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2015

Implementing CRM Segmentation


Oxfam Canada
BUS 324 Customer Relations Management
School of Business
Professor David Dobson
Group 2
Matt Erickson
Dan Gibson
Trieste Reading
Usman Shahid
Helen Sung

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6/16/2015

Table of Contents
Executive Summary....................................................................................................................................... 3
Introduction .................................................................................................................................................. 4
Industry Background ..................................................................................................................................... 4
Charitable Contributions ........................................................................................................................... 4
Demographics ........................................................................................................................................... 5
Psychographics.......................................................................................................................................... 6
Company Background ................................................................................................................................... 6
Figure 1: Countries Where Oxfam Works.............................................................................................. 7
Sources of Funding.................................................................................................................................... 7
Introduction to CRM ..................................................................................................................................... 8
Implementation Plan .................................................................................................................................... 9
SAS Description ............................................................................................................................................. 9
Figure 2: Market Segments ................................................................................................................. 10
Segmentation Process................................................................................................................................. 10
Figure 3: SAS Segmentation Process ................................................................................................... 11
Step 1: Data File ...................................................................................................................................... 11
Step 2: Filter ............................................................................................................................................ 11
Step 3: Cluster Analysis ........................................................................................................................... 11
Step 4: Segment Profile........................................................................................................................... 11
Step 5: Interpretation ............................................................................................................................. 12
Benefits of Profiling..................................................................................................................................... 12
Donor Management................................................................................................................................ 12
Segmentation Profiles ................................................................................................................................. 13
Figure 4: Donor Profiles as a Percentage of Customer Base ............................................................... 13
Segment 1 ............................................................................................................................................... 14
Marketing Strategies ............................................................................................................................... 14
Segment 2 ............................................................................................................................................... 15
Marketing Strategies ............................................................................................................................... 16
Segment 3 ............................................................................................................................................... 17
Marketing Strategies ............................................................................................................................... 18
Segment 4 ............................................................................................................................................... 18
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Marketing Strategy ................................................................................................................................. 19


Segment 5 ............................................................................................................................................... 20
Marketing Strategies ............................................................................................................................... 20
CRM Marketing Techniques ........................................................................................................................ 21
Figure 5: Differentiation in the Multichannel Mix............................................................................... 22
Limitations .................................................................................................................................................. 24
Recommendations ...................................................................................................................................... 24
References .................................................................................................................................................. 27
Appendices.................................................................................................................................................. 29
Appendix A: Giving Level as a Percentage of Income ............................................................................. 29
Appendix B: Output from SAS Enterprise Miner..................................................................................... 30
Appendix C: Data File Variables in SAS ................................................................................................... 31
Appendix D: SAS User Specification ........................................................................................................ 32
Appendix E: Segment Output SAS ........................................................................................................... 33
Appendix F: Demographic Cluster Variable SAS ..................................................................................... 34

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Executive Summary
This report will examine the benefits of implementing a Customer Relationship Management system for
Oxfam Canada, a non-profit organization. We will explore the industry as a whole and how techniques
such as data mining in software programs such as SAS Enterprise Miner can help create a better
relationship with donors. Ultimately we will look to help Oxfam define customer segments and how to
better market to each individual segment specifically.

Currently there are over 170,000 charitable and non-profit organizations in Canada. Overall, this sector
contributes an average of 8.1% of the total Canadian GDP. On average Canadians donate approximately
0.8% of their annual income resulting in $10 billion dollars being donated each year. Oxfam Canada is a
registered charity that is an affiliate of the international Oxfam Confederation, formed in 1995 by 17
independent non-governmental organizations from around the world. These organizations wanted to
work together to reduce poverty and injustice. Oxfam now works together with partners and local
communities in more than 90 countries.

CRM is a process that addresses all aspects of identifying customers, creating customer knowledge,
building customer relationships, and shaping their perceptions of the organisation and its products.
However CRM for non-profit organizations may be challenging since they are not providing any tangible
product or any specific services that have direct benefits on donors in exchange for donations. Since
they need to perpetually seek funding sources, maintaining relationships with current donors and
constituencies, as well as managing business operations while delivering high quality services is crucial.

For Oxfam Canada to grow its donation base and become a more adaptable and efficient operation they
must employ a strategic and concise data mining operation; which in turn will help them run an effective
CRM program. By understanding their customer base and the different segments within that base they
can better target each segment. This will not only save money in operational costs, which in turn will
translate into higher dollar amounts to their various causes, but it will also help to engage current
customers and help to retain these customers.

By accurately profiling customers, organizations can determine which markets have the greatest
potential. Then by identifying and understanding the customers in the cluster where you have the
highest penetration, you can target marketing activities specific to those who are likely to donate to
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Oxfam. Upon our analysis of Oxfams transactional history we were able to create four distinct donor
profiles using SAS Enterprise Miner. These customer profiles represent 85% of the organizations
customers, while the remaining 15% will be grouped into a category of unpredictable donors.

Lastly, in using a number of marketing techniques Oxfam will be able to develop and sustain
relationships with donors in each customer segment that will create a higher customer lifetime value.
This will translate into a greater source of revenue or funding as a result of receipted donations.

Introduction
As our proposal had suggested, continuing using and expanding Oxfam Canadas data mining operations
will not only improve operational efficiencies it will also maximize donation amounts in both the short
and the long term. By having sufficient, accurate and accessible data about their donors, they can
interpret and create a strategy using software such as SAS. This will not only distinguish patterns but will
help Oxfam to divide their target market up into clear and understood segments. In this report we will
define, explain and make recommendations on how to better to engage these segments.

Industry Background
Currently there are over 170,000 charitable and non-profit organizations in Canada; 85,000 of these are
registered charities recognized by the Canada Revenue Agency. Overall, this sector contributes an
average of 8.1% of the total Canadian GDP which is more than the retail trade
industry and close to the value of mining, oil and gas extraction industry. Its revenues account for 24% of
Canadas GDP which is more than 3 times that of the motor vehicle industry. The charitable and nonprofit sector also employs over two million Canadians (Sector Source, Charitable and non-profit sector).
While donations are a large source of revenue for non-profit organizations, government funding
accounts for nearly 21% of income for this industry.

Charitable Contributions
Most Canadians people give to charity in some form, whether it is money, toys, food or time; however
statistical trends indicate that fewer people are claiming tax deductions and are unsure of how much is a
reasonable amount to give (Friesen, 2013). The Globe and Mail notes that on average, Canadians give a
little less than 1 percent (0.8) of their annual income to charity and that this number is significantly
different per community, as demonstrated in Appendix A (2013).

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Recent statistics, from 2010, show that 84% of Canadians aged 15 and over (about 23.8 million
Canadians) donated to charitable and non-profit organizations, with each donor supporting an average
of 3.8 charities and non-profit organizations (Statistics Canada, 2012).

(Sector Source, Research about giving in Canada)

Overall, roughly $10 billion dollars is being donated by Canadians annually, with an average donation of
about $446 per individual (Statistics Canada, 2012).

(Sector Source, Research about giving in Canada)

A recent Statistics Canada survey indicates that the top percent of donors gave more than $1000,
doubling the national average.

Demographics
Demographics are socioeconomic characteristic of a population expressed statistically. In this case,
donors to the charitable and non-profit sector will be segmented based on age. This will help evaluate
the customer profiles created for Oxfam in comparison to the national averages.

The rate of giving (the percentage of people in a certain category), are highest among those aged 35-54
years old, at 89% of those 35-44 and 88% of those 45-54. The average amount donated increases by age
with those in the 65+ category giving $643 on average annually (Statistics Canada, 2012). Below is a
chart detailing the differences in charitable giving by age.

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(Sector Source, Research about giving in Canada)

Psychographics
Psychographics are an analysis of consumer lifestyles to create a detailed consumer profile. In this case,
the analysis will be conducted on what motivates consumers to donate to charities and non-profit
organizations.

The Canada Survey of Giving, Volunteering and Participating (CSGVP) notes that Canadians are clearly
motivated to donate because they care for their fellow citizens and having a social impact (Sector
Source, Research about giving in Canada). Below is a breakdown of Canadians reasons for donating:

Compassion for those in need (89%)

Personally believe in a cause and want to help (85%)

Contribute to our communities (79%)

Personally affected by an organizations cause (61%)

Religious obligations or beliefs (29%)

Income tax credit (23%)

Company Background
Oxfam is an international confederation of 17 organizations working together with partners and local
communities in more than 90 countries, as seen below in Figure 1 (Oxfam International, 2015). Oxfam
strives to empower people to help end poverty and works with vulnerable women and men to end the
injustices that cause poverty. Typically found in the Americas, the Horn of Africa, Southern Africa, and
South Asia, Oxfam also believes in equality and realizing basic human rights across the globe.

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Figure 1: Countries Where Oxfam Works

(Source: Oxfam America)

Formed in 1995, by a group of independent non-governmental organizations with the same modern
goals of eliminating poverty and injustice, Oxfam was derived from the Oxford Committee for Famine
Relief, founded in Britain in 1942. Today, in Canada, Oxfam is active in education, policy advocacy and
building a constituency of support for our work (Oxfam Canada, 2015).

Specifically, Oxfam works to establish basic human rights, supports environmental sustainability,
conservation, attempts to combat climate change, and promotes HIV and AIDS awareness. In crisis,
Oxfam is on the ground, providing immediate lifesaving assistance. Oxfams engineers dig water wells,
install pumps, and even physically transport water to victims for relief.

Sources of Funding
Oxfams greatest source of funding is the money they receive from the Canadian Government at 51% of
all of their overall revenue. Next is receipted donations at 33%. This refers to donors who receive a tax
receipt after their donation that can be used as a deduction on their personal taxes.

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(Source: Canada Revenue Agency)

In implementing a CRM system, we will strive to increase the amount of receipted donations for Oxfam
Canada.

Introduction to CRM
CRM is a process that addresses all aspects of identifying customers, creating customer knowledge,
building customer relationships, and shaping their perceptions of the organisation and its products.
However CRM for non-profit organizations may be challenging since they are not providing any tangible
product or any specific services that have direct benefits on donors in exchange for donations. Since
they need to seek funding sources constantly, maintaining relationships with current donors and
constituencies, as well as managing business operations while delivering high quality services is crucial
(CRM Switch Staff, 2013). Non-profit organizations therefore should focus more on being relationshiporiented in order to gain and retain donors.
In developing our CRM recommendation, we will be looking into data, analyzing it using SAS, statistical
analysing software, and discussing how Oxfam can implement this data into its CRM in order to
maximize its benefits in the long term. First, we will use SAS to segment the data. Second, we will
analyze the segments according to their characteristics. Finally, we will give Oxfam a recommendation
on which marketing strategies to use for each segment. As well as that, we will also look into how CRM
can be utilized in marketing techniques and how Oxfam can manage the multichannel communication
between segmented donors and the organization.

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Implementation Plan
For Oxfam Canada to grow its donation base and become a more adaptable and efficient operation they
must employ a strategic and concise data mining operation; which in turn will help them run an effective
CRM program. By understanding their customer base and the different segments within that base they
can better target each segment. This will not only save money in operational costs, which in turn will
translate into higher dollar amounts to their various causes, it will also help to engage current customers
and help to retain these customers. Retaining these customers will not only increase the lifetime
customer value, but it will also save money on the acquisition of new customers.

Our recommendations for Oxfam Canada are to continue collecting data, using software such as SAS and
to continue recruiting new talent in the analyzing of this data. It is important to have good reliable data
to work with, but it is equally important to be able to execute every step in the data mining and CRM
processes. Once Oxfam Canada has acquired reliable data, they can run it through a recommended
program such as SAS and have qualified employees analyze the data to allow for clear and precise
segmentation. This process will have to be done on a regular basis. Adjustments and adaptations will
have to be made to keep Oxfam Canada current and efficient.

SAS Description
SAS stands for Statistical Analysis System and was developed by SAS Institute. It was created at North
Carolina State University from 1966 1976. The next generation of SAS was developed in the 1980s and
1990s, and was simplified with a point-and-click method in 2004 and further added onto with a social
media analytics in mind in 2010. Alan C. Acock wrote that SAS programs provided extraordinary range
of data analysis and data management tasks (Wikipedia.org, 2015).

By taking raw data and running it into clusters and then refining it, you are able to divide your market up
into measurable segments as seen in Figure 2. Defining these segments can not only help to understand
your customers needs it can give you a better idea of customers past behaviors which are an excellent
predictor for future behaviors. By knowing the customers behaviors it also allows Oxfam Canada to
become more adaptive in how it interacts and engages each segment.

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Figure 2: Market Segments

(Source: SAS Enterprise Miner)

The SAS program analyses the data and illustrates it in various histograms and pie charts; this not only
allows for more visual interpretation, but it more easily allows you to breakdown and change some of
the variables to better understand the data. An example of the interpreted segment data given by SAS is
in Appendix B, which not only shows the variables which define that segment, but also compare this
segments breakdown to the breakdown of the total population. The demographic cluster illustrates such
a breakdown.

Segmentation Process
In order to complete a segmentation analysis for Oxfam Canada we received transactional data from a
large file. To complete this analysis we are using the program SAS Enterprise Miner. There are two
significant aspects to this software; one which entails using programing to create our own statistical
functions and model to analyze data, while the other uses SAS visual analytics explorer to analyze the
data in a more comprehensible manner. The process in which we used to segment the data file is as
seen in Figure 3 below and will be described in greater detail.

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Figure 3: SAS Segmentation Process

(Source: SAS Enterprise Miner)

Step 1: Data File


For this segment analysis for Oxfam Canada we are using a data file titled PVA97NK. This file has over
9600 ID numbers comprised of customer information from transactional data. The file contains
important information about who donates, how often they donate, and how much they donate, refer to
Appendix C for the full list of variables.

Step 2: Filter
Once the data file was inserted into the workstation within SAS Enterprise Miner, we applied the SAS
filter node to run an analysis designed to determine which variables were significant and where we
needed to edit particular variable. In using the filter node we were able to refine our data, validate it
and test these variables without making any permanent changes to our main data file. In using this filter
we were able to exclude some data entries that were found to be irrelevant such as, an income less of
$0 and an age of below 1 year old.

Step 3: Cluster Analysis


Once the main data file was filtered we were able to apply the cluster node to generate segments within
the software. This allows us to group customers with similar information. To effectively evaluate this
information, under the train field we selected the user specify method to allow us to individually
manage the high end and low end limits of the data file, as demonstrated in Appendix D. In this stage we
also selected a maximum cluster amount of 10 so that the clusters remain manageable and substantial.

Step 4: Segment Profile


In this stage of the analysis the groups were defined during the cluster analysis are developed into
meaningful segments, as shown in the output of Appendix E. We exclude certain variables from this
stage of the analysis such as distance give average 36 and promotion count, since they were not

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relevant to defining our segments. After running the analysis SAS Enterprise Miner was able to produce
4 significant segment profiles.

Step 5: Interpretation
Lastly we interpreted the results of the segment analysis that produced 4 groups. These segments are
statistically different from one another and include 85% of Oxfam Canadas customer base. The
description of each segment will be discussed later in the report.

Benefits of Profiling
Performing customer segmentation can help an organization understand who their customers are
(Mapping Analytics). It can benefit Oxfam in a number of ways, such as (Info Entrepreneurs):

Understanding untapped market potential

Identifying their most and least profitable customers

Improving targeted marketing

Avoiding unprofitable markets

Building loyal relationships with customers

Determining how to use resources wisely

Grouping customers by factors such as geographical location, size and type of organization, type
and lifestyle of consumers, attitudes and behaviour

By accurately profiling customers, organizations can determine which markets have the greatest
potential. Then by identifying and understanding the customers in the cluster where you have the
highest penetration, you can target marketing activities specific to those who are likely to donate to
Oxfam. This form of highly targeted marketing will increase ROI by precisely marketing to prospects in
ways that will appeal to them (Info Entrepreneurs).

Donor Management
Since individual customers have different needs, its more effective to market to them based on
grouping donors with similar needs. This will allow Oxfam to 1. Customize donation offers and packages
for each segment, 2. Aim marketing efforts at particular groups saving both time and money, 3. Focus on
the most profitable donors (Info Entrepreneurs).

Oxfam can then choose to target large segments with many donors and/or on a more niche segment,
which have fewer people but who can be served well (Info Entrepreneurs). Instead of trying to meet the
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needs of several segments, they should aim to target a manageable number of segments with a good
number of customers.

Segmentation Profiles
Upon our analysis of Oxfams transactional history we were able to create four distinct donor profiles
using SAS Enterprise Miner. These customer profiles represent 85% of the company's customers, while
the remaining 15% will be grouped into a category of unpredictable donors. Figure 4 below represents
Oxfam Canadas segments.

Figure 4: Donor Profiles as a Percentage of Customer Base

Donor Profiles
15%
31%

7%

Chris Pratt
Meryl Streep

17%

Dakota Fanning
Donald Trump

30%

Nicolas Cage

(Source: SAS Enterprise Miner)

These profiles are designed to help Oxfam understand their customers and their motivations. In order to
give these profiles a familiar appeal we have named each segment after a well-known celebrity that
shares a relatable variable such as age or a characteristic. Below are detailed descriptions of each
segment profile and which marketing strategies should be implemented to better target that specific
donor group.

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Segment 1

Chris Pratt

Age: 25 55 years old


Income: $40,000 - $60,000
Home Value: $40,000 - $120,000
Geography: Outer suburbs
Donation Amount: $5.00 - $10.00

Number of Donations: 4 12 times per year


Yearly Value: $20.00 $120.00
Characteristics: Career, full-time job, family,
raising kids, taking care of older parents, low
disposable income, socially aware, caring,
responsible, active lifestyle, busy, generous
Percentage of Customers: 31%
Status: All Stars

This segment is the largest of Oxfams donors accounting for 31% of their total customers. They donate
small amounts but frequently throughout the year. According to Statistics Canada, this segment donates
less than the national average of $404 for 25 - 55 year olds but are of a high value to Oxfam (2012). The
All Star status indicates that some of these donors make donations in each month of the year.

According to the Canada Survey of Giving, Volunteering and Participating (CSGVP), this segment is most
likely to be motivated by having compassion for those in need, personally believing in the case and
wanting to help, and wanting to contribute to the community (Sector Source, Research about giving in
Canada). It is because of this passion for helping others that they are able to donate while having a low
disposable income, hectic schedule and large responsibilities.

Marketing Strategies
In order to successfully market to these individuals we suggest making donating as simple and stress
free as possible. We suggest setting up a kiosk booth in high traffic areas such as local malls where the
strategy is to get them to donate on a monthly or quarterly basis. Since these individuals may have less
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disposable income its important to emphasize that donating $5 - $10 monthly can make a big difference
for a child somewhere else in the world. Its also important to stress the fact that Oxfam advocates for
woman and childs rights. This group is likely to be in the early or later stages of family life and will likely
be emotionally impacted by the cause.

It should also be noted that marketing to this segment as a family will be beneficial to Oxfam. By
encouraging kids to be part of donation and/or fundraising process they can encourage their parents to
be more actively involved. Since Oxfam is an advocate for improving childrens rights around the world,
if they can teach kids how they can improve someones life at a young age then they can engage them in
charitable work for their lifetime. This can include a semi-annual family fair events where kids can
donate and receive stuffed animals and free games. Another option to market towards this segment is
to create a partnership with sports teams. Sporting events such as hockey and soccer are very family
friendly occasions. Since both children and adults often idolize athletes it provides an opportunity for
them to be influenced by opinion leaders to help support the community.

Segment 2

Age: 65+ years old

Meryl Streep

Income: $40,000 - $80,000


Home Value: $40,000 - $120,000
Geography: Inner suburbs
Donation Amount: $10.00 - $50.00
Number of Donations: 12 24 times per year
Yearly Value: $120.00 $1,200.00
Characteristics: Retired, finishing career,
working part-time, volunteering, relaxed
lifestyle, looking to give back, low disposable
income, caring, generous, self-actualization
Percentage of Customers: 30%
Status: All Stars

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This segment is the second largest of Oxfams donors accounting for 30% of their total customers. They
donate average amounts but extremely frequently throughout the year. This segment falls within that of
the national average for donors over 65 years old in which Statistics Canada reports they donate $643
annually (2012). The All Star status indicates that these donors make donations in each month of the
year.

According to the Canada Survey of Giving, Volunteering and Participating (CSGVP), this segment is most
likely to be motivated by having compassion for those in need, wanting to contribute to the community,
or having been personally affected by an organizations cause (Sector Source, Research about giving in
Canada). These donors are in a position in their lives where they are reflecting upon what they have
achieved in their lifetime and really are in a position to reach their potential or self-fulfillment. They are
also likely to be retired giving them the opportunity to volunteer more frequently.

Marketing Strategies
In order to effectively market to this segment Oxfam should look to partner with a company such as
McDonalds. Since this segment is primarily composed of seniors it is not likely that they will be affected
by any digital marketing. Instead, they are likely to be influenced at touch points or physical contact.
McDonalds is a popular fast food company known for offering senior discounts to those over 55 years
old. If Oxfam were to run a campaign with a portion of McDonalds coffee purchases being donated to
people in need then it would provide seniors with an opportunity to give small donations when they can
afford it.

Another platform Oxfam should consider in marketing to this group is television, specifically
commercials during the nightly news. Seniors still often do not miss an episode of the news. It is how
they hear about world events and that their age being socially aware and active is very important to
them. By showing a commercial demonstrating how their donation will help people around the world
will likely appeal to them. As well as that they should end the commercial with a strong call to action
and a response device such as a telephone number. Seniors are not the most computer savvy and would
appreciate the opportunity to talk to someone in person using a platform that they are comfortable
with.

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Segment 3

Dakota Fanning

Age: 5 25 years old


Income: $0 - $40,000
Home Value: $0 - $40,000
Geography: Urban core
Donation Amount: $10.00 - $25.00

Number of Donations: 1 4 times per year


Yearly Value: $10.00 $100.00
Characteristics: students, kids, young
professionals, low disposable income, live
with parents or renting apartment, active
lifestyle, social media savvy, socially aware
Percentage of Customers: 17%
Status: None

This segment is the third largest of Oxfams donors accounting for 17% of their total customers. They
donate small to average amounts but very infrequently throughout the year. According to Statistics
Canada, this segment donates less than the national average of $143 for under 25 year olds but are still
very important to Oxfam as they present the possibility of high customer lifetime value (2012).

As reported by the Canada Survey of Giving, Volunteering and Participating (CSGVP), this segment is
most likely to be motivated by personally believing in the cause and wanting to help, or having been
personally affected by an organizations cause (Sector Source, Research about giving in Canada). This
segment is likely to be students with minimal income; however, they are also likely to still live at home,
on campus, or share rent with roommates. These teenagers or young adults have grown up being
socially aware and will be likely to be committed to supporting an organization that they believe in.

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Marketing Strategies
With this segment predominantly composed of students, there is an opportunity to market towards
them through universities. An event such as a benefit concert that partners with several local
universities will encourage students to donate by allowing them to support a good cause while listening
to music and hanging out with their friends. This type of event would be most successful during the
summer when the school year has finished. Since music festivals have become increasing popular in the
last five years this provides a great opportunity to promote a social cause.

This segment is also much younger than all the other groups meaning that they are the most likely to be
influenced by social media and digital marketing campaigns. Running real-time campaigns after
something such as a natural disaster through platforms such as Facebook and Twitter will be an effective
way to reach this segment.

Segment 4

Age: 45 - 65 years old

Donald Trump

Income: $100,000+
Home Value: $400,000 - $600,000
Geography: Urban
Donation Amount: $50.00 - $200.00
Number of Donations: 1 8 times per year
Yearly Value: $50.00 $1,600.00
Characteristics: Large disposable income,
career driven, busy lifestyle, seek status and
recognition, adult children, enjoy networking
events, social and self-interests
Percentage of Customers: 7%
Status: None

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This segment is the smallest of Oxfams donors accounting for just 7% of their total customers. They
donate large amounts but very infrequently throughout the year. This segment falls within that of the
national average for donors aged 45 - 65 years old in which Statistics Canada reports they donate $552
annually (2012). While this is a small portion of Oxfams donors they contribute to a large amount of
their fundraising efforts.

As reported by the Canada Survey of Giving, Volunteering and Participating (CSGVP), this segment is
most likely to be motivated by personally believing in the cause and wanting to help, having been
personally affected by the organizations cause, or for income tax credit purposes (Sector Source,
Research about giving in Canada). This segment comprises of established career professionals. They
have a large disposable income and do not need to support any young children. The look to seek status
and recognition in both their personable and professional lives causing them to donate out of their own
self-interest as well as social interest.

Marketing Strategy
This segment is unlikely to give throughout the year; instead they are likely to give a large amount once
or twice a year. They are generally a high valued member of society and like to receive some sort of
recognition for their charitable efforts. Thus, we suggest having a gala event once a year for this
segment. It gives them an opportunity to be charitable while networking and receiving some sort of
recognition for their donation.

Another opportunity in marketing to this segment would be to arrange partnerships with companies.
These individuals are likely to own a company or be in a decision making position for a large
organisation. Since they are busy professionals by targeting them at their place of work, Oxfam can help
save them time.

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Segment 5

Nicolas Cage

Age: 5 65+ years old


Income: $0 - $100,000+
Home Value: $0 - $600,000
Geography: Unknown
Donation Amount: $1.00 - $200.00

Number of Donations: 1 100 times per year


Yearly Value: $1.00 $20,000.00
Characteristics: This portion of the population
represents the unknown customer. They may
donate very little or extremely large amounts.
They are considered to be unpredictable.
Percentage of Customers: 15%
Status: None

This segment is unlike any of the other four segments. Its comprised of the unknown donors who do
not have enough information to profile. This group accounts for 15% of Oxfams total customers. Since
their information is relatively unknown they cannot be compared to the national average. Transaction
history indicates that they may donate as little as $1 once per year to as much as $200 over 100 times
per year; this results in their yearly potential value being anywhere from $1 to $20,000.

These are important donors for the organization; however, since there is little knowledge of their
demographics and psychographics they cannot be effectively profiled and individually marketed to.

Marketing Strategies
Since this segment represents the unknown population there is no way to market to them specifically.
Instead the best approach for this group is to use mass media marketing.

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CRM Marketing Techniques


A number of CRM techniques can be applied to any or all of our differentiated segments. In this section,
we set out to detail the best methods and models that can help Oxfam Canada reach their ultimate
goals of acquisition and retention, in a more efficient manner.

Cross-selling is the sale of products to current customers who are already purchasing one or more
products from the supplying company (Peelen and Kowalczyk, 1999). Due to nature of a non-profit
organizations limited product line, we would be recommending cross-selling over time to the donor.
Perhaps, the Donald Trumps would make two large contributions rather than one at an annual event if it
meant more recognition for them. Or, maybe the Chris Pratts would buy two or more different products
during a single contact. For example, they may make a donation on behalf of their family, but then also
on behalf of one or more of their children for a specified childrens donation.
Another CRM strategy we recommend Oxfam to employ would be the use of crowdsourcing.
Crowdsourcing is a way to enable customers to contribute to the innovation process by engaging the
masses, the crowd, non-professional bystanders, to get involved in carrying out some of the companys
tasks or roles (Peelen and Beltman, 2013). We think getting donors involved and interested in what
Oxfam does as a non-profit would be successful among Chris Pratts, and even more successful among
the Dakota Fannings. Since crowdsourcing is very effective online, the Dakota Fannings would likely
have the most exposure to Oxfams efforts.

A proven method of generating interest among customers/clients is to get them involved in the process.
If Oxfam asked its donors to collaborate with them on the construction and contents of a new womens
shelter in Botswana, for example, the outcome would likely be very successful, with many ideas
submitted. Not only does this create lifetime value for the winning contributor, but Oxfam would have
the ability to convert this individual from a prospect to an advocate, almost overnight. If Oxfam offered
a sweepstakes as part of their crowd sourcing efforts and gave away the chance to help construct said
womens shelter, this would have great potential for success. That individual is going to be able to see
the people and poverty firsthand and be able to gain a sense of pride they wouldnt have otherwise
gained sitting behind their computer in Canada, making an e-donation. Upon returning home,
considering the Dakota Fannings online habits, they would share many positive remarks about Oxfam on
social media and other web outlets, thus completing a very successful campaign for Oxfam.

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When analyzing Figure 5, Differentiation in the Multichannel Mix, we can get a good sense of the
availability and service level of our segments and the commitment classification they fall into (Peelen
and Beltman, 2013). There are three levels of commitment, Bronze, Silver, and Gold, with Gold being
Oxfams most committed donors. the Chris Pratts and Meryl Streeps would fall into the Gold category,
the Dakota Fannings in Silver, and the Donald Trumps and Nicholas Cages in Bronze.

Figure 5: Differentiation in the Multichannel Mix

(Source: Peelen, Customer Relationship Management PowerPoints on the web, 2nd edition Pearson Education
Limited 2014)

Looking at the accessibility to these donors, we see that Gold members receive more information
through mediums such as telephone and email. This is perfect for the Chris Pratts; due to their hectic
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on-the-go lifestyles, they may miss an email, but appreciate a phone call. The Meryl Streeps are older,
likely retired, and have more time on their hands. They enjoy being up to date on current Oxfam news
and offers. The Dakota Fannings may be in school and wont appreciate being bombarded with offers all
the time, putting them into the Silver category with moderate accessibility. Contrary to the Gold
members, the Donald Trumps are Bronze members as they likely wont respond to phone calls or emails.
The Nicolas Cages are also Bronze members, as they are unpredictable. While they may respond, they
are just as likely to not, therefore, resources can be better spent elsewhere. As far as service levels are
concerned, Gold members get more attentive service with faster response times and general
personalization. Communication is dealt with on a face-face level with Gold members and typically
through online means for Silver and Bronze members. Additional service levels that include newsletter
frequency, costs and incentives, all favor Gold members, due to their profitability potential and value to
the organization.

Exploring current web developments is also important when it comes to our segments, particularly, the
Dakota Fannings, Chris Pratts, and Meryl Streeps. Web 3.0, with its accurate web searches, is an
important attribute for the older generation. They are typically more hesitant to use technology to begin
with, therefore, if they do use the internet and they search for Oxfam information and cant find what
they are looking for, there will be more reluctance to use it again going forward. Further improving
these attributes is something we strongly recommend as this would be beneficial to Meryl Streeps.

However, are our main point of interest focuses on the innovation of Web 4.0. This new age web system
is said to combine the senses, such as sound and smell to create a whole new virtual-reality-style
experience; it is to be all about the emotion of the user. We believe this modernization would be wildly
successful for Oxfam. Often, one of the biggest hurdles is empathy when it comes to donations for a
non-profit organization. Its very difficult to imagine the heartaches and struggles of someone living in
poverty as you sit in your air-conditioned living room in your two-story home surfing the web on your
new laptop. That connection is difficult to make and many times, people will pass on donating. With
Web 4.0, donors could experience the lifestyle of victims firsthand and have a much more realistic sense
of where their donation ends up. We believe the level of empathy of donors would skyrocket and
donations would naturally follow suit. The Dakota Fannings would likely be the first to experience such
innovation due to nature of their online generation, and early adopting behaviors. However, we also

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think that the Chris Pratts would be inclined to use Web 4.0 to its full potential due to that fact that their
children would be interested in it.

Limitations
In studying the benefits of implementing CRM for Oxfam Canada we were faced with several limitations.
The first of which was the limited time frame that we had to complete this analysis. We did not have
adequate time to learn the software SAS Enterprise Miner and analyze the data. The next limitation was
our data quality. We had to make several inferences and assumptions about the data since it was not
the transactional data specific to Oxfam. There were also customers IDs missing several values. Another
limitation was the variables themselves. Some entries did not make sense and had to be adjusted to
support the analysis. One variable specifically did not explain what each label or number represented
meaning that we could not determine which region each ID belonged to. We made the assumption that
the regions represented states within the United States of America, as per Appendix F; however, since
there was no evidence we were unable to use this variable in our analysis. The next issue in our data
analysis was that we unsure of how to properly label the axis for our graphs. Instead of readjusting the
labels for each segment we had to individual select to show the axis on each graph. Lastly we had to
make several assumptions about our segments. Since each segment did not include the same
information we made inferences as to the missing information based on the pieces of information that
we did have.

Recommendations
In conclusion, we recommend Oxfam to collect meaningful data and analyse it regularly, employ a
strategic and concise data mining operation, perform donor segmentation, implement the data result
into a CRM system and use targeted marketing techniques. Oxfam can outsource their data analysis or
to hire professionals so that a strategic and concise data mining operation can be performed to generate
effective CRM. Within the data analysis, segmentation is extremely important since it helps the
organization to gain more insight into its donors. They can then implement effective CRM and marketing
strategies such as cross selling, crowdsourcing, and arrange different campaigns for each segment. The
correct usage of CRM and marketing strategies can then help the organization to penetrate more into
more target markets and gain greater donations.

We have developed five customer segments using SAS Enterprise and recommend using different
marketing techniques to target each profile. The following table summarizes the characteristics of each
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segment and our recommendation on the marketing strategies that should be implemented for each
group.
Table 1: Segment Profile Marketing Recommendations
Segment Characteristics
Chris Pratt
Account for 31% of the total Oxfam donors
25~55 years old
4~12 times at $20~$120 donation per year
Prefer simple and stress-free

Marketing Strategies Recommendation

Kiosk booth at high population places.


Partner with sports team.
Partner with family occasion events

Meryl Streep
Account for 30% of the total Oxfam donors
65+ years old
12~24 times at $120~$1200 Donation per year
Retiring, have more relaxed time, self-actualization,
motivated by empathy and self-fulfillment.

Non-digital approach
Partner with places where lots of
seniors gather ex. McDonald's
TV commercials, news channels

Dakota Fanning
Account for 17% of the total Oxfam donors
5~25 years old
1~4 times at $10~$25 donation per year
Low income, students, just graduate
Motivated by personal beliefs, cause and wanting to
help

Donald Trump
Account for 7% of the total Oxfam donors
45~65 years old
Very infrequent at $50~$1,600 donation per year
Large disposal income
Motivated by personal believing
Seek for social recognition and status
Donate for self-interest and social interest

Nicolas Cage
Account for 15% of the total Oxfam donors
Unclear and unknown information on Personal
information.
$1~$20,000 donation per year
Lack of data information

Marketing towards schools,


universities.
Held charity music festival, concerts to
attract donations
Promote heavily through social media
and technology platforms. Web 3.0,
Web 4.0
Gain and retain through volunteering
program
Held gala event to induce more
donation by providing them the feeling
of social recognition and social status
Partnership with corporation for their
interests in tax deduction

Unknown to be reached, mass media


marketing

Also, we recommend that Oxfam aim to increase its popularity throughout Canada. The cross Selling
method may be applicable by highlighting different types of charity work under the Oxfam umbrella,
such as from supporting womens right to supporting childrens poverty. Crowdsourcing may also be
applicable as they can involve donors, partners, and the public through volunteer programs. In this way,

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Oxfam may be able to convert an individual from a prospect to an advocate in a shorter period of time.
Once an individual has realized the achievement that he or she made, or has experienced the real
sufferings that others have through being involved in events, that individual is going to be able to gain a
sense of pride that they wouldnt have otherwise gained by just donating in front of a screen. However,
the internet and associated technologies are also still important. Oxfam should be aware of the current
web development. There is great customer lifetime value potential for Oxfam to build with the Dakota
Fanning segment. This is the segment which is highly adapted to technologies and are young, therefore
for Oxfam to be advanced in technologies is necessary. On the other hand, Oxfam can also retain a
strong customer lifetime value with the Chris Pratts children. Once Oxfam is able to develop the habit
for Chris Pratts to donate, their children are very likely to donate to the same charity when they grow
up. In a broader sense, Oxfam should also differentiate the segment in the multichannel mix. Thus we
can get a good sense of the availability and service level of our segments and the commitment
classification they fall into. Overall, Oxfam should collect enough meaningful data, generate useful
information regarding to donors characteristics, and implement the result into CRM and perform
marketing techniques accordingly. While seeking for new donors, Oxfam should also put effort into
gaining and building relationships with younger generations who have high lifetime value.

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References
Canada Revenue Agency (2014). Oxfam Canada. Retrieved from http://www.craarc.gc.ca/ebci/haip/srch/t3010form22quickview-eng.action?r=http%3A%2F%2Fwww.craarc.gc.ca%3A80%2Febci%2Fhaip%2Fsrch%2Fadvancedsearchresulteng.action%3Fn%3Doxfam%26amp%3Bb%3D%26amp%3Bq%3D%26amp%3Bs%3Dregistered%2
6amp%3Bd%3D%26amp%3Be%3D%2B%26amp%3Bc%3D%26amp%3Bv%3D%2B%26amp%3Bo
%3D%26amp%3Bz%3D%26amp%3Bg%3D%2B%26amp%3Bt%3D%2B%26amp%3By%3D%2B%26
amp%3Bp%3D1&fpe=2014-03-31&b=129716866RR0001&n=OXFAMCANADA
CRM Switch Staff (2013). CRM solutions for non-profit organizations. CRM Switch. Retrieved from
http://www.crmswitch.com/buying-crm/nonprofit-crm-buying-guide/
Friesen, J. (2013). What Canadians give: How charity depends on where you live. The Globe and Mail.
Retrieved from http://www.theglobeandmail.com/news/national/what-canadians-give-howcharity-depends-on-where-you-live/article16065426/
Info Entrepreneurs (2015). Segment your customers. Retrieved from
http://www.infoentrepreneurs.org/en/guides/segment-your-customers/
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http://www.mappinganalytics.com/customer-profiling/customer-profiling-benefits.html
Oxfam America. (2015). Countries we work in. Retrieved from
http://www.oxfamamerica.org/explore/countries/
Oxfam Canada. (2015). About Oxfam, Introduction to Oxfam. Retrieved from
http://www.oxfam.ca/about/introduction
Oxfam Canada. (2015). Our Work, The Way We Work. Retrieved from: http://www.oxfam.ca/ourwork/our-approach
Oxfam International. (2015). About Us, Who We Are. Retrieved from https://www.oxfam.org/en/about
Peelen, E., & Beltman, R. (2013). Customer Relationship Management (2nd ed.). Harlow, UK: Pearson
Education.
Sector Source (2015). Research about giving in Canada. Imagine Canada. Retrieved from
http://sectorsource.ca/research-and-impact/sector-research/giving-research
Sector Source (2015). What is the charitable and non-profit sector? Imagine Canada. Retrieved from
http://sectorsource.ca/research-and-impact/sector-impact
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Statistics Canada (2012). Canada Survey of Giving, Volunteering and Participating. Retrieved from
http://www.statcan.gc.ca/daily-quotidien/120321/dq120321a-eng.htm
Wikipedia (2015). SAS (software). Retrieved from: https://en.wikipedia.org/wiki/SAS_(software)

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Appendices
Appendix A: Giving Level as a Percentage of Income

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Appendix B: Output from SAS Enterprise Miner

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Appendix C: Data File Variables in SAS

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Appendix D: SAS User Specification

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Appendix E: Segment Output SAS

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Appendix F: Demographic Cluster Variable SAS

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