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Data analytics demystified

publication date: May 8, 2013
 | 
author/source: Alison Keys

First of all, what are data analytics? Alison Keys photoJoshua M. Birkolz, Author of Fundraising Analytics: Using Data to Guide Strategy says, “Data analytics are a suite of statistical tools and techniques used to analyze constituencies, build predictive models to predict constituent behaviours, and make organizational decisions by evaluating program performance and projecting future program performance.”

In other words, it’s the process of taking an in-depth look at your database to generate a hefty report with key performance indicators that will include at minimum:

  • Average revenue per donor (and year-over-year change);
  • Average gift size;
  • Average number of gifts per donor;
  • LOA (length of association or lifetime value);
  • Percent of active donors, lapsed and deep-lapsed donors; and
  • Donor attrition/retention rate.

The report provides an overview or snapshot of your donors and marketing activities. It addresses important trends – for example, are you losing too many donors? Are you acquiring too few new donors? Is the revenue slipping? You can use the report to help you build a year-long strategy of programs, campaigns and communications, or you can simply use its findings (your donor base, scored and segmented) to run new campaigns.

What charities can benefit from analytics?

“Any charity for which we can measure donor response through direct marketing activities is a good candidate. The key here is to make sure that there is donor data and gift data, at a minimum, that is captured in some digital format, and hopefully it’s clean. The more data that is available, the better the quality of the analytics,” states Amanda Pagoulatos, marketing technician with Trico Evolution.

“Furthermore,” she continues, “organizations that have no donor or gift data can benefit from a preliminary analysis using census demographics and third-party behavioral data. One of two main approaches is used. The organization can provide the profile of the donors they would like to reach (in which case the analysis would search out geographic areas to select the best places to find this type of profile); or, for an organization limited by geography (as in churches, hospital foundations), we analyze the neighborhoods around the charity’s locations to provide the demographics of those living nearby.”

What is, and what could be

The types of analytics most often used are descriptive and predictive. Descriptive analytics are based on observed data (i.e. data available in your database) and are what you would find in reports and in-depth analyses.

Predictive analytics use past data to predict future outcomes. For instance, analyzing the past gift behaviour of donors can help us develop models to predict the likelihood that they will give again in the future, through which channel, and the types of campaigns to which they are most likely to respond.

Analytics reveal the health of your donor base, donors’ behaviours and demographics, and the impact of your marketing activities on revenues and donor relationships. Analytics often analyze these metrics in a period-over-period fashion and against set benchmarks to gauge performance and uncover trends. They will help you:

  • profile donors (segmentation);
  • find the profiles that have the greatest affinity with your charity;
  • develop profile-adapted marketing and communications to reach these donors; and
  • use this profiling to select areas for acquisition activities.

Base your actions on facts

The benefits of analytics are many. In general, your organization will get a real view of what’s going on with your donors and activities, based not on a gut feel, but on actual facts backed by data.

You can use these insights to decide where to drive marketing dollars and where to focus your efforts. You will find out what is truly affecting your bottom line where donors and campaigns are concerned. This new information can help formulate marketing strategy and tactics as well as develop programs. It can even be used to re-position your brand or to re-brand, if needed.

Alison Keys, president of Keys Direct Marketing and Communications, is recognized as a direct marketing strategist and communications expert. For nearly two decades, Keys Direct has provided high quality tele-fundraising, direct mail, e-marketing and consulting services to nonprofits. Alison serves as a mentor to Keys Direct staff as well as a hands-on partner with the agency’s clients.

She’s the mother of two “amazing” teen-agers who have been encouraged from an early age to be actively involved in the causes that are close to their hearts.

Contact Alison by email.



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