Transcript to the presentation

Analytics:
Statistics for Fundraisers
May 15, 2013
Direct Marketing 201
The key to maximizing value and sustained growth is getting the right
information to the right people at the right time
ANALYTICS
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What We Will Cover
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Data Sources
Types of Analytics
Campaign Analytics
Forecasting Analytics
Monitoring Outcomes
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Old Model
New Model – need a plan to integrate
DATA SOURCES
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Sources: The Old Model
Web Sites
TM
Donor/
Customer
Direct
Mail
Events/Major
Gifts
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You Need a Plan that Integrates the Data
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Integrating Data to Develop Strategy
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Balancing Analytical Needs
Description of Types of Analytics
TYPES OF ANALYTICS
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Analytics – Balancing LCLS
• There are basically 4 types of data that need
to constantly be balanced in decision making –
each has different value
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L – Lagging
C – Current
L – Leading
S – Strategic
Benchmarking
Campaign Reports/Testing
Forecasting/Budgeting
Scenario Building/Multi-Year
Growth
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Analytics – a Few Types
• Campaign Analytics
– Performance Reports
– Package Testing Results
• Forecasting Analytics
– Budget Forecasting
– Cash Flow Forecasting
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Analytics – a Few Types
• Digital Media Analytics
– Web Site Traffic Analysis
– Paid Advertising ROI
• Communication
Analytics
– Segmentation Analytics
– Predictive Analytics
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Analytics – a Few Types
• Performance Indicator Reports
– Trend Analysis (historic donor value)
– Multi-Year Forecasting (future donor value)
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Performance Reports
Metrics
CAMPAIGN ANALYTICS
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Performance Reports
• Key metrics help determine campaign success
– What are they?
– How are they calculated?
– Why is it important? Why may it be limiting?
• Which is most important when?
– It depends on your goals!
– It depends on the program!
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Response Rate
• What?
– The percentage of the quantity mailed that responded
• How?
– (# of Gifts/Quantity)*1000
• Why important?
– Indicator of package success. More gifts the better!
• Why limiting?
– Does not factor in revenue, size makes a difference.
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Average Gift
• What?
– The average size of the contribution
• How?
– Gross Income/# of Gifts
• Why important?
– The higher the gift, the more valuable the donor
• Why limiting?
– Does not factor in response, large gifts can skew
performance
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Gross/M
• What?
– Gross income per thousand pieces mailed
• How?
– (Gross Income/Quantity Mailed) * 1000
• Why important?
– The more revenue per piece, the better
• Why limiting?
– Does not factor in cost
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Cost/M
• What?
– Cost per thousand pieces mailed
• How?
– (Total Cost/Quantity Mailed) * 1000
• Why important?
– Tracks costs
• Why limiting?
– Test vs. rollout pricing need to be considered
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Investment/Donor (CTA)
• What?
– Net Investment to acquire a new donor
• How?
– Net income/# of Gifts
• Why important?
– Factors in response AND revenue AND cost
• Why limiting?
– Only used in prospecting, but it’s a key indicator!
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Acquisition Campaign Report
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Net/M
• What?
– Net income per thousand pieces mailed
• How?
– Gross/M – Cost/M
– (Net Income/Quantity Mailed) * 1000
• Why important?
– Factors in gross and cost, measures net productivity
• Why limiting?
– Not really applicable in prospecting when there is
traditionally no net revenue
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Appeal Campaign Report
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Which variable is most important when? It
depends, but general rule of thumb is …
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Acquisition – Investment/Donor (CTA)
Appeals – Net/M
Renewals – Response Rate
Upgrades – Average Gift
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Package Testing – Why?
• Build on what’s working, change what isn’t
– Tweak Tests, New Package
• Move the needle on a specific variable based
on program goals
– Response rate, Average gift, Net (etc.)
• Stay one step ahead of your peers!
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Package Testing – When?
• As often as possible!
– Try and test at least one variable in every mailing
• Tests aren’t limited to creative/design
– RFM segment testing in appeals
– List testing in prospecting (80/20 rule)
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Package Testing – How?
• Ensure there is enough quantity (and gifts) to
be statistically significant
• Test only one variable at a time
• Make sure segments are equally distributed
• Ensure you wait long enough to make a
conclusion!
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Package Testing – For Statisticians
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Confidence Intervals
Bell Curves
Z Score
P Value
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Bell Curve
CONFIDENCE INTERVAL
Lower
Actual
Upper
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Bell Curves Intersecting
Package A
Package B
Overlap?
Lower (A)
Upper (A) Lower (B)
Upper (A)
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Acquisition Testing Report
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Appeal Testing Report
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Package Testing – For Everyone Else
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9 times out of 10 the result will be the same
Lower and Upper Bounds
Best Case/Worst Case Scenarios
Overlap
Which metrics to consider depend on goals of
the test
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Budget Forecasting
Cash flow Forecasting
Multi-year Forecasting
FORECASTING ANALYTICS
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Budget Analysis
• Question: “Based on where I am today in my
fiscal year cash flow and how campaigns have
been performing, where am I going to end the
fiscal year.”
• Approach: Combining current cash flow to
date along with a forecast of “active”
campaigns gives an excellent real-time
approximation of total fiscal year revenue.
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Budget Analysis: Tools
• Campaign Budgets: All TM, DM, Web, etc.
budgets with expected outcomes.
• Predictive Flow: using different tools for each
channel flow out budget (i.e., DM would use a
standard days out).
• Estimation of Carry In/Carry Out: Based on
timing of prior FY campaigns how much
revenue will be “carried into” this FY. Same
for current FY Campaigns.
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Budget Analysis: Results
DM
Acknowledgments
Acquisition
Monthly Giving
Lapsed
Renewals
Total DM
List Rental
Whitemail
Total Whitemail/List
Restricted (-)
Grand Total
FY12 Budget
Diff
FY Thru 9
$83,400
$78,950
$78,960
$80,670
$79,980
$401,960
$79,140
$8,095
$87,235
-$824
$488,371
$548,100
($59,729)
Proj 10
$9,530
$8,100
$8,600
$9,150
$8,200
$43,580
$9,310
$884
$10,194
-$91
$53,683
$60,900
($7,217)
Proj 11
$9,610
$9,370
$8,110
$8,820
$8,510
$44,420
$9,860
$831
$10,691
-$83
$55,028
$60,900
($5,872)
Proj 12
$9,760
$8,140
$9,510
$8,380
$9,340
$45,130
$8,510
$906
$9,416
-$81
$54,466
$60,900
($6,435)
EOY Proj
$112,300
$104,560
$105,180
$107,020
$106,030
$535,090
$106,820
$10,716
$117,536
($1,078)
$651,548
FY Budget
$120,000
$120,000
$120,000
$120,000
$120,000
$600,000
$120,000
$12,000
$132,000
($1,200)
$730,800
Diff
($7,700)
($15,440)
($14,820)
($12,980)
($13,970)
($64,910)
($13,180)
($1,284)
($14,464)
$122
($79,252)
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Forecast Analysis
Question: “Recent performance metrics are soft
compared to last year, how is recent
performance going to affect my fiscal year
budget.”
Approach: “Look at recent cash flow trends
based on which campaigns are active and use
tools to forecast the remaining months.”
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Forecast Analysis: Tools
• Historical performance by day.
• Time-series analysis to utilize recent trends
along with historical performance to predict
outcome.
• Create several forecasts based on assumptions
of environment changes.
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Forecast Analysis - Results
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Multi-Year Forecasting
• Question: “Determine the baseline scenario of
business models based on declining performance.”
– Analyze what investment levels are realistic given current
trends in each business model
• Approach: “Establish benchmarks for growth in each
program areas including investment levels, return on
investment targets, donor return rates, retention
targets, donor conversion, and upgrading targets, etc.”
– Identify the donor segments of greatest value to guide
investment decisions.
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Multi-Year Forecasting - Tools
• Segment the file into the investment channels
(i.e., DM acquisition, Web Ads, F2F, etc.)
• Estimate performance of the new acquisition
channels based on the investment.
• Use historical activation, retention and
upgrading measures to predict future donor
value.
• Create scenarios based on modifications of
investments or changes in the base file.
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Multi-Year Forecasting - Results
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Thank you!
Jim Emlet
Bryan Evangelista
Principal
202-452-9732
[email protected]
www.integral-dc.com
Account Supervisor
202-296-9660
[email protected]
www.lautmandc.com
Direct Marketing 201