There are many reasons that a donor may neglect to contribute from one year to the next. For some, it may merely be a matter of forgetting to send the check. These donors would gladly resume their contributions with the help of a little reminder. For others, however, these tough economic times have taken a toll, making them unable to be as generous as they would like. When targeting lapsed donors for reactivation, nonprofits need a way to determine who, exactly, their best prospects are so that they don't waste valuable advertising dollars sending out mailers to those who are unable to give.
A major nonprofit health organization ran into this problem when they found themselves holding a lapsed donor file that contained over 6 million names. Obviously, sending direct mailers to each of the 6 million was out of the question. Not only would such a mammoth undertaking be too expensive, but it also would not have been the most productive strategy, as most of those names, especially those who may have been one-time donors, would probably be unable to resume their contributions. The health organization needed a way to weed out the most likely prospects from those who were not likely to resume their status as active donors.
Soliciting donations for nonprofits and charitable ventures is a competitive undertaking, not only because of the tight economy, but also because of the approaching holiday season. Individuals are tightening their purse strings so that they'll have more to spend on gifts for friends and loved ones, meaning many nonprofit organizations will be presented with a greater challenge in both reactivating donors and convincing them to increase the amount of their gift contributions.
The health organization knew that, typically, a lapsed-donor pool is a goldmine of opportunity for nonprofits when it comes to mail campaigns, but that the proper targeting of these pools is doubly important. In the past, they had sent out random mailers that had proven to be ineffective. The mailers did not produce the acquisition rates the organization was hoping for and led to thousands of wasted advertising dollars. In order to run an effective direct mail campaign, they needed a way to effectively target the donors who were in the best position to give the largest possible donations.
By using Semcasting Modeling Software, Semcasting, Inc. was able to help the health organization by creating predictive models based on patented genetic algorithms that examine hundreds of demographic variables in order to improve the organization's targeted direct mail campaigns to lapsed donors. After analyzing the resulting data, they revealed new segments for the nonprofit organization to target and were also able to present new prospects that were not on their current lapsed donor list, but were likely to respond to their campaign. The new prospects were targeted based on their similarity to the organization's existing donors.
The health organization was able to use the targeted list of lapsed donors and new prospects that Semcasting had created in order to both generate a higher response rate from their direct mail campaign and increase the average gift amount per donor. This resulted in a more effective outbound campaign as well as increased cost savings for the organization.
In the end, Semcasting Modeling Software helped the nonprofit execute a direct mail campaign that had an average response rate of three times higher than what had been expected and whose average gift amount per donor increased to $15.75. By targeting its audience more effectively, the organization was able to reach its targeted demographic and still keep its costs down by only mailing to those were likely to respond.