Analytic Optimization Thalamus Hill SVP of Advanced Analytics, RKD Group Robert Connelly Director of Strategic Services, Integral #DM201
Analytics Drives Strategy
LTN
Net Impact by Giving Level 62% of the donors acquired are under $25 and do not generate net revenue. 1st Gift Levels LTN Value % New Donors Break-Even Point <$25 ($22.14) 62.4% Not in 5 Years $25-$99 $32.08 36.1% 9 Months $100+ $324.39 1.5% Immediately $11.53 100% Should be 3~5% Note: national organizations should generate between $20-$25 of long-term net value
Low Control Gift Array People give to what they’re being asked for; therefore, be careful …. None of the ask array values are at or above the net generating threshold of $25. LTN Viability
Geographic Footprint In other words, follow the money Socio-economic status and becoming a viable donor (net producer) is correlated. Wealth Level Market Penetration
LTN by Wealth Cluster Optimized organizations acquire 40% of their donors from Wealth Cluster 1. Reduce acquisition within WC’s 7-10 as it loses $3.06 of LTN value per donor acquired. Wealth Clusters High = 1 Medium = 2-4 Low = 5-10
LTNROI
Prior to LTN evaluation LTN Value by Mail Volume 18.3 million rental names were evaluated within 181 lists – LTN to ROI viability = 0.48. Uncovering the linear relationship between LTN and ROI has led to a 125% increase in net. Prior to LTN evaluation
LTN by Age Donors acquired between ages 55-74 generate positive levels of LTN value.
LTN by Control Package Donors acquired via non-premium packages are 353% better in generating net value.
LTN by Seasonality For this national organization, Long-Term Net value was $12.80. Target more donors in February, April and August – 35%, 66% and 48% higher in LTN value.
LTN by Multichannel Readiness Multichannel ready donors are significantly more valuable than those who are not. Given the intrinsic value, implement strategies to materialize this financial potential.
Multivariate Testing
Donor Journey Use attribution logic to understand the “true” conversion pathway relative to last click insights Originated via Paid Search Visited Leadership Team Page via Paid Search Came back via Paid Search Visited a donation form but did not convert Exposed to Display ads Received a Direct Mail package Exposed to Paid Social Came back to the site (direct) Visited What We Do page Came back and donated $2.5K (credited to direct) Uncover what initiates, supports and converts in order to properly create your media mix budget
Enterprise Segmentation People give to their passion points Familiarity and trust = donor value Connecting to the different faces of an organization = loyalty Demographics Attitudes Concerns Behavior Belief Familiarity Giving Heart Engagement
$7.6M $6.6M $8.6M $6.9M $24.2M $23.8M $21.7M $19.4M $15.7M
Ask yourself, how should we be handling our data? GiGo – Garbage In / Garbage Out Ask yourself, how should we be handling our data? Collect what you only need to. Question how the data will be used. Discuss how will you get the data in…and just as important, how will you get it out? Am I being consistent with how data is being collected & stored? Is anything missing that will render the data less useful (or useless)? $7.6M $6.6M $8.6M $6.9M $24.2M $23.8M $21.7M $19.4M $15.7M
Baseline Calculations Cash revenue in a set period of time Gross Revenue Reviewed by segment, campaign, program, and fiscal year Gross revenue minus expense Net Revenue Expenses typically include direct costs for campaigns (less typical: overhead costs like database fees, caging, etc.) Number of gifts divided by quantity mailed Response Rate 1,500 gifts divided by 50,000 quantity mailed = 3% response rate Top indicator of campaign engagement level Gross revenue divided by number of gifts Average Gift $52,500 in gross revenue divided by 1,500 gifts = $35 average gift Top indicator of campaign commitment $7.6M $6.6M $8.6M $6.9M $24.2M $23.8M $21.7M $19.4M $15.7M
Gross Revenue per Thousand Mailed Net Revenue per Thousand Mailed Calculations Con’t Gross revenue divided by quantity mailed multiplied by 1,000. Gross Revenue per Thousand Mailed $52,500 revenue divided by 50,000 quantity mailed * 1,000 = $1,050 rev/m Allows equalized revenue comparison with differing quantities. Useful for overall productivity of appeals. Net revenue (gross revenue-overall expense) divided by quantity mailed multiplied by 1,000. Net Revenue per Thousand Mailed $52,500 revenue minus $15,000 expense = $37,500 net revenue. Divided by 50,000 quantity mailed * 1,000 = $750 net rev/m Net revenue divided by donors (number of gifts) Net Revenue Per Donor $20,000 gross revenue - $40,000 cost = -$20,000 net revenue divided by 1000 donors = -$20 net revenue per donor. Most useful as a measurement of acquisition productivity (often a net loss) $7.6M $6.6M $8.6M $6.9M $24.2M $23.8M $21.7M $19.4M $15.7M
Measuring Retention Defining retention Percentage of donors that return to give another gift in a specific timeframe (typically 0-12 months) Defining retention Measure the retention of new joins separately from multi-year members Lifecycle has a significant impact Considers both retained new joins and multi-year members, and influenced by the ratio of each Overall retention $7.6M $6.6M $8.6M $6.9M $24.2M $23.8M $21.7M $19.4M $15.7M
Retention by Giving First-Year Retention Multi-Year Retention FY members from current year/new joins from previous year Critical to understand behavior of new join cohort Multi-Year Retention MY members in current year/MY, FY, and reinstate in prior year Break into consecutive years for more insight Overall Retention MY, FY, reinstate in current year/MY, FY, reinstate, and new in prior year Influenced by quantity – ie overall retention could decline with large influxes of new joins $7.6M $6.6M $8.6M $6.9M $24.2M $23.8M $21.7M $19.4M $15.7M
Visualizing Retention $7.6M $6.6M $8.6M $6.9M $24.2M $23.8M $21.7M $19.4M $15.7M
Identifying Donor Groups $7.6M New: Donors who made their first ever gift within the 12 months being reviewed Lapsed (Reinstated This Year): Donors who did not make a gift in the prior 12 months Reinstated Last Year: Donors who were previously 12m+ Lapsed and reactivated in the prior 12 months Consecutive Givers: Donors who have given in 2 or more consecutive 12 month periods, and are 3+ years on the file New Last Year: Donors who were New in the prior 12 months and are in their 2nd year on file $6.6M $8.6M $6.9M $24.2M $23.8M $21.7M $19.4M $15.7M
Activation by Donor Group Detail *OTG Donors Only $7.6M $6.6M $8.6M $6.9M $24.2M $23.8M $21.7M $19.4M $15.7M
Donor Pipeline to Consecutive Donors $7.6M $6.6M $8.6M $6.9M $24.2M $23.8M $21.7M $19.4M $15.7M
SUSTAINERS $7.6M $6.6M $8.6M $6.9M $24.2M $23.8M $21.7M $19.4M $15.7M
New Monthly Donor Activation
How Activation Impacts Value
Existing Donor Average Gift Impacts Growth
How Performance Drives Investment
$7.6M $6.6M $8.6M $6.9M $24.2M $23.8M $21.7M $19.4M $15.7M
Thank You! #DM201 Thalamus Hill SVP of Advanced Analytics, RKD Group Robert Connelly Director of Strategic Services, Integral #DM201