Best Practices: When Modeling Is the Way to Go

In today’s competitive environment, knowing how to strategically leverage data differentiates average from superior direct marketing fundraising programs. From an initial master file analysis, to list ROI analysis, to getting down to the nitty-gritty of modeling which donors are most likely to give, Avalon has developed state-of-the-art analytical tools and expertise to help our clients uncover the actionable strategies within their data.

But how do you know when modeling is appropriate? And how do you persuade your organization’s stakeholders to make the investment?

Modeling is a business decision, based on the long-term view of your organization’s fundraising. Modeling gives you a competitive edge in the mailbox: mailing smarter improves your return on investment and overall long-term donor value, helping you to quantify and forecast future revenue more accurately.

In general, the list market is shrinking, so modeling is the best way to expand what works. Modeling allows you to cut the chaff from the wheat in huge compiled and co-op lists, in order to find those donors who will be most responsive to your message. We all know that targeting works – modeling is simply the most effective way to target prospects and donors.

And it turns out that data techniques are cheaper than other methods of improving response. Adding other data factors beyond list origin makes for more effective mailings, since the front-end costs decrease and the back-end gain is significant. Modeling is the best bang for your buck: reducing your expenses by lowering mail quantities, decreasing your cost to acquire a donor/prospect, and ensuring that the donors you keep and the prospects you acquire have the best long‐term value possible.

So when should you model? The best opportunities are expensive campaigns with low anticipated returns – this would include telemarketing, sustainer invitations, and higher cost appeals. Returns on modeling are particularly impressive in a challenging fundraising climate.

We shy away from modeling when it’s not necessary because returns are already traditionally high – for example, renewal series, tried-and-true blockbuster appeals, and low-cost packages.

When making the case for modeling investments to your decision makers, describe modeling as a way of ensuring a campaign’s success. To see the results of a telemarketing model in action, see our NWF telemarketing case study.

When you can statistically pare down your file – or outside files – to those people who are mostly likely to give at a particular time, or most likely to upgrade, or to become a sustainer, shouldn’t you jump at the chance?