scoring big: do-it-yourself recency, frequency, and...

Scoring Big: Do-It-Yourself Recency, Frequency, and Monetary Scoring &

Analytics for The Raiser's Edge PRESENTED BY

JOSHUA BEKERMAN, bCRE Information and Technology

Services Manager American Indian College Fund

STEVE BESHUK Director

Business Intelligence Group JCA

Session Goals • Encourage data-driven decision making • Illustrate the tools (and science) you can

use to DIY • Motivate you to continue at home

When you cannot express it in numbers, your knowledge is of a meager and unsatisfactory kind…

- Lord Kelvin, British Physicist

Do It Yourself RFM Scoring

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Tools • The Raiser’s Edge • MS Excel • MS Access • Crystal Reports • SQL Server

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RFM • Recency

• When was the last time they donated?

• Frequency • How often and for how long have they donated?

• Monetary • How much have they donated?

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Recency • When was the last time they donated?

• RE = Last Gift Date

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Gave in last 12 months 20 Gave 13-24 months ago 15 Gave 25-36 months ago 10 Gave 37-48 months ago 5 Gave 49-60 months ago 2 Gave more than 60 months ago 1 No giving 0

Frequency • How often and for how long have they donated?

• RE = First Gift Date & Last Gift Date

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Multiplier 20+ years 3.0 15 – 19 years 2.5 10 – 14 years 2.0 5 – 9 years 1.5 < 5 years 1.0 No giving 0

Frequency • How often and for how long have they donated?

• RE = Summary Information – Total number of Gifts

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# Gifts/# Years 100% 10 90 – 99% 8 80 – 89% 6 70 – 79% 4 60 – 69% 2 < 60% 1

Frequency • How often and for how long have they donated?

• RE = First Gift Date & Last Gift Date

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Multiplier 20+ years 3.0 15 – 19 years 2.5 10 – 14 years 2.0 5 – 9 years 1.5 < 5 years 1.0 No giving 0

Monetary • How much have they donated?

• RE = Largest Gift Amount and Total Giving

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$5,000+ largest gift 25 $2,000 - $4,999 largest gift 15 $1,000 - $1,999 largest gift 10 $500 - $999 largest gift 5 < $500 1 No giving 0 $20,000+ total giving 25 $10,000 - $19,999 total giving 15 $5,000 - $9,999 total giving 5

Largest Gift

Total Giving

Export to Excel

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Recency Create formula in Excel – Final R Score =(YEAR(NOW())-YEAR(C2))*12+MONTH(NOW())-MONTH(C2) =2014 - (Year of last gift) x 12 + 9 – (Month of last gift)

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Recency

• =IF(AND(E2>=1,E2<13),20,(IF(AND(E2>=13,E2<=24),15,IF(AND(E2>=25,E2<=36),10,IF(AND(E2>=37,E2<=48),5,IF(AND(E2>=49,E2<=60),2,IF(E2>60,1,0)))))))

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Gave in last 12 months 20 Gave 13-24 months ago 15 Gave 25-36 months ago 10 Gave 37-48 months ago 5 Gave 49-60 months ago 2 Gave more than 60 months ago 1 No giving 0

Create formula in Excel – Final R Score

R Create formula in Excel – Final R Score

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Frequency Determine Multiplier: Calculate # years – Calculate Multiplier

• RE = First Gift Date & Last Gift Date

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20+ years 3.0 15 – 19 years 2.5 10 – 14 years 2.0 5 – 9 years 1.5 < 5 years 1.0 No giving 0

Frequency Determine Multiplier: Calculate # years – Calculate Multiplier

• =YEAR(C2)-YEAR(B2)

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Frequency

• =VLOOKUP(I2,Frequency!A:B,2,FALSE)

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20+ years 3.0 15 – 19 years 2.5 10 – 14 years 2.0 5 – 9 years 1.5 < 5 years 1.0 No giving 0

Determine Multiplier: Calculate # years – Calculate Multiplier

Frequency Gifts per Year: Calculate Gifts/Year – Determine Gifts/Year Score

• =(H2/I2)*100

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Frequency Gifts per Year: Calculate Gifts/Year – Determine Gifts/Year Score

• =IF(AND(J2>=0,J2<59.99),1,(IF(AND(J2>=60,J2<=69),2,IF(AND(J2>=70,J2<=79),4,IF(AND(J2>=80,J2<=89),6,IF(AND(J2>=90,J2<=99),8,IF(J2>99,10,0)))))))

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# Gifts/# Years 100% 10 90 – 99% 8 80 – 89% 6 70 – 79% 4 60 – 69% 2 < 60% 1

Frequency Create final F score: Gifts/Year * Multiplier

• =K2*L2

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Monetary

• RE = Largest Gift Amount and Total Giving

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$5,000+ largest gift 25 $2,000 - $4,999 largest gift 15 $1,000 - $1,999 largest gift 10 $500 - $999 largest gift 5 < $500 1 No giving 0 $20,000+ total giving 25 $10,000 - $19,999 total giving 15 $5,000 - $9,999 total giving 5

Largest Gift

Total Giving

Largest Gift Score + Total Giving Score

Monetary

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$5,000+ largest gift 25 $2,000 - $4,999 largest gift 15 $1,000 - $1,999 largest gift 10 $500 - $999 largest gift 5 < $500 1 No giving 0 $20,000+ total giving 25 $10,000 - $19,999 total giving 15 $5,000 - $9,999 total giving 5

Largest Gift

Total Giving

Largest Gift Score + Total Giving Score

Monetary

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$5,000+ largest gift 25 $2,000 - $4,999 largest gift 15 $1,000 - $1,999 largest gift 10 $500 - $999 largest gift 5 < $500 1 No giving 0 $20,000+ total giving 25 $10,000 - $19,999 total giving 15 $5,000 - $9,999 total giving 5

=IF(AND(O2>0,O2<500),1,(IF(AND(O2>=500,O2<=999),5,IF(AND(O2>=1000,O2<=1999),10,IF(AND(O2>=2000,O2<=4999),15,IF(O2>=5000,25,0))))))

Largest Gift

Total Giving

Largest Gift Score + Total Giving Score

Monetary

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$5,000+ largest gift 25 $2,000 - $4,999 largest gift 15 $1,000 - $1,999 largest gift 10 $500 - $999 largest gift 5 < $500 1 No giving 0 $20,000+ total giving 25 $10,000 - $19,999 total giving 15 $5,000 - $9,999 total giving 5

Largest Gift

Total Giving

Largest Gift Score + Total Giving Score

Monetary

• =IF(AND(N2>5000,N2<=9999),5,(IF(AND(N2>=10000,N2<=19999),15,IF(N2>=20000,25,0))))

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$5,000+ largest gift 25 $2,000 - $4,999 largest gift 15 $1,000 - $1,999 largest gift 10 $500 - $999 largest gift 5 < $500 1 No giving 0 $20,000+ total giving 25 $10,000 - $19,999 total giving 15 $5,000 - $9,999 total giving 5

Largest Gift

Total Giving

Largest Gift Score + Total Giving Score

Monetary

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$5,000+ largest gift 25 $2,000 - $4,999 largest gift 15 $1,000 - $1,999 largest gift 10 $500 - $999 largest gift 5 < $500 1 No giving 0 $20,000+ total giving 25 $10,000 - $19,999 total giving 15 $5,000 - $9,999 total giving 5

Largest Gift

Total Giving

RFM

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Import ConsID Category Description Date Comments

2 RFM Score 70.0 10/7/14 3 RFM Score 59.0 10/7/14 4 RFM Score 75.0 10/7/14 5 RFM Score 70.0 10/7/14 6 RFM Score 29.0 10/7/14 7 RFM Score 80.0 10/7/14 8 RFM Score 26.5 10/7/14

10 RFM Score 85.0 10/7/14

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5,15,50 5,15,50 5,15,50

5,15,50

5,15,50 5,15,50

5,15,50 5,15,50

10 R Score 5 10/7/14 10 F Score 30 10/7/17 10 M Score 50 10/7/14

Using the RFM Scores

Be Curious

Create Segments • Analytical Thinking: Aggregate what is

alike and disaggregate that which is different

• Create histogram to evaluate visual breaks

• Use Excel Data Analysis TookPak • How many “bins” should you have?

Histogram • Bin formula, using Josh’s data…

• Max value = 100 • Min value = 0 • Range (Max-Min) = 100 • # Samples (n) = 5079 • # Categories (Sqrt(n)) = 71.2671 • Category width (Range/# Categories) = 100/71.2671 = 1.4 • Adjusted (make it usable) = 2 • Bin width = 2

Histogram • Create two columns in Excel

• RFM scores • Bins

Histogram • Open the Data Analysis Toolpak and

select Histogram

Histogram • Input Range = RFM scores • Bin Range = the column you created • Select Chart and Cumulative Percentage

and select OK

Histogram

The Data Suggest Three Groups • Group1: RFM <= 20 • Group2: RFM >20 and <= 30 • Group3: RFM > 30

Now how do we treat them?

Using Segments: Testing • Ways to test

• Guess–build–test–fix • a.k.a. tinkering

• A/B test • Change one factor at a time

• Design of Experiments (DOE) • Formal method for systematically testing changes • Test multiple changes at once • Tests the change itself and the interrelatedness of the

changes

DOE Four Steps 1. Design the experiment 2. Collect the data 3. Analyze the results 4. Conclusion and recommendations

Design the Experiment • Testing three factors

• 0 = current • 1 = experimental

Experiment Envelope Premium Signature 1 0 0 0 2 0 0 1 4 0 1 1 5 1 0 0 6 1 0 1 7 1 1 0 8 1 1 1

Design the Experiment

Experiment Envelope Premium Signature 1 0 0 0 2 0 0 1 4 0 1 1 5 1 0 0 6 1 0 1 7 1 1 0 8 1 1 1

Despite running only half of the experiments, we tested every possible combination!

Prem

ium

1 Expt4 Expt7 0 Expt1 Expt6

0 1 Envelope Si

gnat

ure 1 Expt4 Expt6

0 Expt1 Expt7 0 1 Envelope Pr

emiu

m 1 Expt7 Expt4

0 Expt1 Expt6 0 1 Signature

Design the Experiment • Randomly assign members of each

segments to one of the four experimental groups

• Create the appeal and package codes • Send it

Collect the Data

Experiment Envelope Premium Signature Avg. Gift

1 0 0 0 $200 2 0 0 1

4 0 1 1 $215 5 1 0 0

6 1 0 1 $265 7 1 1 0 $250 8 1 1 1

Analyze the Results

Experiment Envelope Premium Signature Avg. Gift

1,4 0 0.5 0.5 $207.50 6,7 1 0.5 0.5 $257.50

Effect of Envelope = $ 50.00

Experiment Envelope Premium Signature Avg. Gift 1 0 0 0 $200 4 0 1 1 $215 6 1 0 1 $265 7 1 1 0 $250

Average of Envelope for exp. 1 & 4

Premium and Signature are equal, they are “held constant” – so the

difference is the effect of Envelope

Average gift amount for exp. 1 & 4

Analyze the Results Experiment Envelope Premium Signature Avg. Gift

1,4 0 0.5 0.5 $207.50 6,7 1 0.5 0.5 $257.50

Effect of Envelope $ 50.00

Experiment Envelope Premium Signature Avg. Gift

1,6 0.5 0 0.5 $232.50 4,7 0.5 1 0.5 $232.50

Effect of Premium $ -

Experiment Envelope Premium Signature Avg. Gift

1,7 0.5 0.5 0 $225.00 4,6 0.5 0.5 1 $240.00

Effect of Signature $ 15.00

Conclusions and Recommendations • You have the quantified effects… • …make data-driven decisions

• Envelope had the biggest effect, how much did it cost? Was the return worth the investment?

• Premium had no effect, cut back on it. • There was a modest improvement in hand-signed signatures,

was it worth the cost?

• How did the RFM scoring perform?

Follow-Up If you would like a copy of a simple DOE spreadsheet…

Leave a card or email me steve.beshuk@jcainc.com

Questions?

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Don’t forget to complete a session survey! Each completed survey enters you into a drawing to win a complimentary registration to bbcon 2015 in Austin, Texas*.

*Blackbaud reserves the right to change or withdraw this promotion at any time, without advance notice. Promotion has no cash value and may not be exchanged, applied to, or combined with any other offer.

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