Unlocking Fundraising Potential with Market Mix Modelling

Nurture supporter journey

Market Mix Modelling (MMM) is a powerful technique designed to identify and quantify the effects of various drivers on key performance indicators (KPIs). For charities, MMM provides invaluable insights into what influences outcomes such as overall fundraising income, regular giving recruitment, and volunteer sign-ups.

By leveraging MMM, charities can:

    • Analyse historical performance.
    • Forecast the impact of future activities.

This approach is particularly beneficial in complex environments where internal and external factors interplay to affect outcomes. For instance, a cash fundraising program’s revenue may be shaped not only by direct activities like mail, digital campaigns, or DRTV but also by external influences such as news coverage, competitor activities, or even weather. Moreover, MMM helps attribute income correctly across channels, shedding light on the “halo effects” where integrated campaigns amplify results across multiple platforms.

The Process: Building a Robust Model

The success of an MMM initiative hinges on accurately defining inputs and collecting relevant data. This involves two core elements:

Target Variable

MMMs can assess various outcomes such as revenue, volunteer sign-ups, or campaign actions. It’s essential to define the specific revenue stream or KPI being analyzed, as different input variables impact these outcomes uniquely. For example:

    • Legacy Giving: Involves a prolonged decision-making process compared to cash donations, meaning input activities’ impact spans a longer timeframe.
    • Regular Giving vs. One-Off Donations: These have distinct dynamics, requiring separate models to avoid obfuscating key insights.

Input Variables

Gathering input data can be time-intensive, as it often spans diverse sources. Typical data inputs include:

    • Marketing spend by channel (e.g., direct mail, digital, DRTV).
    • Brand activity and awareness metrics.
    • PR coverage and news stories.
    • TV content related to the charity or cause.
    • Footfall data for physical locations.
    • Macro-economic indicators such as consumer confidence.
    • Weather data.

To ensure precision, data should ideally be collected weekly over a 3-4 year period. This time frame allows for seasonal variations and other fluctuations. When direct data is unavailable, extrapolation techniques or proxy variables may be used.

 

Outputs: Insights that drive strategy

Once data is collated, MMM reveals the attributed impact of each input variable. A typical model output illustrates how different factors contribute to weekly revenue or other KPIs.

These insights enable charities to:

    • Measure Overall Impact: Quantify the ROI of all marketing activities holistically.
    • Assess Brand and PR Influence: Understand how brand and PR efforts translate into measurable outcomes.
    • Plan for External Influences: Identify and mitigate the effects of factors beyond your control.
    • Forecast with Confidence: Model potential outcomes based on various budget scenarios.

Why Choose Us?

Our econometrics expertise is led by Jon Kelly, MD, who brings over 25 years of experience in building and advising on Market Mix Models. With a background in commercial retail models for brands like B&Q and Superdrug, Jon has spent recent years focusing on the charity sector, delivering insights for major organizations, including:

    • Quantifying the impact of DRTV on fundraising income.
    • Assessing the role of footfall in membership renewals.
    • Highlighting how weather influences donations.
    • Evaluating the effects of TV and media exposure, both positive and negative.

Whether you’re looking to develop in-house models or seeking expert guidance, our team is here to help. We’ll work with you to ensure your data collection and modelling approach aligns with best practices, or we can handle the modelling process for you entirely.

 

Let's Talk

Ready to unlock your organisation’s full potential with Market Mix Modelling? Contact us for a free consultation to dicsuss your goals and how MMM can help achieve them.