Developing Prospect Database - iGODirect

How a National Disability Charity developed a strong qualified prospect database from a list of 40,000 indirect supporters.

Introduction:

Over the last five years our clients’ Fundraising Department has been running successful raffles and promotions in each State of Australia. They collect contact details of approximately 20,000 individuals and organisations each year from these activities. These donor details are held externally to the client’s fundraising donor database with some records being held in paper form. These types of donors are considered indirect donors as the money received by the charity is not directly attributable to a donation as it is often received as a result of a lottery or promotion. Indirect donors come from the following annual activities;

  • Scratch & Win ticket promotions
  • Pin & Win ticket promotions
  • Raffle ticket promotions

 

Currently there is no communication between these indirect donors (except prize winners)and the charity after promotion or lottery ends.

There is no understanding of how engaged this group of people are with the charity or their propensity to make a donation in the future.

The challenge iGoDirect were given was to setup a strategy to open up a dialogue with indirect donors enabling the client to identify and migrate interested indirect donors into qualified donors. The charity would then add them to their database of existing donors who receive the bi-annual donor communications.

Analysis of alternative:

The charity had previously contacted a large random group of indirect donors as part of their bi-annual appeals, but the response rates were extremely low and costly. iGoDirect recommended developing a low cost test program that identified which segments of the group were more likely to donate and what is the most cost effective way to communicate with them. With answers to these questions the client would be able to rollout a communication strategy to this group delivering the highest attainable ROI.

Recommended Solution:

iGoDirect proposed a pilot program to be applied to a small selection of indirect donors. It was important to test a variety of communications channels, copy, scripts & data sources to ascertain the best possible mix to be rolled out to a wider audience. Our aim was to take a scientific approach, test the variables and then be in a position to recommend to our client a ‘go to market’ solution based on the findings.  The program would be split into 4 parts.

  1. Data capture, segmentation and test group selection
  2. Qualification of segmented groups through a mixture of DM channels
  3. Fulfilment of follow up communications
  4. Analysis & Recommendations

 

The indirect donors supplied their details in one of two channels; on or off line. It was important to keep the indirect donors within their initial channel to maximise response.

1. Data capturing, segmentation and test group selection:

Data capture: Raffle ticket buyers’ details were hand written on the ticket stubs. These details needed to be data entered into a database to enable analysis and any further contact.

Segmentation using Recency and Monetary Value as key attributes. For the test group we were able to segment multiple and single raffle ticket book buyers. Each book cost $50.We used the hypothesis that multiple book buyers would be more likely to become donors (and likely to be more generous) than single book buyers. Scratchie and Pin & Win tickets were purchased online and were of low value ($10).

2. Qualify segmented groups through a mixture of DM channels:

The individuals in the segments chosen were then contacted and were asked to conduct a survey for the purpose of qualifying them as prospective donors. The purpose of the survey was to;

  • Thank them for their indirect donation
  • Gauge their interest in the charity’s cause in general
  • See if they would be interested to hear more from charity in the future
  • Confirm their acceptance to receive further communications from the charity
  • Qualify if they would consider making a donation either now or at some point in the future
  • Capture any missing/incomplete contact details and add email addresses where possible

 

Business rules were setup so that specific answers from the qualification surveys would then be used to decide which records could be discarded and which records showed potential for making a donation at some point in the future. These were the records which went on to receive follow up communications.

We were testing a mixture of DM communication channels to ascertain which channel delivers

a)      The highest contact rate
b)      The most qualified people to receive follow up communications
c)       The most donations
d)      The lowest cost per acquisition
e)      The best return on investment

3. Fulfillment of follow up communications:

The purpose of the follow up comms was to share with them recent news, success stories with the aim of warming them up with the ultimate intention of getting them to making a donation.  Each communication included a donation mechanic. Individuals making donations became part of our client’s regular appeals.

4. Analysis & Recommendations:

Once the test program has been completed, an analysis of the results would identify which indirect donors were the most responsive, which were most valuable and which communications channels were most successful in obtaining responses.

This enables the charity to focus marketing dollars on converting the most profitable donors in the most cost effective way.

Results: (Pilot is still being rolled out)

Initial results from the offline qualification with donor request are:

Data group A

  • Successful contact rate of approx 90%
  • A donor response rate of 1.8%
  • An average donation amount of $106
  • A cost per donor conversion of $373
  • Fundraising acquisition costs returned in donations after 1 – 2 years
  • Approximately 30% of individuals will go on to receive the follow up communications

 

Data group B

  • Successful contact rate of approx 50%
  • A donor response rate of 4.12%
  • An average donation amount of $36
  • A cost per donor conversion of $276
  • Fundraising acquisition costs returned in donations after 3.5 – 7 years
  • Approximately 30% of individuals will go on to receive the follow up communications

 

Initial results from the online qualifications with donor request are:

Data group C

  • An email open rate of 19.5%
  • A click through from email to online qualification rate of 2.5%
  • A qualification completion rate of 1.6%
  • 0 donations
  • A cost per donor conversion of N/A
  • Fundraising acquisition costs returned in donations after N/A
  • Approximately 1% of individuals will go on to receive the follow up communications

 

Learnings:

  • Those that were asked directly if they wanted to donate had an average donation of 4 x times that of somebody who was not asked directly.
  • Including an ‘ask’ in the telemarketing script did not affect the survey completion rate which showed people did not mind being asked for a donation.
  • Phone has a lower cost per completed survey than email despite the higher cost to serve.
  • Email did not generate a single donation and is not a good channel for acquisition activity.
  • Phone is a much better channel at generating donations
  • The group that had the lowest cost per acquisition wasn’t the most profitable when looking at fundraising ROI.
  • It was important to use another metric when evaluating the most profitable data set – total costs divided by total donations. This figure will tell you how long (months/years) it will take before the conversion of a donor starts to generate positive cash flow.
  • We must be very selective about who to target when we come to roll out as the group that had the most donors is not necessarily the most profitable.