My third, and final, recommendation on actions to take at this mid-point in the year is simply this:  stop thinking.

I’m not suggesting you cease using your considerable cerebral powers, but rather when it comes improving your bottom line results I do want to recommend a new type of thinking.  And that means you need to stop thinking the conventional way most direct response fundraisers think.

We fundraisers spend a lot of time developing the offer – writing (and rewriting) an appeal letter 27 times, holding 4 meetings to decide on red vs. gold foil labels,  debating whether that cuddly polar bear premium is more compelling than another furry friend.

Sadly only a fraction of that time is generally spent assessing who among your donors should get the offer and why

Fact is that especially when armed with a spreadsheet program and a computer with a ‘copy’ function, the human brain can get us in a lot of trouble.  Other professions seem to have learned this far faster than ours.

Pilots spend a lot of time learning to trust instruments in bad weather and dark nights.

Nurses use the Apgar scoring system to quickly assess the health of newborns.

Mortgage brokers qualify you based on a FICO score created by Fair Isaac Company.

In short, the human brain should be invited to sit on the bench when the game of meeting the bottom-line is at risk.

Because many fundraisers, their analysts or consultants, mistakenly cling to old approaches they needlessly destroy the bottom line.

Why?  Because they rely on their human brain that is only capable of processing information in a limited number of mental buckets.  That’s why segmenting on one data point of  recency, frequency and monetary amount (RFM) has such appeal.

And when this happens the result almost always ends up with a selection  or segmentation plan with far too many donors who respond poorly or not at all.

A ‘human brain’ segmented file is depicted below.

In this case donors are selected on a ‘grid’ based process based on recency of last gift and gift amount.  The human brain tells us that donors who recently gave large gifts are the best and those that have only given one gift or are lapsing should be suppressed.  The human brain is wrong.

How do we go ‘beyond the brain?’

I’ve asked my colleagues over at our sister company DonorTrends if they will devote some of their summer analytic time in helping Agitator readers who want to ‘beat the human brain’ or go beyond the brain do so without charge.

They will start by preparing a custom Master File Analysis and Action Plan for you and your organization – consultants welcome too – that will open your eyes to a far better and far more effective way to segment your file.  A process that will take the guess work out of your fundraising for the balance of the year and boost your bottom line.

How does it work?

FIRST… the folks at DonorTrends analyze your donor file and give you a live presentation to help you understand high level metrics such as:

• Lifetime Value (LTV)
• Retention
• Revenue per Donor
• Mid and Major Donor Upgrades
• Understanding where you stand will help you focus on the areas that need improvement.
• Use a predictive model (science not the human brain) to score your donors.
• Develop a contact strategy based on DonorScore™ that maximizes your fundraising goal(s).

What is this all about? Regardless of the size of the organization this process maximizes net revenue by selecting the best donors to target for appeal/renewal, annual fund campaigns and special purpose efforts such as mid-level upgrades, sustainers and second gift strategies. Using formulas that have been tested and proven by some of the most sophisticated nonprofits and consultants, future donor behavior is predicted and donors are grouped into three donor clusters based on their DonorScore™, the name DonorTrends has given this process.

NEXT… A contact strategy / communication plan is created based on donor cluster. 

A sample of the contact strategy is below.  This strategy maximizes revenue from the best donors by contacting them every effort, in addition to three targeted mailings.  Cost is reduced because efforts are reduced, or ‘selectively suppressed’ to the ‘Casual’ and ‘Episodic’ donors.

The result is a dramatic increase in net revenue that we cannot achieve by casting a wide net.

Finally … DonorTrends’ analysts will walk you through how best to put all this to work in a time-saving, cost-saving way that will impress even the most skeptical.  As one fundraising manager put it, “I used to devote at least a day a week to the minutiae of planning and analysis.  Now I spend 15 minutes and get far, far better results.”

Frankly, in the face on stagnant growth, economic woes and increased competition, I can’t recommend a better way to give your brain a summer break.

Roger

P.S.  If you’ll click here  and go to the special landing page created for Agitator readers, the folks at DonorTrends will set all this in motion – free of charge — and you’ll have your results back in less than one week after they receive your file.  Contact ‘em and they’ll explain all and answer any questions.