Category Archives: Analytics Case Studies

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Environmental Defense Fund

How to leverage a donor’s lifecycle to improve performance

The challenge

Founded in 1967, Environmental Defense Fund (EDF) works to solve the most critical environmental problems facing the planet: climate, oceans, ecosystems and health. Guided by science and economics, EDF finds practical and lasting solutions to the most serious environmental problems. Since the problems span multiple biospheres, EDF’s solutions take a multidisciplinary approach, working in concert with other organizations—as well as with business, government and communities—and avoiding duplicating work already being done effectively by others. Over the years, EDF has brought a series of innovations to the work of protecting the environment.

As a Russ Reid client since 2010, we have partnered with EDF in developing the strategy and creative for their direct mail program. One of the unique aspects of EDF’s direct response program, and program staff, is that they encourage a robust testing approach, providing us with the opportunity and enthusiasm to apply and understand the impact of the latest findings across the direct response industry and within the disciplines of neuromarketing and decision science, understanding why donors make the decisions they do and how we can leverage them.

For this particular effort, EDF and Russ Reid wanted to understand how a donor’s tenure with the organization would impact their Membership Renewal performance, if we were to message to them in targeted ways.

Industry research suggests that what motivates a donor to give to a specific organization varies based on their history with the organization; that a donor’s tenure (or lifecycle) will impact what they want to hear – and what they will respond to. The studies
suggest:
• Donors in their First Year want to see a personal appeal with high readability; to
feel good about how the organization will use their donation
• Donors in their Second Year want to feel good about what the organization/they
are doing; that it’s a trustworthy organization
• Donors in their Third Year want to know that the organization uses their financial
resources wisely; to see how money is applied.

Russ Reid solution

In 2013, we implemented a Donor Lifecycle messaging track within EDF’s annual renewal series. We introduced this test in the 5th renewal notice, of a total of 8 mailed notices, because that was the point where we started to see renewal performance fatiguing year‐over‐year. The purpose of this test was to understand the impact of variable copy – copy that speaks directly to what we expect the donor to respond to based on their lifecycle with the organization – on Renewal performance.

Here is a sample of the variable copy we provided to donors in their Second Year with EDF.

EDF

You’ll see that, especially in the side bar, we’ve included copy that helps a donor feel good about EDF, their role and the support they’ve provided. This Donor Lifecycle track was maintained as a ‘closed‐class’ throughout the balance of the renewal series with donors only being removed from the class once they made a renewal gift.

Outcome

The Donor Lifecycle messaging outperformed the control copy across all lifecycle groups and renewal notices, generating slightly more revenue overall than the control.

For the First Year donors this was driven primarily by response with a 24% increase in response rate. For the 2nd and 3+ year donors this was due to an increase in average gift, with as much as an 11% increase.

Next steps will include retesting this messaging within a larger population, and to understand if the results are specific to Renewals or if they could also be applied to other program offers and channels.

russ reid paralyzed veterans of america case study

Paralyzed Veterans of America – Analytics

Transforming donor behavior from product‐based transactions to mission‐based giving

The challenge

Founded in 1946, Paralyzed Veterans of America is a congressionally chartered veterans service organization that has developed unique expertise on a wide variety of issues involving the special needs of its members – veterans of the armed forces who have experienced spinal cord injury or dysfunction. PVA uses their expertise to advocate for quality health care, research and education, benefits for members’ as a result of military service, civil rights and opportunities to maximize independence.

PVA established a low‐dollar, high response premium‐based direct mail program roughly 40 years ago. On the whole the program is quite successful with personalized labels, calendars, cards and other specialty premiums generating 8‐10% response rates across the renewal program. In FY12, PVA’s Premium Program generated $67MM from over 5MM donors. However, increased costs and the relative difficulty of upgrading $10 donors, the core of file, has translated to cost of fundraising climbing to unacceptable rates.

Russ Reid solution

Our challenge is to improve program performance and lower the cost of fundraising of this colossal, mass mail marketing program by identifying, cultivating and messaging key affinity and value groups that to date have been buried within the file and messaged only based on product responsiveness and/or gender.

Using demographic overlay data along with giving history, we were able to identify several sub‐segments of the file including donors who are identified as giving to veteran’s causes and, more powerfully, hose with a veteran in the household. Analysis showed donors with Veteran‐related affinity (over 3MM on file) had a 71% higher retention rate than all others and, in turn, higher value. Back‐end analysis of key campaigns also showed directional information regarding messaging and interests. For example within this newly defined segment:

•    ‘Vintage War Plane’ artwork generated an 82% higher lift in response than ‘Rockwell Art’ the proven, longstanding control

•    A non‐premium ‘Mission‐Able’ offer focused primarily on PVA’s mission generated virtually the same response rate as a product/premium offer to Male Veterans Affinity donors

Given this data and our long‐held knowledge that if we appeal to donors with resonant messaging in words, graphics and offers we will increase engagement, loyalty and value, we’ve constructed the basis of a Veteran’s Track, which includes the following:

•    Full cycle of campaigns based on qualifying RFM, etc.

•    6‐8 highly targeted campaigns/offers to include more mission‐based language, patriotic words and images and as in the ‘Vintage War Plane’ test, additional military‐based imagery

russ reid analytics case study

Outcome

This year‐long test is still underway with panels of Veterans Affinity flagged names receiving the control offers (premiums, with targeted imagery based on gender) to compare against the new treatment.

Our anticipated outcomes include the establishment of a new Veterans Affinity Track replete with targeted messaging, unique contact cadence, treatment and metrics of success. We believe that, ultimately, track treatment will be a blend of premiums/ products like the calendars and cards as in the current program, along with more paper‐ based mission offers akin to ‘Mission‐Able’. All messaging will be focused on patriotism, service, honor and PVA’s mission to help paralyzed veterans.

russ reid kcet

KCET – Sustainer File Strategy

How audience refinement strategies have grown KCET’s sustainer file

The challenge

KCET – the largest independent nonprofit public television station in the country – came to Russ Reid at a time when they were on the brink of breaking away from PBS and were making programmatic changes at the organizational level, in their line‐up of TV programs and in their fundraising programs. One of their main needs was to rebrand their fundraising program to show the new direction of the organization.

KCET had suspended acquisition for a year, so it was imperative that they make significant improvements in their conversion programs – while also making considerable cost improvements.

Prior to Russ Reid, KCET had been sending the sustainer invite to members in specific months of their membership cycle who had specifically indicated that they did not want to receive any add gifts and/or only one renewal effort (out of a typical multi‐effort series).

This amounted to only 150 invites a month with a sub‐par response rate, and a high cost per donor, as they weren’t mailing enough pieces to qualify for nonprofit postal rates, and their original sustainer package was very exclusive and had a high‐end look.

So our key objectives were to:

  • Increase sustainer conversion
  • Rebrand the package to reflect the new direction
  • Save on costs

Russ Reid solution

We dug deep into the current audience selection and segmentation, and after researching potential prospect pools, we determined the members with the highest propensity to convert to sustainers were those who had just joined the organization, renewed or rejoined, having just affirmed their commitment to KCET.

This new audience increased the mail quantity by 87 times! This new quantity immediately saved on costs, as the invites could now qualify for nonprofit postal rates. More importantly, this change increased percent response by 300% and doubled the number of sustainers on the file!

Subsequently, having proved that this new audience was viable, our next step was to redesign the package in a way that reflected the right brand and positioned the sustainer program in a brand new way that would make it more compelling to donors. This new package yielded comparable results – and saved KCET 84%!

Russ reid analytics case study

From FY10 to FY12, the audience strategy remained the same. Additionally, KCET has been managing follow‐up telemarketing campaigns to all donors who receive the direct mail package through their preferred telemarketing partner, achieving high conversion rates that complement our mail efforts.

In FY13, we tested a new audience strategy to mail donors on a quarterly basis, expanding our segmentation selection. Additionally, we redesigned the creative to mirror our show‐focused strategy, which had proven positive on all mail programs. With one sustainer campaign final, we’ve increased conversion by 48%.

Outcome

In FY10 this approach decreased cost by 84%, increased percent response by 300%, increased number of sustainers by 68% and increased ROI by 438%.

When retested in FY13, sustainer conversion increased by 48%.

Next steps for KCET include culling through their data to determine if moving the sustainer ask further out in a donor’s membership cycle will garner a larger conversion rate.

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American Red Cross – Enhanced RFM

Turning a problem into a growth opportunity

The challenge

What do you do when you have a unique donor audience that is highly compassionate yet primarily motivated by emergency response?  How do you get these donors to respond to the perpetual need consistently? What if Recency, Frequency, and Monetary (RFM) segmentation strategy best practices aren’t enough to optimize this audience?

Russ Reid solution

What did we do? We turned a problem into a growth opportunity.

In an effort to enhance the American Red Cross direct mail program, we identified the solution within their RFM strategy.  It needed a little something extra, so we expanded the segmentation criteria and created “R-L-M.”

R-L-M combined loyalty score modeling with recency and monetary gift history to produce a successful new segmentation strategy.  The loyalty model assigned donors 1 of 7 scores based on a donor’s relative giving behavior to the Red Cross compared with other organizations, providing a clear understanding of which donors have the strongest affinity to the Red Cross.  Additionally, we focused on a new data point in order to determine true gift recency and monetary potential: the donor’s last non-disaster gift.  By reclassifying disaster-related giving and focusing on non-disaster gifts, we effectively transitioned the communications for disaster-focused donors from standard renewals and enhanced the RFM strategy to focus on committed donors’ ongoing support, unlocking both audiences’ optimum giving potential.

Outcome

When comparing FY12 to FY13 results, the R-L-M strategy effectively:

  • Increased response rates by a dramatic 59%
  • Mail quantity reduced by 14%
  • Cost to raise a dollar dramatically declined by 42%
  • Net yield per thousand sharply increased by 103%

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View a downloadable PDF of this case study.

 

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Optimizing gift catalogs

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Optimizing Giving Catalog revenue from an analytics approach

The challenge

Many nonprofit organizations – such as World Vision U.S., World Vision Canada, American Red Cross, Operation Smile, and St. Jude Children’s Research Hospital – have employed direct mail and ecommerce gift catalogs to diversify their donor portfolio and partake in a different share of wallet, especially during the holiday season. Russ Reid has helped these organizations build their gift catalogs into a highly successful fundraising channel through strategic investment, testing and analytics, including square-inch analysis, or SQUINCH. Many catalogs have seen continued growth in a time when other fundraising channels have taken a hit with the economy. This analytics-based approach can significantly improve an existing product without additional expense.

Russ Reid solution

Russ Reid takes a data-driven approach to help guide our strategy. SQUINCH is one of the tools available in our arsenal, as it takes product-level results and seeks to determine the relationship between the space allocated to a product and its corresponding revenue. This analysis reduces all products to a common denominator and indicates whether income is above or below average on a per-product, per-page, per-spread and per-category basis.

Through SQUINCH, we can identify which products should be removed from the catalog (or moved to a different page), which ones should be given more real estate, and which ones can stay just as they are. These findings help inform our strategy and creative direction, and the same analysis is performed year after year for ongoing optimization.

Outcome

Through rigorous analytics, we can continually refine and optimize catalogs to achieve incremental growth year over year. One organization in the international relief and development sector first implemented SQUINCH in 2009 and saw staggering immediate results:

  • Total revenue increased 25%, including a 32% increase in acquisition revenue
  • New donor acquisition increased by 44%

Additionally, their catalog has seen continued growth each year, with total revenue increasing 58% from 2009-2012. New donor acquisition has doubled over the given time period. By incorporating SQUINCH into the solution, gift catalogs can be constantly refined to achieve continued impact.