#1: Gaining a better understanding of customers

One of the key uses of big data for businesses is to more fully understand customers—drivers of their behavior; their likes and dislikes; places and websites they frequent; why they recommend a company to others; and much more. Companies at the forefront of big data use have added to traditional sources of information unstructured data like social media statistics and browser logs get a clearer and more complete picture of customers.

Why fundraisers should care

Knowing donors inside and out—isn’t that Mt. Everest for fundraisers? Big data will greatly flesh out your view of donors and other constituents, telling you in detail what is relevant and important to your constituents.

#2: Targeting customers more effectively

While greater understanding is valuable in and of itself, the payoff to companies is the ability to target customers much more accurately. The predictive models companies can build from big data have become incredibly powerful. Mobile service providers, for instance, use big data to predict customers at risk of leaving, which allows them to take preventive steps. Retailers use big data to identify people who are most likely to buy their products and, arguably even more important, become informal brand ambassadors.

Why fundraisers should care

Nonprofits, in most cases without the deep marketing pockets more typical of corporations, must make every outreach effort count. Improved knowledge of what moves constituents will translate into much more targeted, relevant approaches and greater ROI. With increased relevance comes a much greater chance of cutting through the clutter and having messages heard. This benefit doesn’t just accrue to direct mail fundraising or the like. Those in a fundraising organization with personal contact with constituents—donor relations reps or front-line fundraisers—can make use of the insights gleaned through big data analysis to know who needs extra care or is ready to make the move to major giver.

#3: Performance Optimization

Big data helps companies perform and market better. Some manufacturers have optimized their assembly lines and delivery schedules by unlocking insights buried in data from servers, machinery, appliances, energy grids, weather forecasts and more. With this information, they also have reduced the expenses related to running their businesses and buying equipment. Railway systems, for instance, analyze big data from maintenance logs, GSP units, weather data, tablets used by staff in the field and sensors in brakes, rails, switches, etc., to automate and improve the scheduling of thousands of trains.

Why fundraisers should care

Optimizing fundraising processes leads to multiple benefits. As nonprofits create and store data on various kinds of transactions—from gift entry/processing to event registration, action completions and much more—they gain more precise and thorough information on how the processes related to those transactions perform. Analyzing the information can uncover ways to improve and boost performance. Big data collection and analysis also supports better management decisions.

One of the best ways nonprofits can prepare for the day when any of them can make use of big data by making sure the data they have now and add in the future is as pristine as it can be. That means defining data management protocols and making sure any fundraising software can support those rules.

About the author: Grace Lazzara is director of marketing for SofTrek Corporation. She has more than 25 years’ experience in helping nonprofits, corporations, and agencies market and communicate effectively.