Whether it’s sending out an ask, an update on a project, or a thank you letter, a nonprofit’s message isn’t effective unless it reaches the right donor at the right time.
Reaching out to a selected group of donors can sometimes miss the mark and not make it to the intended audience. Understanding the basics in donor segmentation is your best defense against such an oversight.
What is Donor Segmentation?
A strong donor segmentation is much more than just breaking up your donor list into the basic demographic groups that define your community by age, location, or gender. A multifaceted segmentation strategy separates donors in a variety of ways with the singular purpose of delivering targeted messages specifically related to the message being sent. Segmented groups can focus on a donor group’s behaviors, interests, networks, involvement in the organization, or other information that is typically not included in a nonprofit’s standard data management system.
The data gleaned from a highly contextualized segmentation process will help finding obscure commonalities and group them into special interest donor groups for a more focused approach outreach when communicating. This, in turn, can lead to higher open and click through rates and initiate more engagement with your organization because you’ve delivered the exact information the selected donors are most interested in receiving.
The Who, What, Why, and How of Donor Segmentation
Drilling down on the most powerful and simple ways to segment your donor list begins by examining the fundamental reasons why donors are choosing to support your nonprofit. Start by thinking about what you want to learn about your donors and place that information into three categories.
- Sociological segmentation focuses on who you are addressing. It delivers information on the donor’s outward-facing identity, such as their cultural, economic, social, and lifestyle traits. This includes the basic demographic information typically used to segment donors by gender, ethnicity, and age. Using sociological segmentation allows you to can create personalized missives that speak to groups of donors who share a general commonality in their lives.
- Preferential segmentation provides information on how best to deliver the communication. This includes the donor’s preferred communications methods, which topics they are interested in, and the mode of payment they typically use when donating. This type of segmentation provides insight into the best way to deliver your message or how to encourage your donors to contribute, such as including a pre-stamped, self-addressed envelope in a direct mail campaign or directing them to an easy to use online donate button through an appeal you’ve posted on social media.
- Psychological segmentation answers the question of why your donors choose to support your organization. It is a more complex segmentation strategy, as it represents the values, passions, and interests of your donors, and the data is more difficult to assemble and compute, however, it illuminates the motives behind a donor’s commitment to fundraising and why they feel an attachment to your organization.
The information you glean from this segment can lead you to you can create more effective outreach materials that will appeal to the key factors donors will engage with the most. Us the data to personalize the ask by emphasizing different aspects of your mission and programs, and highlight outcomes that is important to your chosen donor group.
Donor Segmentation Strategies
A multifaceted segmentation strategy begins by determining which segmentations can provide you with the most effective and appropriate information. We’ve compiled ten of the best types to get you started.
1. Donor Journey Stages
When donors become part of your community, they typically move through five phases of involvement, landing on the one that best suits their level of commitment. Creating messages that are geared toward them can vary greatly in language, graphics, images, and all other elements.
- New donors begin at the “Awareness” phase when they are gathering information about your mission and nonprofit. This occurs the moment they come into contact with your nonprofit, whether through a direct mail campaign, an event, or something else. Basic information and compelling images and graphics work well for this group.
- The “Consideration” phase is the point at which they find the reason why they want to support your mission. At this point in the donor journey, the potential donor is finding out if your organization aligns with their values and interests. Provable data can act as a motivational tool for this group.
- When a donor begins to interact with your nonprofit, they enter the “Engagement” phase of the donor journey. Now they’ve opened the door to a conversation with your nonprofit. This could be by simply opening an email sent out by your communications department or registering for an upcoming event.
- The “Donation” phase is the obvious and important step in the process when a donor chooses to respond to an ask or is motivated to give based on their own initiative. Your appeal should be clear and contains information that will move your segmented donors emotionally.
- The “Commitment” phase is when the donor decides to join the nonprofit’s efforts for a longer period of time and at a deeper level. This could be through an active involvement within the organization, a legacy or subscription donation, or other long-lasting commitments. This type of commitment often takes more thought and planning on behalf of the donor and the nonprofit can support that by offering information and donation options for them to consider.
2. Their Role Within Your Organization
A nonprofit’s donors participate in a variety of ways in your nonprofit. Messages could have a bigger impact if they are scripted to address their preferred type of commitment. The message or mode of delivery may need to be tweaked to speak to your predictable monetary donors, volunteers, board members, peer-to-peer fundraisers, or other key designators.
3. Demographics
The most fundamental donor information is found in the most obvious demographics. Segmenting by gender, age, location, and other basic information can often guide you to use appropriate language, graphics, and other parts of the message.
4. Engagement Level
How your donors engage can tell you a lot about how you should communicate with them. If someone attends every event and gives to every appeal, your next ask may carry a different tone than one sent to a donor who gives once a year around the holidays.
5. Donor Networks
Who your donors are associated with in their professional, cultural, and social lives may lead you to engage in tactics that can spread your message further into groups of potential donors. Sending out a plea to your donor community asking them to spread a fundraising appeal through their networks brings with it the potential to pick up new donors based on the trust and association with their friends and family who already a part of your donor community.
6. How Your Donors Were Acquired
Grouping your donors based on how they first became involved with your nonprofit can provide valuable insight into why they are interested in your mission. Volunteer opportunities may have initially brought a donor into your community, while other donors may be heavily influenced by their friends’ peer-to-peer fundraising efforts. The information gathered from their initial interaction with your nonprofit can inform many aspects to how to make future appeals and can even shine a light on other areas of your nonprofit that donors respond.
7. Shared Interests
Oftentimes, donors are brought into a nonprofit’s community through a shared interest in the mission, such as poverty, animal welfare, etc. These donors often first heard about the nonprofit’s activities through networking efforts made by current donors. Employing an emotional tone in your message could have a big impact on these types of donors.
8. RFM: Regency, Frequency, Monetary Value
Breaking down your donors by their giving style will provide you with data that tells you how long it’s been since their last donation (regency), how often they donate in a selected period of time (frequency), and the average amount of the donation (monetary value). This information could inform when and how often you make the appeal and provide you with a general estimate of the amount you can expect during a giving campaign.
9. Communication Preferences
Segmenting your donors by their preferred type of communication preference can aid in streamlining your marketing strategy and ensure the right people are getting a message with the most impact to motivate them to act. To find this data, group your donors into those who receive information through email, direct mail, through a phone call, in an online chat room or messaging service, on social media networks, or in-person.
The frequency and timing of a message also affects its effectiveness. If a donor group responds to an appeal sent out at the beginning of each quarter or during the holidays, you’ll have a better understanding of where to put your marketing dollars and how to craft the message.
10. Giving Preferences
The mode of banking transaction also provides a wealth of information that can help make your appeals more effective. Do they send in a check, pay online with a credit card, send a quick donation through text, or donate through the website’s “Donate Now” button? Others may be prompted to give based on their friends’ actions as seen on social media websites, crowdfunding and peer-to-peer fundraising, or at in-person events and this information can tell you which tools your segmented group will respond to most.
Evaluating the Success of Your Segmentation Strategy
Donor segmentation is the tool you use to learn how to most effectively reach your donors when making an appeal or even just delivering information about your activities. If you’ve sent out a few messages based on a segmentation strategy but feel you don’t have any better understanding your donors, you may want to go back to the data and reconfigure your strategy or run a few segmentation strategies at the same time. Test the results by sending out a series of messages and refine your approach along the way using different types of messages. Overtimes, their engagement will shine a light on donating behaviors and give you a firm grasp on the trends in the giving habits of your entire community.
