Can Purchase Behavior Predict Relationship Perceptions and Willingness to Donate?

Abstract

ABSTRACTAs arts organizations frequently seek purchases and donations from the same consumers, one of their challenges is identifying which consumers are likely to become donors in the future. With all of the data currently available, many organizations are looking to their databases to predict future consumer behavior. In the customer relationship management literature, models have been developed that allow organizations to use consumer purchase data to predict future purchase behavior. This goal of this research is to extend this literature to determine whether it is possible to predict consumer willingness to donate using purchase behavior data. It is not expected that purchase behavior data will be nearly as accurate a predictor of future donation behavior as past donation behavior would be. Rather, the goal is simply to determine whether organizations would be able to use purchase behavior data as a proxy for relationship perceptions to improve their ability to identify prospective donors among their consumers. Three commonly used methods of prediction based on past behavior are tested using a combination of purchase behavior data and consumer surveys: a segmentation approach, a recency/frequency/monetary value model, and a Pareto/NBD customer relationship management model. Across all three methods, purchase behavior is found to be a poor predictor of both customer relationship perceptions and willingness to donate to the organization.