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A Nonprofit Perspective on The Forrester Wave™: Customer Insights Services Providers, Q4 2015

The pace of change in the nonprofit industry is accelerating, and we all struggle to keep up with the advances in technology and marketing best practices. Good market research is scarce in the nonprofit industry, I wanted to share a report Forrester Research released last week that  evaluates providers in order to help organizations (commercial and nonprofit) select the right partner for their database operations and/or customer engagement strategy needs.

Forrester released its Customer Insights Wave™ agency evaluation on November 10, 2015. In the report, Merkle was named a leader in Marketing Database Operations and a strong performer in Customer Engagement Strategy. Merkle earned top scores in strategy.

I’ve seen plenty of larger charities tackling this topic in earnest in 2015, and share the report with the hope that it is helpful for your own efforts to build a great program.  

So why read THIS report?

In my experience, there are marketing agencies that provide pieces and parts of the Customer Insight services, but few that provide the full service for building a donor-centered fundraising program. This report only includes agencies that do it all. So this is rare glimpse of a unique group of partners.

What is the Customer Insights Wave report?

Forrester evaluated and ranked firms that provide Customer Insights (CI) services.  For Forrester, CI agencies help companies/organizations with the following:

  1. Data & Databases: Marketing data sourcing/appending, Database hosting & management, and marketing database technology.
  2. Marketing Services: Customer strategy (segmentation, profitability analysis, lifecycle management), advanced analytics, creative, journey mapping, media planning & buying, and business strategy.

As you can see, that definition is broader than it initially appears in that it extends beyond analytics and insights to include the full complement of database and marketing (fundraising) services. 

Stated differently, these agencies help brands solve strategic efforts such as the following:

  1. Create a single view of the customer
  2. Create a more consistent customer experience across channels
  3. Use insights to inform all areas of the business
  4. Manage marketing technology
  5. Measure customer value

What did the report say?

First, Forrester shared some key takeaways from the report including:

1. Calling Yourself a Customer Agency Doesn’t Make You One

Many agencies have linked themselves to this category, but only 11 firms identified by Forrester have the capabilities that Forrester considers critical.

2. Marketers Buy Customer Insights for Two Sets of Needs

When it comes to getting help from a Customer Insight services provider there are two services normally requested – marketing database operations and customer engagement strategy.

3. Leaders Vary by Scenario

Forrester applied two sets of weightings to its criteria to determine if some vendors strengths made them a better choice for one buying scenario or the other.

How Will this Help Nonprofits?

There are a couple of reasons this is important to nonprofits:

1. Relevant Services Necessary to Success 

The services from the agencies evaluated in this report are increasingly important to nonprofits today. In my experience, the top charities in the US are embracing the idea of putting the donor (customer) at the center of their direct marketing. It’s still pretty new, but they are building program-wide donor segments, constructing donor journey maps, building a single view of the donor in an integrated marketing database, deploying multi-channel campaigns, buying advanced marketing automation software, and more generally building integrated fundraising programs.  But interestingly, one of the findings provided by Forrester is that 89% of references from firms in this research don’t fully integrate customer intelligence into their business, and most rather rely on service partners for basic database blocking and tackling.

2. Nonprofit Lens

The agencies included here have variable levels of commitment to the nonprofit sector, so regardless of their ranking, not every agency could do work for your organization.  Merkle’s nonprofit group — 75+ people — has been working with nonprofits since Merkle’s inception in 1988, and we are providing the services listed in the Forrester report to nonprofits.

There is a lot to sort out when it comes to the next generation of nonprofit direct marketing and donor-centric fundraising. A good first step is finding the right partner to help, and Forrester has done good work in helping with this choice.

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