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Using RFM segmentation to support alumni reunion fundraising
Journal of Education Advancement & Marketing,
3
(4),
325-339
(2019)
Abstract
Alumni reunion planning is a major annual undertaking for US colleges and universities. Alumni reunions are cherished events that provide opportunities for alumni to reflect and reconnect with classmates. In the current environment of declining federal and state financial support, fundraising has increasingly become an integral part of the alumni reunion planning process. One of the problems that alumni reunion planners encounter is the development of messaging that is tailored to influence the broad pool of potential donors. This paper provides a strategy to address the messaging problem by using RFM (Recency, Frequency and Monetary Value) segmentation to identify and group potential donors in a manner that supports effective target messaging. The reunion fundraising strategy guides the development of messaging that is intended to influence the donor pool. The donor pool is a mixture of major gift, leadership gift, and annual fund prospects. One common characteristic among the prospects in the donor pool is that they all have some type of historical record of financial activity with the institution. The historical record of financial activity is a valuable resource that provides the basic data requirement to conduct an RFM segmentation. The RFM model is an analytic tool that is designed for analysis of data from prospects with historical records of financial transactions. Higher education fundraisers and industry database marketers have used the RFM model with k-means cluster analysis to create segmentation structures that can be used to improve the planning and efficiency of philanthropic and commercial solicitation efforts. Our segmentation results successfully classified each of the alumni reunion potential donors as a member in one of the unique segments of major gift, leadership gift, and annual fund prospects. The characteristics of each identified segment provides information to guide the planners on developing tailored messaging to selectively influence the potential donors.
Keywords: Alumni relations; fundraising; messaging; RFM; segmentation; cluster analysis; database marketing
The full article is available to subscribers to the journal.
Author's Biography
John Orange is the Director-Prospect Research in the Advancement Services Department at Trinity University. John has responsibility for prospect research, prospect management, biographical data support and predictive modelling. John has four years of experience in prospect research and over 20 years of experience in data analytics and marketing research. He is a member of Association of Professional Researchers for Advancement (APRA), APRA Central South Texas, Council for Advancement and Support of Education (CASE) District IV and Informs. John holds a bachelors degree from Washington University, and MBA and PhD degrees from Saint Louis University.
Selim Sharif is the Director of Alumni Education and Engagement at Trinity University. He has served for more than 20 years in promoting alumni engagement and alumni chapter and network development. Selim now works to engage alumni through educational opportunities including regional and national alumni and parent conferences, lectures, seminars and regular podcasts and webinars. He is also the contact for planning alumni travel programmes and summer camps for alumni and their families. Selim holds a master’s degree in International Relations from the University of Dhaka, Bangladesh.
Cynthia Uviedo is the Director of Annual Giving Programs at Trinity University. She has more than 15 years of experience in fundraising. In her 10 years at Trinity University, she has worked in various areas of the Alumni Relations and Development division, including donor relations, special events and annual giving. In her current role, she manages the reunion giving and volunteer programme and assists in developing a comprehensive annual fund communication plan. Cynthia holds a bachelor’s degree from Trinity University and a master of public administration degree from the George Washington University. She is a member of the Association of Fundraising Professionals and served as the San Antonio Chapter President in 2012.
