Epsilon's RFA-Plus Data Analysis Enhances Direct Marketing Performance for Nonprofits.

Business Editors

BURLINGTON, Mass.--(BUSINESS WIRE)--April 14, 2003

In an economy where many nonprofit organizations are competing for the same donor pool, Epsilon, a leading relationship marketing company, is employing RFA-Plus, an innovative segmentation solution that enables nonprofit organizations to precisely prioritize direct marketing opportunities based on each donor's full relationship with the organization.

"RFA" - Recency, Frequency, Amount of Gift - is a standard analysis method long utilized by nonprofit organizations to inform renewal audience selection. The traditional RFA method relies on response and donation history such as recency and frequency of individual donor responses to past campaigns. Conventional wisdom says that an organization's most recent and frequent supporters most likely will be their "best targets" for upcoming promotions. However, Epsilon's sophisticated data modeling techniques have revealed that traditional RFA can be arbitrary and inefficient.

Epsilon's RFA-Plus takes the RFA method to a higher level. Recency, frequency and gift amount remain the cornerstones of an effective donor segmentation strategy. However, if other combinations of gift giving behaviors and patterns are not considered, it is likely that an organization will not achieve optimal fundraising efficiency. RFA-Plus leverages each donor's complete relationship with an organization to provide a broader, more stable foundation on which to make informed marketing decisions. In addition to recency, frequency and gift amount, RFA-Plus considers over 100 other potential drivers of response and gift size, such as; consistency of giving, lifetime value, upgrade/downgrade, preferred month of giving, breadth of support, involvement, tenure, direct mail responsiveness, and demographics to create a more meaningful and actionable profile of each donor. The compilation of an RFA-Plus analysis results in a "responsiveness score" and a "size of gift score" for each donor. These scores are the basis for determining the highest potential targets for each campaign.

To showcase the value of RFA-Plus vs. traditional RFA, Epsilon teamed with one of the nation's premier health-related fundraising organizations to enhance the performance of its renewal program. RFA-Plus enabled the organization to replace a substantial quantity of underperforming names with a more profitable audience that went previously undetected by traditional RFA segmentation. The new names generated an average gift of $89 at a Cost Per Dollar Raised (CPDR) of $0.15, whereas the names they replaced generated an average gift of $8.00 at a CPDR of over $2.00.

"Traditional RFA segmentation analysis is limiting. Based on our vast experience, we've found that it does not capture all the variables necessary to develop the most effective marketing campaign for fundraising efforts," stated Michael Iaccarino, president and chief executive officer, Epsilon. "RFA-Plus equips our nonprofit clients with a solution that enables them to identify and reach donors most likely to respond favorably to a given campaign. This method provides for significant savings on each campaign and allows more funds to go directly to the worthy causes they promote."

About Epsilon

Epsilon is a leading relationship marketing company that helps clients create measurable business results through integrated marketing services. Epsilon is committed to maximizing the value, growth and loyalty of our client's customer and prospect portfolio through our core services in data analysis, multi-channel direct communications and database marketing. Epsilon services enable clients to build enduring customer relationships by identifying marketing opportunities and creating actionable customer insight. Founded in 1969, Epsilon maintains offices in Boston, Washington, D.C., St. Louis, and Dallas. Relizon acquired Epsilon in 2002.

About Relizon

Relizon, based in Dayton, Ohio, is known for industry-leading customer satisfaction in the delivery of total business communications to thousands of customers across the U.S. and Canada. Its document, billing and marketing solutions enable clients in a variety of industries to realize a higher return on investment from communications within their own organizations and to their customers and prospects. One of The Carlyle Group companies, Relizon has revenues approaching one billion dollars, 4,800 employees and more than 50 manufacturing and distribution facilities strategically located across North America. Visit us at www.relizon.com.