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What Is The Role of Modeling and Multi-Channel Data In Fundraising Today?

Merkle’s Yanni Kotziagkiaouridis, vice president & analytic practice lead, was recently interviewed about his opinion on modeling for nonprofit CRM. I thought his responses were noteworthy and wanted to share them here.

When thinking through all the challenges the nonprofit industry is facing these days, where do you think modeling can be the most helpful?

Digital media and channels have increased the complexity of how constituents are consuming information and making decisions.  To be successful, nonprofits need to understand the impact of their fundraising activities and use that information to allocate their budgets in creating relevant constituent experiences.  Modeling plays a key role on every single step of this process:

  • Probabilistic attribution allows for an understanding of the complex relationships across media and channels.
  • Forecasting and optimization (scenario planning) allow for a better distribution of marketing resources.
  • Targeting and segmentation allow for the understanding of audiences and the creation and delivery of relevant marketing experiences to the most valuable segments. 

Do you think modeling is underutilized by the industry and if so, why do you think that’s the case?

Nonprofits have been successful with using modeling for targeting communications and getting a better understanding of their constituents.  The opportunity we see today is for nonprofits to utilize advanced statistical techniques to better understand the impact and interaction of all their marketing activities, offline and digital, and attribute to them a proportion of the credit for the final desired outcome. The result is better future distribution of marketing spend.   Unless organizations better understand multi-channel interactions, there is little they can do to optimize them. We will cite the inability to connect offline and digital behaviors at the constituent level and the constraints of internal data and technology integration, which are present across industry sectors, as the major factors that prevent organizations from maximizing the potential of modeling.  

How is modeling able to inform the movement to true integrated, multi-channel marketing?

The ability to connect data across “silos,” and especially the offline and digital connections at the constituent level, are the key enablers of true integrated multi-channel marketing.  Traditional modeling techniques have focused on optimizing targeting in a silo; for example, direct mail or email. With the explosion of dimensionality of media and channels the key is to start with the ability to better attribute fundraising outcomes across channels and their interactions and use that understanding as the basis to optimize targeting and marketing spend.  The question has transformed from one that seeks to understand “who is the best person to talk to with direct mail?” to “what is the optimized mix and sequence of personalized experiences we need to deliver to achieve the marketing and business outcomes desired?”

What is the future of modeling for fundraising – what’s on the horizon?

Constituents are, above all, consumers. And there is a multi-billion dollar commercial industry that is aggressively spending to better understand their needs and anticipate their all-important “next move.” We believe that this will have a profound impact on the nonprofit world. Nonprofit organizations that manage to deliver the Zappos or Amazon experience to their donors have a better chance of succeeding in this new world. This is because they better understand who their constituents are, predict what drives emotional connections and can communicate with relevance and consistency across media, channels and devices to deliver their mission statements.

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