“It is a capital mistake to theorize before one has data.” – Arthur Conan Doyle
Retailers understand the value of relationships and they use data to personalize their interactions with you. And it works.
Major companies invest significant resources collecting and analyzing data for the purpose of improving the way they interact with their customers. Amazon suggests products based on your browsing and purchasing histories. The big box home improvement stores use your location to tell you where you can get the item you are viewing on the screen. Grocers use the data collected through their rewards programs to send coupons based on the items you purchase.
Today, nonprofit leaders are starting to recognize the opportunity big data can provide. However, many organizations are still having a big problem with big data.
How can your organization begin to leverage big data as a way to improve your fundraising strategy? The first step is to realize that it’s one thing to gather data; it’s another to know how to use it.
3 Questions Every Nonprofit Should Ask About Data
In order to get the most out of the data you collect, here are three questions you should ask:
- What data are you gathering from your donors beyond tracking their most recent donation, the frequency of their donations, the monetary value of each transaction, or how much they can give? Almost every nonprofit organization records the giving data of their donors. Some are beginning to use marketplace data like wealth screening. However, the real secret to leveraging data for fundraising success is being able to take those two data points and connect them with observation data that analyzes the behavior and interests of your donors.
- Are you leveraging your current donor analysis to drive your donor engagement strategy? The first question is the discovery phase of the relationship building process. The second question is the action phase. You must use what you learn to establish a personalized strategy for cultivating a long lasting relationship. The more personal the relationship, the more loyal the donor will be.
- Are you optimizing your donor engagement strategy toward more personal relationships? In the resource, “The Future of Fundraising,” Curt Swindoll predicts that in the coming years, “Nonprofits will engage donors face-to-face at every giving level through advances in technology.” The way you interact with a first-time donor should be significantly different than how you interact with a multi-year donor, but no less human. The data you have for each donor should enable you to use new forms of digital face-to-face communications to engage your donors on a more personal level.
Making strategic decisions based on what you know about your donors is a key component of building a relationship with them. Today, successful fundraising requires a commitment to doing everything possible to learn all you can about your donors so you can be more effective in your communication and solicitation. The first step is to analyze your data. Learn what you know and what you don’t know. The next step is to act upon it.