Nonprofit Tests Modeling Tool to Bring in More Money
Looking for ways to increase response rates and lower the cost of its direct mail program, World Vision recently tested a new customer analysis modeling tool that showed it could raise the same revenue with half the mailing.World Vision, Federal Way, WA, provides relief for the poor in 103 countries and conducts close to 25 direct mailing appeals a year along with two acquisition mailings totaling nearly 3.5 million pieces. The 50-year-old nonprofit organization has an active donor base of 2 million, 500,000 of whom take part in its children's sponsorship program, and raised $165 million through its fundraising and child-sponsorship programs last year.
The software, dbProphet 3.2c, is its third version.
"The technology was not designed specifically for nonprofit organizations," said Bart Knaggs, vice president of marketing at Trajecta, Austin, TX, the consumer research firm that developed dbProphet, "but it can be beneficial to anyone doing a lot of direct or database marketing in that it can predict who the best possible donors will be. And it helps eliminate the cost of mailings being sent to nondonors." The results are based on composite data and cause and effect "between what people are like and what they'll do."
Using dbProphet, World Vision developed two models and ran back-end tests comparing them with two fully mature mailing appeals sent out in January. The first model compared the names that responded to the first mailing with the names that dbProphet predicted would respond. It found that 86 percent of the response rate could have been achieved by only mailing 50 percent of the file.
The second model was run against an appeal mailed out later that month. World Vision acted as though the appeal had never taken place and ran all of the names mailed through the software. Of the names the system said would be most likely to respond, 87 percent did.
"The results from the models made us confident enough to base a large portion of our next cultivation appeal, which was mailed in March, on what dbProphet was telling us," said Tom Cruse, manager of research and decision support at World Vision.
Results from the March cultivation have not yet matured.
"Organizations are always looking for a way to better allocate their expenses," Cruse said. "We believe this technology will help us not only reduce our mailing expenses and target the best potential donors, but provide us with information to mail to areas and people we normally wouldn't. We are looking to use this as an efficiency thing right now."
