How to Create a Wealth Model of Your Best Prospects

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When it comes to fundraising and marketing, acquisition costs can be measured not only in dollar value but also in time. It is important to spend time and dollars on the right kind of prospects. Wealth models can guide fundraisers and marketers to focus their time and efforts.

What is a wealth model?

A wealth model is a statistical model or an algorithm. It is based on a mathematical formula. Data scientists create these formulas to identify common traits among your customers, donors, and prospects. They have the capability to even convert certain qualitative attributes into quantitative scores.

Instinct usually determines the most predictive characteristics of top prospects. Wealth models help validate your instincts by quantifying and measuring data. This means that as a fundraiser or marketer your educated guesses can now be data-driven decisions.

How does wealth modeling work?

The idea is simple. A wealth model helps you answer a specific question. Wealth modeling is like perfecting a recipe. Data scientists take different ingredients in exact proportions to create the perfect model. Correlations between data points help you find your next best prospects. These correlations are much more reliable than any one single attribute.

For instance, let’s look at building a major gifts model for a university. The model must answer a specific question. Let’s say that the query is to find donors with a gift capacity of over $25,000 out of a list of 100,000 people. The wealth model first considers past behavior. Everyone that has made a contribution of $25,000 or higher will be included in the results.

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WealthEngine’s models establish a sample size of 200 or more. This means the machine learning in the model will look for donors with high gift capacity. It also means that the algorithm will go a step further to redefine the gift capacity or metric until a reliable sample size is established.

In the previous instance, if there are over 200 people that have donated over $50,000 the model can recommend this as a benchmark. Conversely, if it is only possible to find over 200 people who have donated $22,000 and more then the model can reset the benchmark accordingly.

How to use a Wealth Model

The quality of data determines the strength of wealth modeling. Therefore, modeling with reliable data gets you closer to your next best prospects. Wealth models can help segment your database based on capacity and propensity.

Raw scores generated by the algorithm help rank prospects. You can then start to segment top prospects. Refined segmentation helps you personalize offers and nurture prospects.

The benefit for marketers and fundraisers here is that the model brings you to the right neighborhood of prospects. You can prospect with confidence as your decisions are backed by data. The wealth model helps keep the right people and removes ones don’t meet your goal.

You can also customize wealth modeling to your industry and organization. Instead of looking at benchmarks that may not apply to you, you can focus on attributes that truly affect your business.

For instance, if two competing luxury goods companies run wealth models they might find different patterns within the same database. Company A might find that the correlation between zip code and number of cars owned is important. Whereas, company B might find the correlation between age and interest in travel are most important for them.

In this case, companies A and B would not benefit from a generic model for luxury goods companies.

Additionally, wealth modeling can also help you calculate donor lifetime value. This can act as an indicator of major gifts and recurring donations. It can also reduce donor churn and acquisition costs.

How WealthEngine Builds Wealth Models

What makes WealthEngine’s analytics unique is that we build custom models for your industry and organization. This means they truly reflect patterns in data that are relevant for you.

WealthEngine’s wealth modeling goes beyond the industry standard of analyzing 70% of any data set.  In fact, we use 90% of your data file and use the rest of the 10% to validate the file up to 10 times.

Our models generate raw scores to help you prioritize. Further, they create 10 deciles so that data is pre-segmented to show you the top 10% of prospects. You could then choose to target the top 20%, 30% and so on.

Our process uses standard econometrics and tree-based modeling to show you where your top prospects are clustered in a continuum.

Enterprise models give you unlimited opportunities to answer fundraising or marketing questions. You can input every attribute in your database into different wealth models. Each model addresses a specific need. These are custom built for your organization so they highlight patterns that are most relevant to you.

Custom models give you the option to input 6 key attributes into our analytics solution. This is an affordable way to generate more controlled models that are still specific to your organization.

Both types of models are capable of accepting numeric and categorical variables.

Learn more

Find out which model delivers the best results for your organization. Get insights now.

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Customer Segmentation Models for Increased Conversion

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As a marketer, you are well aware of the power of customer segmentation analysis. However, segmentation is not an end in itself. Its impact grows exponentially with customer segmentation models. These models can increase personalization and engagement.

Importance of Customer Segmentation Models

Personalization is going to be a major theme in marketing. Tailoring the experience to your customer’s interests makes your message resonate. Robust customer segmentation analysis is the foundation for personalization.

In a diverse marketplace, organizations need deeper insight into demographics, lifestyle, and interests. To this end, customer segmentation models help you understand the nuances of the market.

Once you create main segments, you can analyze them further to improve personalization.

For instance, let’s say you’re a luxury car dealership based in suburban Chicago.  You are looking for customers with the capacity to spend over $50,000 on their next car. There are more indicators than a prospect’s wealth score.

You can identify prospects who live in zip codes within a certain radius of the dealership. The next step is to filter for prospects who already own a luxury vehicle. You can refine this segment further by identifying who owns your brand. This helps you determine if they are due for an upgrade or if they are looking at other luxury automakers.

You can then personalize your message in a way that speaks to each micro-segment. You can have one message for those who are loyalists to your brand. For those who own other luxury cars, your messaging could focus on comparative statistics. Focusing your marketing budget on targeted micro-segments reduces costs. Further, it also increases the likelihood of conversion.

Customer Segmentation Analysis

Segmentation models reveal patterns that help you increase engagement within these micro-segments. They also enable you to personalize marketing at scale.

WE Analyze, our analysis and modeling solution can create such models from your data. In the previous instance, you found your micro-segment. Chicago area millionaires who have a net worth of at least $5 million. You narrowed your list down further to those who own luxury cars. You then divided them into a group that owns your brand and a group that doesn’t.

Customer segmentation models can identify patterns of traits within this group. You can then apply these patterns to your database to find more prospects like your chosen segment. A customer segmentation analysis can also help to drive predictive prospecting. This includes finding lookalike prospects that match the profile of your best customers.

Customer Segmentation Models and Personalization

Customer segmentation analysis helps to drill down into smaller sub-segment to fine-tune messaging. A personalized message that reflects customer interests is more likely to resonate. If your customer relates to the message then he is more likely to engage with the brand or cause.

For example in your micro-segment, you can create smaller groups of prospects based on age and type of pet. 

This will help you personalize your pitch to them. Further, it can guide you when selecting a medium that is most effective for each subgroup.

Segmentation Analysis and Lifetime Value (LTV)

Customer segmentation models increase engagement over time. This results in improved customer LTV. Which means that the customer stays connected to the organization. LTV is a great metric for you to rank your prospects.

Prioritization means your budget and message focus on the most responsive segments. Thus, your efforts will see increased conversion at reduced costs.

Segmentation Analysis and Models are Cyclical

The more you use customer segmentation analysis and modeling the better it is for conversion. We have already established that micro-segmenting helps personalize your message and increases engagement.

Therefore, increased engagement results in higher conversions and lower costs. The other important attribute of these models is that they learn to get better over time. Every customer segmentation model helps WE Analyze learn from it. Your models become more refined, thus creating better segments for your next campaign.

customer segmentation analysis

Increase Conversion Rates

Learn more about how WealthEngine’s data science team can help you increase conversion rates through customer segmentation models. Get insights now.

Further Reading

Why You Need a Concierge Marketing Strategy

What is Wealth Screening – and How to Use it to Generate More Money

 

Use Predictive Modeling to Power Up Lead Generation

lead generation

Did you know you could be taking advantage of WealthEngine beyond richly layered profile searches, and fast-paced wealth screenings? WE Analyze helps you can gain deep insights and actionable intelligence on your top customers or donors. These insights can then be used to quickly and efficiently enhance your lead generation.

WealthEngine is the industry’s most trusted, API-accessible, cloud-secure platform for Wealth Intelligence. Further, our solutions enable fundraisers and marketers to drive highly private, high precision, campaigns that deliver high impact at lower acquisition costs. For instance, WE Analyze is the top predictive lead-scoring and analysis solution. Specifically, WE Analyze harnesses the power of one of the largest consumer datasets ever created.

In our previous blog post, we showed you how WE Prospect can help you identify prospects, target them, integrate wealth intelligence, expand your market reach and protect data. In this article we take step back to show you how analyzing your current customer or donor base can help you find actionable insights. These insights can empower your lead generation by finding those prospects that are highly likely to engage with your brand or cause.

Ready to learn more? Watch the video below for a quick overview.

WE Analyze empowers marketers and fundraisers in unprecedented ways. Moreover, our solution does all the work for you! In three simple steps, you could use our predictive modeling to rank your best customers or donors and enhance your lead generation to find ‘look-alike’ prospects.

Step 1: Upload Your List to Gain Deep Insight

Upload a list of your customers or donors with as little information as names, emails and phone numbers. WE Analyze will enrich the data and help you see the composition of your audiences in unprecedented detail.  This means that you can see the attributes that make your customers or donors unique. Our solution generates visuals that reveal actionable insights to enhance your lead generation. Insights not only include demographic data but also lifestyle attributes and affinities to show you how your current donors or customers live, give and save.

Step 2: Create a Model, Score and Rank Donors or Customers

Use the insights to create a predictive model. The model will then enable you to score new leads to see how similar are to your best customers or donors. Rank your prospect, customer or donor lists by order of similarity to your best. Compare segments such as current members of your database to newly acquired lists so you always know which leads to engage first.

Step 3: Use Your Model to Find New Leads Like Your Best

Generate new leads from our 300+ M profile database that look like your best customers. Whether running a broad reach email campaign or looking to supplement an invite list for a regional event, pull lists that are the best fit for your model. Then use the insights to determine messaging and keywords for your next direct mail, email, phone, content, or ad campaign.

Go a Step Further to Personalize in Real-time

Score leads against our API in real-time as they interact across your marketing channels. Personalize your customer experience in real-time as leads interact with touchpoints such as your website, mobile app, call-center, store, or event.

Free Insights

Learn more about how you can leverage past success to set yourself up for effective lead generation. Find out more about WE Insights, a free value-added service for WealthEngine customers.

Predictive Lead Scoring and Analytics – It’s Easier Than You Think.

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The statement ‘predictive lead scoring and analytics made easy’ seems counterintuitive. How can lead scoring and analytics be easy? If it was easy wouldn’t everyone be doing it?

According to a marketing effectiveness study by The Lenskold and Pedowitz Groups, 68% of successful marketers cite lead scoring as most responsible for improving revenue contribution. Additionally, the Pareto Principle says that about 80% of your sales comes from the top 20% of your customers. These statistics should give you pause.

Think about it. What if you could find new prospects that look like your best customers and discover new opportunities among people you already know? Simply put, wouldn’t you want to find prospects that have the same characteristics as those in the top 20% of your customers? Having these actionable insights can dramatically impact your sales and marketing strategies, resulting in increased revenue. This is empowering and valuable information.

Let’s take it a step further with an example:

A luxury retail organization is developing a strategy for their holiday marketing campaign. Specifically, they are planning to host an instore event and want to ensure they are inviting the right people so that they get the most out of the dollars spent. They also want the event to be enticing so both customers and prospects attend.

The organization analyzed their top customers residing within a 30 mile radius of the store location to develop a customer profile. Surprise! These customers have an affinity for equestrian and tend to drive a Lexus. Just those two data points alone influence their marketing plan. What about partnering on the event with Lexus or an equestrian-focused organization? Additionally, the retailer can now identify prospects who fit this customer profile and have the same interests, increasing the likelihood that they will be interested in attending the event.

Going forward, the organization can now score new prospects and customers to determine how to market to them going forward.

Bonus – this information was identified in minutes and doesn’t require a data scientist. How’s that for actionable?

Insights at your fingertips. Increased efficiency and productivity. Find out more now in our on demand webinar Predictive Lead Scoring & Analytics Made Easy.

What to Do Now to Maximize Holiday Spending This Year

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The current retail landscape presents many challenges that can be difficult to manage including decreased customer growth, little transaction growth, growing competition, shifts in spending, and unfavorable demographics. With a rapidly approaching holiday season and only 114 days until Black Friday it can be daunting trying to develop a successful strategy to overcome these challenges.

It’s no surprise that using data and analytics can dramatically impact your revenue, but analytics can only go so far if your data is vague or incomplete. Having complete, rich customer profiles will provide a stronger foundation for your analytics, and thus a stronger foundation for your marketing and sales strategy.

How can you enrich your customer data? Conduct a wealth screening to gain transformational insight into customers and prospects. A screening appends data to your customer database so you can better segment your database and determine who to prioritize in your marketing and sales efforts. This insight is helpful to not only identify your best customers, but to uncover those individuals who may show potential for additional business. You may be missing out on potential opportunities because you don’t know who has the capacity to spend more.

A wealth screening supplies you with wealth, income, lifestyle, and affinity information on individuals. This includes net worth, income, assets, real estate, stock holding, charitable contributions and other financial related data as well as business and personal contact information. Having this information allows you to prioritize who you focus on to maximize revenue.

A screening also lets you determine what marketing messages should be sent to each customer and prospect segment. In regards to gearing up your campaigns for the holiday shopping season, certain segments of your consumer database will have the ability to spend more than others. These individuals should receive offerings for higher cost items, while those who don’t have the capacity to spend as much should be shown lower cost items or a promo code to use to be able to purchase a more expensive item.  

The insights you can gain from a wealth screening are undeniable. By better understanding your customers and prospects the analytics and data you use to inform your decision-making will be more valuable and more impactful.

Contact us to learn more about how you can use these insights to not only identify your wealthiest customers, but to uncover those with the capacity to spend more.

The Ultimate Guide to B2C Lead Scoring Programs

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Is lead scoring part of your marketing strategy? If not, you are missing out on revenue opportunities. Sixty-eight percent of successful marketers state that lead scoring is most responsible for improving revenue contribution.

If you’re a B2C company you may think lead scoring is only for B2B,  but this is a misconception. While there are some differences, lead scoring works for B2C as well.

Our new eBook The Ultimate Guide to B2C Lead Scoring Programs discusses the three main objectives we hear from B2C companies and dives deeper into steps you can take to set up a successful B2C lead scoring program.

This eBook covers:

  • Creating the need for a lead scoring program
  • Driving the right approach to prioritizing your prospects
  • Using the right data as the foundation of your model
  • Implementing your model to set yourself up for success
  • Driving adoption amongst key stakeholders

Download The Ultimate Guide to B2C Lead Scoring Programs to learn how to better prioritize your customers and prospects, and become more data-driven in your marketing and sales efforts.