1Yr Reactivated Reactivated Lapsed 1 (2015) 1,999 3,238 $47,246 $14.59 1.62 $23.64 41.38% $25.74 Reactivated Lapsed 1 TOTAL 3,908 6,256 $92,070 $14.72 1.60 $23.56 41.85% $26.22 Reactivated Lapsed 2+ (2014) 1,460 2,294 $35,992 $15.69 1.57 $24.65 33.20% $21.83 Lapsed 2+Yr Reactivated Reactivated Lapsed 2+ (2015) 1,408 2,222 $37,922 $17.07 $26.93 32.30% $21.87 Reactivated Lapsed 2+ TOTAL 2,868 4,516 $73,914 $16.37 $25.77 32.75% $21.85

Use of traditional RFM segmentation can be effective … up to a point Traditional RFM Selection for Lapsed Names Use of traditional RFM segmentation can be effective … up to a point Recency and Frequency drive response; Monetary drives revenue Recency and Frequency become relatively unimportant after 37+ months That’s where external information becomes very important

What is a Reactivation Model? To Model or Not to Model? What is a Reactivation Model? A reactivation model is a program that examines the organizations current active database (00-12 month responders) and typically compares it against items like previous response behavior, buying tendencies, gender, religion, political voting tendencies, home ownership vs. rental, number of automobiles, last response outside the organization, etc. Some models look at over 400 different characteristics or items, and applies weights to each item based on how many active donors match up against any particular item. A MODEL summary weight is assigned to each lapsed name that is processed against the Model.

Score = Ax + By + Cz What is a Model? (simple terms) A Primer on Modeling What is a Model? (simple terms) Multivariate Scoring Equation Score = Ax + By + Cz X, Y, Z = Significant variables A, B, C = weight or significance Model then broken down into segments 01 = top segment No model Model

What is a Significant Variable? Modeling Overview What is a Significant Variable? Consider the flipping of a coin If you flip it, 100 times --- it should come up 50 heads and 50 tails If you flip it 100 times and it came up 55/45, you’d think that to be a reasonable But if you flipped it 1,000 times and it came up 550 heads and 450 tails, you’d likely think that to be significantly different

The Power of Coop Data

The Power of Coop Data

Different Types of Models for Reactivation Profile Models Response Models Response-Driven Revenue - Driven Key Differences Between Responders and Non-Responders Look-a-Like/ Clone

Significant Variables in a Model

Examples of Significant Variables in other Catholic Models

Scoring Equation/ Model List Optimization Models Client Database Lapsed portion Scoring Equation/ Model Scored Lapsed

Profile vs. Response Models for Reactivation 1 2 3 4 5 6 7 8 9 10 1 2 3 4 5 6 7 8 9 10 More names at the top Doesn’t provide as much differentiation Use only if response models aren’t possible Differentiates well For Quality – use revenue driven model For Quantity – use response driven model

What type of weight or code is actually applied to each lapsed name. Reactivation Models What type of weight or code is actually applied to each lapsed name. Each Model is a little different in applying the weights. Some models have 10 segments or deciles, others may have 20 or even 40 segments Other Models use 3 or 4 digit weight codes where the higher codes are the most likely to respond. note: For this presentation, we will be using the DECILE weights.

Why use Models with Reactivation? Reactivation Models Why use Models with Reactivation? The use of MODELS has proved to improve the reactivation response rates by determining those donors most likely to respond vs. those least likely. Usage of Models will reduce your reactivation cost. By applying the model weights, you can mail the top 1/3 of the lapsed donors 3 times instead of mailing the whole file once and you will have a much higher response rate giving you a higher volume of reactivated names with a lower overall cost. You still should include at least deciles 04 to 07 in some mailings within the year. Note: A reactivated name is typically worth more to your organization after 3 years than a new name.

How often should you update the names in the MODEL? Reactivation Models How often should you update the names in the MODEL? Originally, we updated the lapsed pool quarterly. But in the last year, we have begun updating it every 60 days as we have increased our reactivation mail quantities year to year. NOTE: The COOP Mart gets updated and refreshed every 2 weeks so the scoring of the names will vary; we recommend scoring immediately before you mail !

How often do you tweak the model. Reactivation Models How often do you tweak the model. That really depends on how much you are using the model and how your results are looking mailing after mailing. Our Aegis clients are typically reviewing their models annually and test into new models without fully abandoning their current model. If your creative changes, you’ll want to build new models.

Do MODELS work for Package Themes? Package or Theme based models? Do MODELS work for Package Themes? Yes, MODELS can be used for selecting the best names to mail for a package theme. An example would be Seasonal card packages vs. Deceased Enrollments vs. Mission themed packages. We have experienced some great success in using a custom MODEL to drive the best lapsed names into a Theme mail plan.

Healing Package

Memorial Package

Sample test mailing all 10 Deciles from the MODEL Reactivation Models Sample test mailing all 10 Deciles from the MODEL Christmas Cd Reactivation   Lapsed Model : Lapsed Model Segment Description Mail Date Qty Donors $ Resp Total Donated Total Cost %Resp Avg.Gift Gross / ROI Mailed Letter 101 SEG01 09/09/2016 2,214 168 171 $2,517.00 $1,403.68 7.72% $14.72 $1.14 1.79 102 SEG02 2,286 128 $1,850.00 $1,449.32 5.60% $14.45 $0.81 1.28 103 SEG03 2,334 115 $1,332.77 $1,479.76 4.93% $11.59 $0.57 0.90 104 SEG04 2,483 117 $1,342.00 $1,574.22 4.71% $11.47 $0.54 0.85 105 SEG05 2,611 $1,181.00 $1,655.37 4.40% $10.27 $0.45 0.71 106 SEG06 2,678 139 $1,568.00 $1,697.85 5.19% $11.28 $0.59 0.92 107 SEG07 2,748 111 $1,279.00 $1,742.23 4.04% $11.52 $0.47 0.73 108 SEG08 2,625 $1,128.00 $1,664.25 3.96% $10.85 $0.43 0.68 109 SEG09 2,827 $1,324.00 $1,792.32 4.07% $11.51 0.74 110 SEG10 3,667 122 $1,332.00 $2,324.88 3.33% $10.92 $0.36 0.57  Totals 26,473 1,234 1,237 $14,853.77 $16,783.88 4.67% $12.01 $0.37 0.88

A closer look at the response rates Reactivation Models A closer look at the response rates Christmas Cd Reactivation   Lapsed Model : Lapsed Model Segment Description (Decile) %Resp Donors 101 SEG01 7.72% 102 SEG02 5.60% 103 SEG03 4.93% 104 SEG04 4.71% 105 SEG05 4.40% 106 SEG06 5.19% 107 SEG07 4.04% 108 SEG08 3.96% 109 SEG09 4.07% 110 SEG10 3.33%  Totals 4.67%

A closer look at the response rates in a Chart Reactivation Models A closer look at the response rates in a Chart

A closer look at the response rates in a Chart Reactivation Models A closer look at the response rates in a Chart By mailing the first 3 deciles 3x instead of mailing all 10 deciles once, you will increase your percent of response and lower the cost of Reactivation, thereby acting as good stewards.

Here is a look at an appeal with Recency added Reactivation Models Here is a look at an appeal with Recency added Seg-01 is Decile-01 where we got a 3.44% response vs. Seg-02 where we got a 2.99%.

Here is another look at an appeal with Recency added Reactivation Models Here is another look at an appeal with Recency added In this sample we have Seg-01 and seg-02 pulled out for both the 24-36 month lapsed and the 37-plus month lapsed. The percentages in the right hand column tell the story. Recency plays a roll but the model can find good names in the 37-72 month buckets.

Final Sample is response in a model being tested: Reactivation Models Final Sample is response in a model being tested:

Do models work with Acquisition? Reactivation Models Do models work with Acquisition? Yes, models can be used when selecting names from a coop list. Again, just like selecting the best lapsed names based on your existing active donors, you can use the model to select the best coop names.

Reactivation and Acquisition Models Known MODELS for Reactivation and Acquisition programs in the Religious environment to look into: Wiland Apogee IBehavior DonorBase Target Path2Response (new)

Thank You ! Thank You Steve Veto Roger Hiyama Jan Parrott V.P. of Consulting Services Aegis Premier Technologies 1490 W. 121st Ave., Suite 201 Westminster CO 80234 sveto@aegispremier.com PH: 618-622-9252 Roger Hiyama SVP, Client Services Wiland 1800 Diagonal Road, Suite 600 Alexandria VA 22314 rhiyama@wiland.com PH: 703-403-3403 Jan Parrott Direct Mail Manager Sisters of St. Francis St Francis WI jparrott@lakeosfs.org PH: 414-744-1160

Reactivation Models Questions