Share of Wallet, Wealth, and the Multi-Modality of Individuals

share of wallet

Recently, I spoke  with one of our clients, and they asked, “Prag, isn’t it contradictory that WealthEngine simultaneously serves nonprofit organizations and for-profit companies?” I replied, “I can understand why you would ask, but the answer is no, it’s not contradictory.” Here’s why…

My response drew me back to a core concept in consumer marketing: share of wallet.  In its simplest form, this is how much of an individual’s (or household’s) spend goes to one particular firm, company, or brand versus to others. Does the individual spend more with Company A or Company B? And if I am the head of marketing at Company A, how do I continue to garner more and more spend with my company? There are many articles about share of wallet. One that I find of continued interest, authored several years ago but still very relevant and pointed, is the Harvard Business Review article written by T. Keiningham, et al.  The authors do a great job of distilling the idea that customer satisfaction or loyalty does not necessarily mean an increase in share of wallet.

Because share of wallet is anchored to the individual [or household], it is essential to think through the various modes that the one individual is operating within their daily life.  Think about your own week or month. In one moment, you may focus on saving for a down payment on a house; your 401k; working with your financial advisor; or, like me as a father of a high schooler, your child’s college fund; and so on.

In another part of your life, you may be buying a new car;  a costly but dream vacation; a high-end luxury watch as an anniversary gift; and so on.  And in another moment,  you may focus on giving by donating to a  cause that is near & dear to you; giving to your college alma mater; deciding where to grant funds from the family foundation your grandparents set up (as is often the case for families with cross-generational transfer of wealth); and so on.

This dynamic of saving-buying-giving is ever present. This dynamic is apparent with different degrees of spend across the three arenas, depending on complex financial, lifestyle & personality attributes. All of it then drives your wallet and how and where you’ll distribute your dollars.  The job of a wealth advisor is to tap and grow the wallet in saving mode.  This can then cross into giving and spending mode depending on your goals. The job of a CMO at a luxury retailer or automotive company is to tap your wallet in buying mode. The job of the VP of Advancement at your alma mater or the VP of Development at ‘yourcause.org’, is to tap your wallet for more and continued giving of charitable donations.

So, that brings me back to the initial question: how does WealthEngine serve for-profit companies and nonprofit organizations simultaneously?

Given the multi-modality of individuals, WealthEngine is in the business of providing wealth intelligence (e.g. wealth data, wealth models, insights, predictive analytics & modeling, etc.) to sharpen the prospecting and outreach of those nonprofits seeking the individual in giving mode, of those wealth advisory firms seeking the individual in saving mode, and of those luxury retailers, luxury service providers, and luxury real estate brokers of those individuals in buying mode. With money and life always on the move, modern technology platforms enable this data-driven outreach in powerful and efficient ways. These rich (ha, sorry for the pun!) data sets and insights feed across platforms via standard API integrations. Custom predictive models can be built & enabled to feed the CRM & marketing platforms for CMOs & VPs of Advancement/Development. This allows CMOs and VPs to quickly activate and reach individuals in streamlined, targeted, and measurable ways.

Ultimately all roads lead to the individual. In this case to his or her wallet and your firm’s ability to tap a disproportionate share of it, continuously.

Inner Circle – How to Find Connections of Your Close Contacts

inner circle

Need a warm introduction to a prospective contact? Here’s how to leverage your Inner Circle, your closest contacts, to find out who they can connect you to.

As a nonprofit, you already know the importance of prospect research.  Our Inner Circle solution enables your connections to help you find your next best prospects. Anna Sheehan, Client Engagement Manager at WealthEngine, shares how you can leverage the people in your network to connect with those you want to reach.

What is the Inner Circle Solution?

Inner Circle is a feature within the WealthEngine platform that gives you ways to discover connections or relationships within your existing contacts.

With Inner Circle, you can identify connections who are closest to your organization and then expand out to who they know. Your inner circle could consist of board members, foundation and committee members. These Inner Circle members can help connect you to their colleagues, relatives, others they serve on boards with and acquaintances who might make great prospects.

relationship mapping

Anna says, “These vital connections are key because they help you expand your network and grow your book of business.”

How does Inner Circle work?

The functionality is fairly simple. You would upload a list of your Inner Circle members into WealthEngine. The solution then generates a list of their connections. These connections could already be in your donor base.

You now have an effective way to reach out to them. This would be the perfect opportunity to ask your Inner Circle member for an introduction to this prospect.

In fact, your Inner Circle members are a great source for you to find top prospects. They already have a connection to your organization. This also means that they are invested in it. They could be open to helping you make a major gift ask depending on how close they are to the prospect.

Who should you put into Inner Circle?

The best candidates are obviously those who are closely connected to your nonprofit. This could be board members, foundation members, top donors,  development committee members, advancement committee members, etc.

Further, you can think more broadly about your own organization. Who would be able to help you? Who would be willing to introduce you to their connections? It is important to choose Inner Circle members who have the right connections. This means that they have to have connections with influential people who are willing to give.

Board members and former donors are obvious candidates. But, committee members can be appropriate as well. These could be development or advancement committee members.

What data should you enter into Inner Circle?

Data requirements for Inner Circle as similar to doing a wealth screening with WealthEngine. Fields such as first name, last name, street address, city, state and zip code can all be entered. Inner Circle also allows you to enter the name of a business. Anna strongly recommends uploading a company name. This can be useful even it is a past business. It helps to track down valuable connections among current and past colleagues.

Business information is also useful in instances where people have very common names. The more information you provide, the higher the match rate will be. For instance, if you have a John Smith in your database with the top P2G (propensity to give) score of 1, adding company information can help refine your search to the particular John Smith that has a connection to your board member.

Is there a limit on your Inner Circle list size?

There are no specific limits on how many connections you can upload to Inner Circle. However,  Anna recommends you limit your input in order to be more selective.

In other words, it is best to add people who not only have the right connections but are also willing to introduce them to you.

Additionally, when you receive results from Inner Circle, there is a bit of a manual process involved. You will have to look up connections and establish matches. Therefore, it can become tedious if your list has thousands of entries.

How big should a file typically be?

On average, your file should be about 5% of the size of your screening file. For instance, if you typically screen 10,000 records your Inner Circle list should consist of about 500 people.

How does Inner Circle make matches?

Inner Circle makes matches in one of three ways:

  1. Business Contacts: current or past coworkers
  2. Board Affiliations: foundations, nonprofit and corporate boards
  3. Familial Connections: anyone that your Inner Circle member has shared a household with (in the present and in the past).

This proves to be an effective method to find close connections who could share the Inner Circle member’s affinity for your organization.

We had the case of a nonprofit client at WealthEngine running a capital campaign. The board really got involved and became incentivized to help out. They might have made their own financial contributions, but they wanted to know how else they could help.

This nonprofit then loaded these board members into Inner Circle. They also did a screening of their donors, some non-donors, and other constituents. They were able to find multiple connections. These connections were all highly rated prospects who had been previously overlooked. They all had high P2G scores and high gift-capacities. As a result, the organization was able to provide a list of 5 highly targeted prospects to each board member.

The nonprofit was able to benefit by finding high-quality prospects, especially ones they had overlooked. Connecting to them through a board member who they have a relationship with makes the touch that much more personal as well.

What potential issues should you look out for?

Using Inner Circle is fairly straightforward, especially if you have screened with WealthEngine before. However, there have been a few instances where the solution has found matches who are too close to the Inner Circle member. For instance, it could suggest a spouse or parent.

It is also important to load as much information as possible into Inner Circle as it can match with great precision. This is especially true for people with names that are common.

Best Practice Recommendations

  • Use Inner Circle for many types of campaigns- capital campaigns, annual funds, major gifts, etc.
  • Be selective with who you include in your Inner Circle list. It is definitely about quality over quantity of connections.
  • Try to upload as much information as possible in order to increase match precision.
  • Listen to our podcast to learn more:

Find new contacts

Set up your Inner Circle today to find high-quality prospects whom you may have overlooked. Take a minute to fill the form on the right and a WealthEngine rep will contact you very soon.

More useful articles

Hidden Donor Calculator: Finding Hidden Donors in Plain Sight

How to Calculate Donor Lifetime Value to Predict Future Donations

 

 

 

 

 

 

2019 Millionaire Report: A Look Into What Influences Millennials

The 2019 U.S. Millionaire Report touched on themes highlighting the ways consumer demographics are changing nonprofit and commercial spaces. The biggest demographic shift? The rise of the millennial population. So, with their growing presence, that begs the question: what influences millennials? And how do their values and habits influence the millionaire population?

Millennial Influence on Millionaire Population

As the fastest growing millionaire segment, millennials make up 2% of the millionaire population today. Millennial influence is already growing substantially, influencing how all of us give, save, and spend.

Most millionaires in the United States are now adopting key millennial values (sustainability, conservation, and diversity, among others) to inform their decision making. So, most millionaires, (Boomers and Millennials alike) are not as flashy as you’d think! Let’s take a look at what influences millennials, specifically, and how these values are influencing millionaires.

For example, for millionaires in the United States, their taste in vehicles is changing. Instead of opting for well-known luxury vehicles, millionaires are gravitating towards car models that are more economical (i.e. Honda Accord, Toyota Camry, Ford F-Series Pickup, etc.)

Millionaires are also moving from traditionally wealthy areas to the suburbs. If anything they’re expanding and diversifying the locations they decide to settle in. Millennials, for example, are shifting from urban areas such as New York and Silicon Valley to more suburban areas like Freemont or Atherton in California.

As Millennials continue to influence this population, it’s becoming more apparent that millionaires, and their values, are changing. So, as new personas emerge, the needs of millionaires are becoming more diverse. And, as Boomers enter retirement age, and Millennials continue to accumulate wealth, their influence will only continue to grow and impact the way we live.

To learn more about the way Millennials are shaking up our world, click here to reserve your copy of the 2019 Millennial Report today.

Customer Segmentation Data Mining to get Customer Insights

data mining for customer segmentation

No two customers are the same. Even though customer segmentation is not a new concept, the need for it has reached new heights. This is because the market place is becoming more diverse. Customer segmentation data mining helps you address customers in a way that resonates with them.

Segmentation is the first step towards personalization. Additionally, creating segments based on the likelihood of engagement helps you prioritize your marketing.  Personalization is important but can prove expensive and difficult to scale.

Customer segmentation data mining can help you personalize your marketing in a cost-effective way. Effective data mining needs a powerful platform.

Here’s our three-step guide to customer segmentation data mining

Step 1: Start with Big Data

Having a great platform is not enough.  You need to start with high-quality data as it can generate great insights.

Data is everywhere. In fact, Big Data management is still considered a challenge.  All data is not equal. It is important to gather high-quality data to feed your analysis. To this end, screening your database can add great value. Screening can take basic information about your customers (such as names and email addresses) and helps you fill in the gaps. The process can append other relevant information about them.

For instance, WE Screen takes our proprietary wealth scores and ratings and merges them with your contact data. Further, you can know more about your contacts’ interests, political affiliations, net worth, and their capacity to spend. Combining these data points with wealth ratings can be powerful. Wealth ratings ultimately help you rank customers in order of priority.

For example, let’s say you are a luxury travel company that curates bespoke experiences. You can screen your database to understand your customers beyond their age, name, and email. Screening gives you a holistic picture including ownership of vacation homes, boats, private jets, etc. All this information can help you refine their experience.

However, it is important to note that data is not an end in itself. It is a means to get actionable insights. This brings us to the next step of Customer segmentation data mining.

Step 2: Conduct Data Mining for Customer Segmentation

The high-quality data you acquired from screening should go into the right analytics platform. A powerful platform can deliver actionable insights by mining your data.

Data mining for customer segmentation helps you see what makes your customers unique. Further, you can understand the composition of your audiences in detail. These insights can also help you determine your messaging.

As an example, WE Analyze is a powerful analytical platform. The solution lets you enter hundreds of attributes that the engine uses for data mining.  Further, WE Analyze can identify what traits your customers have in common.

For your luxury travel company, the analysis could reveal usable insights. You could find out that all customers with a Lifetime Value (LTV) of over $250,000 have five traits in common. They are all between the ages of 40 and 55 and have either two or three children. They have leased from the same brand of car over the past eight years or more and they have vacation homes in Florida.

Knowing all this means that your marketing can be highly personalized.

Want to learn more about how to market your luxury brand? Download our guide and gain perspective on the value of using analytics in your marketing strategy.

Step 3: Automate Customer Segmentation through Data Modeling

Modeling can further refine data mining for customer segmentation. If you have a specific marketing question, a model finds you an answer that is backed by data.

Let’s say you are trying to find more luxury travelers to market your services to. This prospecting exercise can become highly precise when you use data models.

You could take the important traits identified by your analytics platform and enter them into a model. The model will examine your database and segment it for you. Let’s say are trying to find top luxury travel customers out of a database of 100,000. The model will automatically segment them into 10 equal groups. The first group will contain your top 10% of customers.

How does this work? In the data mining or analysis stage, you found the most important common traits found among your customers. The model uses these traits to find more prospects that are just like your best customers.

WealthEngine’s modeling suite goes beyond pre-set models for luxury industries. Each model is custom built for your business. This means you don’t stop at what works well in your industry. You actually find out what works best for you.

Thus, the third step of customer segmentation data mining creates refined segments for you. Refined segmentation acts as a foundation for personalization. Data mining also removes manual effort in segmentation, making it cost-effective and scalable.

Learn More

Learn more about how you can use power up your customer segmentation through powerful data mining and modeling solutions. Model your data now.

Further Reading

Why You Need a Concierge Marketing Strategy

Using Big Data and Fundraising Data Analytics for Marketing

 

 

 

 

2019 Millionaire Report: Diversity of the Millionaire Population

Chief Development Officer

The 2019 U.S. Millionaire Report touched on themes highlighting the ways consumer demographics are changing nonprofit and commercial spaces. The biggest indicator?

Diversity in the millionaire population. With a growing population of 30 million individual millionaires in the U.S. alone, wealth continues to spread rapidly across generations. This growing group of millionaires is no longer just concentrated in traditionally wealthy cities on the East and West Coast— they exist everywhere. From Miami Beach in Florida to Portola Valley in California, millionaires hold property in more locations that exist in untapped corners of the U.S.

Now that the millionaire population is expanding at a faster rate, not one millionaire is the same as another. So, as new personas emerge, the needs of millionaires are becoming more diverse and individual. Their interests and needs differ, and they spend, give, and save differently. Whether you’re an Ultra High Net Worth Individual or a Married Millionaire in your mid-40s, you may buy the same luxury good or service, but for completely different reasons. You may donate to the same organization, but contribute gifts of different sizes.

Similarly, with the emergence and increased influence of millennial millionaires, consumer needs are fundamentally changing the way nonprofits and commercial brands operate. Now, we see a push for more sustainable and personalized marketing which prioritizes purpose over everything. So, not only do we see a shift in demographics, but we’re also seeing an abundance of different consumer requirements.

To discover more themes and takeaways, download your copy of the 2019 U.S. Millionaire Report here.

CIBC Innovation Banking provides $6.5 million expansion capital to wealth management analytics company WealthEngine, Inc.

BETHESDA, MDMarch 4, 2019 /CNW/ – WealthEngine (WE), the leading provider of predictive marketing, analytics and audience development services, announced it has entered into a credit financing agreement for $6.5 million in growth capital from CIBC Innovation Banking.

With this new funding WealthEngine will continue to expand its offering of innovative analytics tools, enabling companies in the for-profit and not-for-profit sectors to access powerful insights to target, segment and engage with their customers and donors.

“The combined growth capital and working capital provided by CIBC Innovation Banking will help us continue to scale our company and to introduce new solutions to the global wealth management and fundraising industries,” said PV Boccasam, CEO, WealthEngine Inc.

“We are excited to work with WealthEngine as we deploy creative financing solutions to help further accelerate the company’s growth,” said Paul Gibson, Managing Director, CIBC Innovation Banking, Virginia. “WealthEngine’s unique analytics platform offers tremendous value for the for-profit and non-profit sectors, and we look forward to working with this innovative, rapidly growing organization.”

WealthEngine’s investors include Novak Biddle Venture Partners, Signatures Capital and Streamlined Ventures.

CIBC Innovation Banking delivers strategic advice and funding to North American technology and innovation clients at each stage of their business cycle, from start up to IPO and beyond. The team has extensive experience and a strong, collaborative approach that extends across CIBC’s commercial banking and capital markets businesses in Canada and the U.S.

About WealthEngine

WealthEngine works with more than 3,000 industry leading financial services, higher education, healthcare systems, advocacy, and high-end hospitality organizations to deeply understand their current and prospective donors and customers. Our cloud-based prospect engagement platform contains WE Profiles for 250M adults in the U.S., enriched with demographics, lifestyle and affinity, charitable/political giving history, real-estate and other wealth signals. WealthEngine also is an ardent supporter of its local community and a member of the 1% Pledge movement. To learn more visit WealthEngine.com.

SOURCE WealthEngine

For further information: Julie Bacon, VP Marketing, WealthEngine, 703.629.4854, jbacon@wealthengine.com