What does Netflix have to do with donor management?

Netflix's system of customer profiles can teach nonprofits about donor management.
Date Published
01/21/2014

In the nonprofit community, marketing is sometimes thought of in a negative light because of its often misperceived association with advertising. However, marketing is much more of a conduit that connects organizations with donors and prospective contributors. Marketers create communication channels that potentially allow nonprofit groups to sustain membership levels or expand awareness, resulting in a greater number of individuals interested in supporting the enterprises by volunteering, advocating or donating. One key resource for nonprofits is marketing automation tools, which help to aggregate and organize donor information in meaningful ways that can improve relationships.

Opportunities for growth
Marketing automation software provider Act-On’s CEO Raghu Raghavan told Venture Beat Magazine that there’s currently about 3 percent penetration of the resource in midmarket organizations that aren’t technology focused. While most nonprofit organizations aren’t representative of the middle market – those seeing annual revenues of $500 million or less – the technology still plays an important role in donor management. And for the most part, this data indicates the vast majority of organizations haven’t invested in marketing automation tools to improve the way they interact with contributors.

Making use of donor profiles
The online marketing news source Clickz referred to the way Netflix has engineered a system that does a good job of illustrating the way charitable groups should be using donor information to improve marketing automation within their organization. In the briefest terms, Netflix has created a classification system that allows viewers to search for an incrementally discrete set of variables to identify films they’d likely enjoy. In previous incarnations of its classification algorithm, the streaming video service helped subscribers find content they’d likely enjoy based on their viewing history and behavior. This is an essential first step that nonprofit groups should take to better understand their contributors and provide services they’ll likely value. Creating donor profiles based off their giving history, feedback, social media responses, volunteering background and email preferences helps to differentiate specific individuals and unique segments.

At the same time, it’s important that profiles and segments aren’t too rigid or focus too sharply on a few aspects. Clickz emphasized the fact that Netlix uses more than 90,000 genres to organize films in its catalog, but these categories aren’t set in stone. The company allows for overlap among movies and videos because a wide variety of films can fall into different areas. In the same way, donors will respond differently to various campaign strategies and outreach channels, and nonprofits need to remain aware of these nuances to develop stronger relationships.

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