Don’t underestimate the value of clean data; fail to invest, and you risk alienating donors, warns Cathy Sullivan

A colleague recently bemoaned an appeal letter from one of the UK’s largest charities that had arrived at her door addressed to the previous owner – who had moved out 13 years ago!

Next, she received a thank you letter from a charity she supports. Twice. The identical letters arrived on the same day, making her think about how the organisation is wasting the money she’s helping them to raise.

Shortly afterwards, a telephone fundraiser called and greeted her politely, using her full name, only to get her title incorrect. Being a divorcee, it was irritating and did little to set the tone for an engaging conversation.

I wouldn’t be surprised if everyone has their own dodgy data story to tell. Inaccurate data has been a burning issue for some time, and there is much talk about the waste and expense it generates.

Now, consider Royal Mail’s service change coming into force this April. Charities will be liable to pay VAT (that’s a 20 per cent increase in costs) on bulk mailing services, regardless of the weight or quantity of the mailing.

Any unnecessary or inaccurate mailings will cost charities dear. And yet, with increased pressure in the wake of government cuts, the reality is that many have failed to invest in their data.

The cost of bad data

Your data truly affects relationships with existing and potential supporters. Excessive or incorrect mailings will only send out the wrong signals – your organisation will be viewed as both sloppy and wasteful, which can and does alienate donors.

One-sixth of all complaints received by the Fundraising Standards Board in 2010 were related to the poor use of data, while a report released last year from the Read Group indicated that 29 per cent of adults would stop supporting a charity that sent them badly targeted direct mail, and that 15 per cent would stop giving to charities that used obsolete or inaccurate details.

The most beautifully crafted letter or phone script doesn’t stand a chance if it’s communicated to the wrong people. Accurate data, on the other hand, can help achieve lifetime donor value – if you invest in the relationship, you will earn donor loyalty and commitment.

Of course, it is not easy. It’s not uncommon for a charity’s data to be scattered across different spreadsheets and databases – handled in IT silos with no one person taking control. Sometimes there is no central pool of supporter records covering email, mail and phone details, let alone a database that links with the charity’s online and other fundraising efforts – all of which increases the chances of duplications or inaccuracies.

Part of the answer lies in investing in new database systems, reprogramming existing ones, or in quality outsourcing, but these can be complex and costly processes. Those that have invested in technology often don’t factor in the cost of training. Staff are left to just get on with it, massively increasing the risk of human error.

Small talk, big rewards

But it’s not just about the IT – donor recruitment has a part to play too. Charities need to work harder to capture the right data at the outset, be it during a face-to-face conversation, on the phone or through the post. All too often, fundraisers rest on their laurels when they secure that all important ‘yes’ from a donor, and the opportunity to ask more questions to deepen the donor relationship goes begging.

Australia-based agency Pareto Fundraising cites a useful statistic, showing how appeal results can be dramatically improved by knowing just one more fact about your supporters – or in this case, their pets.

The Lost Dogs’ Home uses surveys to gather pet names, which have proved crucial for building relationships both in mailings and in phone conversations with donors. The phone team compared the upgrade success rate of donors they spoke with where fundraisers knew the pet’s name against those where they didn’t. The results speak for themselves: knowing ‘Bilbo’ increased upgrade rates by 43 per cent. This dramatically underscores the inherent value in capturing good data and keeping it clean.

With more than 500,000 people dying in the UK every year, and over six million people moving house, keeping data clean is critical. Industry standards recommend cleaning data on a monthly basis. With the number of cost-effective suppression products available, there is every opportunity to follow best practice and make the most of these tools. For example, if your cleaned data flags up someone who has moved, you could target them with a local campaign. You can also more easily identify missing contact details, saving yourself the embarrassment of the “this person moved out 13 years ago” phone conversation.

With charities facing increased costs, now more than ever it is critical to get your data right. Charities cannot rely on the good will of the public to call and say their details are wrong.

I hope the VAT change encourages charities to strive for the perfect donor record rather than breeding a culture of cutting corners with their data to cope with tightening budgets.

About the author: Cathy Sullivan is CEO of Fundraising Initiatives

This article first appeared in Fundraiser magazine, Issue 15, March 2012