Debt—no matter the kind—is something all of us like to avoid whenever possible. But when it comes to data debt, sometimes it piles up without us even realizing it.
If you’re like many of my friends in nonprofit leadership, you’re working harder than ever before with what feels like a never-ending “to do” list. Because of this, it can be easy to let data strategy take a back seat. Unfortunately, this is exactly how data debt begins to build.
What is data debt?
Data debt is a metaphor for explaining the costs of not properly managing data in real time. Organizations might decide to de-prioritize data management and data strategy because they don’t have the time, talent or resources to spare. This creates data debt.
Data debt can have a snowball effect on your organization. Like a snowball rolling downhill, the impact of bad data builds and builds over time. Put simply: If you let small errors in your data accumulate, you will see a lower return on investment in marketing campaigns and a decline in the lifetime value of donors.
Fortunately, there are a few simple actions your organization can take to help you avoid costly data debt in the months and years to come.
Action 1: Put your digital data in a data warehouse
Many nonprofit leaders say that one of their biggest data challenges is coding digital gifts correctly. They are struggling to properly capture the nuance in each digital gift because existing appeal code structures weren’t designed to capture all the details that matter.
Automated data warehouses like Bytespree make it easy to capture raw digital data from all your fundraising channels (Facebook, Google, etc.). With an automated data warehouse in place, you can code gifts into your current appeal code structure now with the flexibility to recode the gifts in the future based on UTM components or any other attributes in the raw data.
Without a data warehouse, the UTM components and other relevant attributes could disappear forever, making it impossible to gain crucial insights into donor journeys and channel and campaign performances.
Action 2: Invest now in data hygiene and enrichment
The results have been in for a long, long time. Direct marketing programs that invest early and often in data hygiene and enrichment deliver better ROI and donor retention than those that do not.
We all know how crucial NCOA and deceased processing are for protecting campaign ROI, but some lesser-known data hygiene products are able to deliver massive value for your direct response program. Private change of address (PCOA), apartment appends and deduplication processing are options you should be considering for your database.
Enrichment products range widely, from practical demographic appends to niche appends designed to support precision segmentation, such as congressional appends and wealth overlays. RKD’s findings in our study on Gen X donors, as well as market tests recently conducted by our team, highlight the extraordinary value organizations can gain through cost-effective age appends. Age appends make it possible to tailor your messaging and creative to each generation and subsequently multiply your impact.
We consider twice-annual PCOA processing and age appends as essential housekeeping for our customers. These two products provide immediate and ongoing boosts to donor retention and response rates.
Action 3: Spend one hour per week maintaining a data governance guidebook
In my recent blog about transferring data knowledge, I discussed how important data governance strategies are to the security and growth of an organization. It’s easy to get started documenting data knowledge, and it pays off quickly, making an impact after just one new hire joins the team.
Every organization should immediately begin building and maintaining a written guide describing how their reports and data operations work. By dedicating just one hour per week to documenting changes to your business processes, appeal codes, reports and data challenges, your organization can preserve critical knowledge and provide new hires with empowering context that helps them succeed.
By implementing these solutions, your organization can avoid racking up costly data debt before it actually happens. Not only will this save you time and money, but it will also allow you to focus on what matters most—your mission!
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