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| Path: Main Street : Resources & Library : Research Articles : Feature Article |
Databases can help build donor relationshipsAugust 15, 1995; Canadian FundRaiser
Database marketing technology now makes it possible to bring personal service to every donor, according to Alain Harari, president, Canada Direct. Speaking at an NSFRE Fund Raising day, Harari described different ways to cultivate better relations with customers, volunteers, donors, members, participants and sponsors.
"Relationships involve an exchange of value, and what non-profits sell is 'feeling good' and a sense of accomplishment. That's their product," Harari said. However, charities need to be able to capture, translate and communicate those feelings.
Customers must be understood, nurtured and listened to, said Harari. "If you're carrying on a dialogue with another person, you'll be much more interesting to that person if you listen to, and respond to, what he or she has to say." Effective relationship marketing leads to a higher percentage of satisfied customers, greater customer loyalty, a customer perception of being offered better quality products and, yes, increased profits.
A nonprofit must find out who its core 20 per cent of donors are so that it can better meet their needs, he said. Harari divided customers into three groups: 'Growings' --- the core market; 'Growables' --- or customers in waiting; and the 'other 80 per cent'. "No number of satisfied 80 per centers can make up for the cost-effectiveness of profits derived from serving the 20 per centers," he noted.
According to Harari, relationship marketing is based on discovering donor differences and adapting marketing strategy to fit the needs of smaller clusters --- i.e. affluent, middle class and blue collar workers; lifetime savers; materialists; armchair seniors; etc. He explained the following techniques:
To give your donors superb customer service, knowledge is power, said Harari. "The day of the 'Dear Friend' letter is dead! As competition increases, dollars available to charities shrink, and fundraisers fight for the same piece of the pie. Those who know how to master information and apply the knowledge they have learned will achieve their goals.
- Segmentation: the identification of customers by how recently, and how frequently, they gave, as well as by the size of donation.
- Predictive/Profile Modelling: learning about a representative sample of customers, and using that knowledge to predict which other customers are the most likely prospects.
- List Enhancement: continually adding data to established lists to increase understanding of each customer within the database.
- Event-driven Communications: using the database to create marketing communication based on events in the life of the customer, i.e. birthdays, anniversaries, etc.
- Lifetime Value Analysis: weighing the cost of gaining a customer against the potential returns that can be generated from that customer over a lifetime of gifts.
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