Are Fundraisers Really Ready for Insight? Do You Have a Story?
Understanding ROI: Let's just think about this for a moment. We wouldn't have major data firms collecting and compiling data on the hundreds of millions of people in the U.S. if the value of this data to marketers was not high. So let's suspend disbelief and talk about what I believe is a common misunderstanding: "External data raises my costs and eats into my net/ROI." There are multiple ways to look at this, but to assume you are just lumping on costs is not the right way. There are both short-term and long-term gains to using third-party data:
- Short term: Depending upon the challenge you are trying to solve with third-party data/external data, you could see a reduced budget and/or improved results. Many people often think of modeling external data for the purpose of reducing costs. Yes, this is one option. You can identify individuals who are less likely to be involved with you in the long run or even respond to your next campaign. But that is not getting you "closer" to your consumers who are committed to your brand. That is more or less using modeling as a "weed killer." By using external data to adjust your messaging and offers, you can improve response rate and average gift in an individual campaign. Now, if you are saying, "What if I spend $15,000 on this external data and my results for the campaign are only up $15,00? It wasn't worth it, right?" Wrong! And that is the long-term gain.
- Long term: Anything you learn in a campaign can easily be applied in future campaigns. It has been proved over and over again — a more personal relationship drives a more loyal customer, and more loyal customers have higher lifetime values. By understanding message and offer differences through the lens of attitudes, demographics and other psychographics, you start making your entire program more personalized. The long-term impact of this is seen throughout all your campaigns as well as annual and multiyear retention rates. Now, if you are saying, "But I have to keep spending money to overlay that external data on my file, and that's expensive," yes, you are right. It is an ongoing expense, but if you do this correctly and have a good data partner, this should not outweigh the benefits.
Trust me, I know getting outside of a comfort zone is not easy, but to not explore something (and take the time to do it right) is like admitting you cannot do any better. As an industry, we have to move more quickly in this direction. I simply cannot agree that "it doesn't work for us." For those who take the time to truly embrace the world of "external data" (and test it properly), success will come at a greater pace.
Vice President, Strategy & Development
Eleventy Marketing Group
Angie is ridiculously passionate about EVERYTHING she’s involved in — including the future and success of our nonprofit industry.
Angie is a senior exec with 25 years of experience in direct and relationship marketing. She is a C-suite consultant with experience over the years at both nonprofits and agencies. She currently leads strategy and development for marketing intelligence agency Eleventy Marketing Group. Previously she has worked at the innovative startup DonorVoice and as general manager of Merkle’s Nonprofit Group, as well as serving as that firm’s CRM officer charged with driving change within the industry. She also spent more 14 years leading the marketing, fundraising and CRM areas for two nationwide charities, The Arthritis Foundation and the American Cancer Society. Angie is a thought leader in the industry and is frequent speaker at events, and author of articles and whitepapers on the nonprofit industry. She also has received recognition for innovation and influence over the years.