John Crewe explains what charities can learn from organisations in the mail order/multichannel retailer industry sectors in terms of reactivating lapsed donors.
Perhaps it’s because mail order companies have been using data co-ops for far longer than nonprofits that they recognise that the power of a data co-op is not limited to acquisition. Pretty much every mail order company I have dealt with in Australia, the UK and the US has extensively utilised the reactivation services available to them from data co-ops, often very successfully.
Identifying your best lapsed donors
So how can a data co-op help a charity to identify the best lapsed donors to reactivate? The answer’s simple, really: the data co-op can do so because it looks at what your lapsed donors are doing with other charities.
If the co-op can identify that 25,000 of your 300,000 lapsed donors have donated elsewhere in the last 12 months, then it flags these donors and returns them to you. As such you can now contact only those donors who are known to be actively donating elsewhere. Furthermore, the co-op might also be able to identify whether your lapsed donors are donating to charities within the same type of cause as your own.
The rationale is straightforward. If some of your donors are happily donating elsewhere, wouldn’t these people be the best targets within your lapsed database?
Unfortunately, almost every Australian charity that has decided to join a data co-op appears to believe the only service available is that of acquiring new donors. One charity that has, however, recognised that lapsed donor reactivation is a key service available to it is Cancer Council NSW. By utilising the Insight co-op’s reactivation service, Cancer Council NSW identified 59,000 of its 1.3 million lapsed supporters who had donated elsewhere in the previous 12 months. Direct Marketing Manager Joshua McNeil says, “It made perfect sense to better understand how our lapsed donors were transacting elsewhere, especially with other charities, to refine our reactivation campaigns.”
Nonprofits vs the commercial sector
Why is there a difference between the not-for-profit and commercial sectors in their use of reactivation services from co-ops?
Maybe it’s because the team responsible for existing/lapsed donors is separate from the acquisition team and as such simply does not realise this service is available to them?
Perhaps some of the external fundraising consultants who look after reactivation simply don’t understand, or see the value in, knowing what a donor is doing with other charities, believing the narrow perspective of a donor’s behaviour with a singular charity using their analysis is more valuable?
Or could it be because some charities believe their donors only donate to them and that obtaining additional insight into their donor behaviour elsewhere isn’t necessary?
How does it work?
When a charity provides its contribution to a co-op it should provide its entire donor lifetime history as far back as 10 years so the co-op can identify whether any of the lapsed donors were active elsewhere in the last 12, 24 or 36 months.
If you look at the table below you will see the view that the co-ops have when they look at your donors: namely the co-op can see the date of the last transaction a donor has with you and can then compare this with what they have done elsewhere. The donors you should be concentrating your efforts on are those that are highlighted in lilac.
The flipside of this analysis is that the co-ops are also able to identify which donors you should avoid trying to contact because they haven’t made donations elsewhere in the last 12 or 24 months – those highlighted in pink.
Although using other external data sources which seek to validate whether a donor is still alive or is still living at the same address is an important step in the pre-campaign process, wouldn’t it be even more logical to identify if that person has been actively donating to other charities more recently?
The future: could it move to reactivation-only co-ops?
With the possible tightening of legislation on the not-for-profit sector in regards to the sharing of donor data, perhaps the future of data co-ops might reside in providing services that enable charities to only share data to facilitate these reactivation services. A reactivation only co-op would more likely sit easier with those charities, and their fundraising consultants, who have steadfastly refused to join a co-op until now.
If using the reactivation services of data co-ops appeals, the one remaining thing to identify is whether the co-op you are using is of a size that allows for reactivation to be performed. The larger the membership of the co-op (the number of charities sharing their data), the more effective this service will be. If your co-op can only identify 1% of your lapsed donors as having donated elsewhere more recently then it’s probably worth looking elsewhere for this service.
John, Managing Director of Conexum, has a wealth of experience working with charities and is keenly aware of the main challenge currently facing the nonprofit sector: the need to maximise fundraising through improved targeting techniques while keeping databases as clean as possible.