Appealing to donors and increasing their interest involves customized communication and the best way to boost the effectiveness of your outreach is to segment your donors. By splitting donors into different groups based on similarities, you can make it easier to target each group with the best message. Read more to learn what strategies you can use to retain certain donor segments.
Most nonprofits can’t survive without fundraising, or at least not for very long. Appealing to donors and increasing the chances they’ll take action involves customizing communication to maximize relevance. One of the major ways to boost the effectiveness of your outreach efforts is to engage in donor segmentation.
Donor/audience segmentation happens when nonprofit organizations put their donors into groups based on similarities. As such, nonprofits end up with numerous subpopulations of their whole donor pool. Doing this makes it easier to target each group with the best messaging after determining the content that’s most likely to resonate with them.
Although people often talk about segmentation for marketing purposes, it happens in everyday life, too. Think about how the tone of your message and its content are different when addressing a close family member versus someone you’ve just met. You engage with them differently based on your relationship and what they already know about you or the topic you’re bringing up.
Donor segmentation is similar because it involves tailoring your message for different, identified audience groups. It ensures you’re optimizing your delivery style and content to strengthen the link between your organization and its contributors. Segmentation lets you meet your donors where they are and give them appropriate material that ups their interest in your group or its causes.
Most of the examples discussed here refer to donor segmentation. However, don’t forget how people can show support for your organization without donating. As you read through the following sections and use them in your fundraising tasks, view them through the lens of applying to all audiences — donors or not.
Once an organization starts using segmentation, the representatives in it often remark they shouldn’t have waited so long to get started. This enthusiasm is due to noticeable results. Donor segmentation is an excellent idea for two main reasons:
We’ll go over some specific best practices in the upcoming sections that walk through how to apply different marketing segmentation techniques. Generally speaking, what are some ideal tactics that nonprofits should keep in mind for favorable outcomes?
The below podcast episode from Donorbox discusses the why and how of donor segmentation to help you make your donors feel seen. Give it a listen to ensure you are able to touch your donors’ hearts through your appeals, thank-yous, and other messages of communication.
You’ve probably had several instances over the years where you’ve received mail and thought, “How in the world did I get on this mailing list?” Maybe you were sent a catalog for pet owners, but you’ve never had a furry family member. In the best cases, people in those situations feel mildly annoyed and may even laugh. At worst, they could get so fed up they make sure they never receive any mailings from the provider again.
If people get content they perceive as junk mail, they’ll likely at least look at it for a few seconds before putting it aside or tossing it out. The results can be even worse if individuals receive emails their service providers view as spam. Companies like Gmail take numerous things into account when evaluating how to categorize messages.
One of them is the open rate of the messages received. If a person regularly gets content from a sender — a nonprofit or otherwise — that they never click on, algorithms within the email service will probably classify it as spam. If that happens, the content goes into a separate folder that the recipient may never look at.
When messages are deemed irrelevant, they may not get looked at, so you waste resources distributing them. Moreover, if donors do see content that doesn’t match their needs, you’re more likely to make them feel you don’t value them. Then, it’ll be much harder to convince them to donate or even stay interested in your organization. Plus, without segmenting, donors may feel that you’re asking for money too frequently, resulting in them feeling overwhelmed.
These examples illustrate why it’s necessary to take care when crafting segmented messages for particular donor groups. All your outreach methods could backfire if you don’t apply that technique. Then, you waste both time and money, and your organization may have severe issues with finding willing donors. Now, let’s look at some specific segmentation strategies.
One of the most popular ways that nonprofits engage in segmentation for marketing is to put donors into segments according to gift amounts.
You can have different messaging for people who’ve given more than $100 compared to those that have never contributed any amount more than $25. When you create these segments, be careful not to have too many categories.
For example, segmenting in $10 increments is not a good idea because there’s not enough difference between those groups. However, you could structure the segments as follows:
After you finish segmenting, the most important thing is to be sure the messaging supports the amount the person gave. If your records show that the most someone ever gave at once is $75, an ask of $200 will almost certainly turn them off.
Then, besides asking for the appropriate amounts, you could remind the person of what your organization could do with the money. The charity Heifer International mentions that giving $275 sends a girl to school while contributing $1,000 provides stoves for a village.
If you get specific by telling people how their donations are used and what differences they could make, individuals could feel more excited about giving. Bear in mind, too, that you should shape further engagement activities around trying to get donors to gradually increase their gift amounts. Tracking your success through a donor metrics interface could help you see whether what you’re doing works well or if there’s room for improvement.
This segmentation strategy relates to the one concerning gift amount, but it has a couple of additional elements. Rather than only segmenting by the amount of a donor’s gift, you go further and segment people according to how often they give. This technique is sometimes called the RFM model, for recency, frequency and monetary.
First, we’ll look at recency. This kind of segmentation for marketing works best if you focus on the current year and the four previous years.
Make five categories for each group and give each donor a corresponding numerical score:
Recency (of donation):
Frequency (number of donations per last 25 solicitations from the organization):
Monetary Value (of total donations across the chosen period):
Keep in mind the categories used for the monetary value metric will vary depending on the giving patterns donors usually show.
Once you have these three groups of statistics, focus on the highest-scoring donors. Remember that a person may not necessarily have high scores in every category. Maybe they only give once a year but contribute $1,000 each time. Then, messaging too often could spark donor fatigue.
Being successful with the fundamentals of marketing for nonprofit organizations means understanding how your messaging may differ depending on a person’s age. Segmenting by age is especially useful for helping you determine which marketing channels work best for reaching current or prospective donors. Break segments down by generations to get started.
Categorizing donors by age is a great technique to try if you heavily rely on social media for marketing. For example, more than 90% of Instagram users are under 35, meaning they belong to Generations Y — also known as millennials — and Z. The results of your age segmentation could confirm which marketing strategies are likely the most applicable. You might use the following segmentations:
As you consider how to reach out to people in certain age groups, don’t fall into stereotypes that may not accurately reflect a generation’s attitude toward giving. For example, society often pegs Millennials as entitled and lazy. However, research about their generosity shows that Millennials are more likely to give their time and money than other generations.
Speaking of giving time, the messages you send to people in your organization’s contact list may not solely be requests for money. You could ask that recipients consider volunteering their time, too. Technology makes it even easier for people to do so from home, especially if they have access to organization-specific tools and interfaces.
Segmenting by age means you’ll need information about a person’s year or date of birth. Some people don’t immediately feel comfortable providing such details. However, one way you could make it worth their while is to send a birthday card to wish them well. Then, suggest that people ask their friends and loved ones to donate to a charity instead of buying presents for those celebrating birthdays.
Most nonprofit contact lists feature people with varying associations with the organization. Some of them might only show up at your annual fundraising gala and give generously, but not at all during the rest of the year. You’ll probably have another segment of people who can’t financially contribute but are frequent volunteers.
Others might be formal members of your organization, which means they have specific rights to participate in internal affairs. Remember that most members will be donors, but not all donors will be members. That means it’s not always appropriate to create messaging for your donors that assume they want to or will be members. Perhaps they don’t have the desire or time to get involved at that level, but still, want to give.
Moreover, there are broader types of donors:
When you use this kind of segmentation, define the groups as accurately as possible, then adjust your messaging accordingly. Take timing into account when applicable. For example, it probably isn’t a wise use of resources to ask your annual fundraising gala donors for money during the rest of the year. However, you should ramp up your appeals a couple of months before the event.
Knowing the right tone to take with donors can be tricky. The aim is to strike a delicate balance that allows building rapport without seeming invasive. That’s why relationship length is another vital kind of segmentation for marketing within your nonprofit. Keep in mind that your relationship with any donor is a journey, and the content you provide them will change over time.
Concerning relationship length, the segments you create might be:
After defining your segments, spend time thinking about the best ways to make your donors receptive to your messaging. One option is to mark the anniversary of when they got involved with your organization. In any case, don’t go overboard by coming on too strong too quickly.
Be particularly careful with the language and tone you use when creating messaging for each segment. It must be appropriate for the length of time the donor has been associated with you and should come across as authentic.
If a donor only registered with your organization six months ago, they’ll likely feel swamped and disillusioned by messages that come every week and mention how much their support means. You can thank them for getting connected and showing enthusiasm, but the person will likely feel wary if you act like a close friend at the start of the relationship. They may even conclude that it was a mistake to provide their information to you.
Once a person is involved with your organization for several years, the best practice is to call out that commitment and make it clear that you value it. After all, many people have dozens of nonprofits they could support in their city or state alone. Prioritizing some of them through a long-term relationship speaks volumes, and it could indicate they’ll be faithful givers.
One of the great things about technology advancements for the nonprofit sector is that they collectively give you more opportunities to reach out to donors. Decades ago, it was common for charities to host star-studded telethons where the people on screen urged viewers to give. TV cameras panned over to show rows of volunteers diligently working to address the incoming calls.
Now, charities more often utilize methods like text messages and even chatbots to talk to their audiences.
One of the easiest ways to nurture a relationship with your donors is to ask them how they prefer to hear from you. Then, follow those requests to make communication type segments such as:
When designing a mailing list sign-up form, consider this structure based on the bulleted list above:
Providing your donors with that element of communication is crucial because it helps build trust. However, you should always have safeguards built into your system so you don’t get in touch with a donor in a way they didn’t permit. Using segmentation for email marketing is valid, but you should avoid connecting with people through email unless they said it’s OK.
When you move forward with this segmentation strategy, take into account that some people may change their preferences over time. Maybe they initially gave the go-ahead for email correspondence but decided several months later that they don’t want to anymore. Perhaps they’re trying to clear out their inboxes and reach an inbox-zero goal.
Always let donors know what they should do to change their communication preferences. It’s ideal if your database takes account of such alterations and automatically updates itself so people are removed from preferred communication type segments as appropriate. Otherwise, rely on as many staff members as necessary to keep the segments updated. Alternatively, be proactive and ask donors for annual communication preferences to maintain current segments.
Most of the segmentation suggestions covered so far assume organizations will use them to ask for money. However, nonprofits can also create segments associated with their volunteers’ activities.
There are several possible segments, including:
Organizations can also use a modified version of the RFM model but substitute the money contributed element with time offered. That strategy could help nonprofits narrow down which volunteers they target by figuring out which ones are most likely to pitch in. This is a particularly useful thing to do when recruiting for short-term or urgent needs.
If an organization requires help with an event happening next week, they likely won’t have much success by targeting people who can only volunteer seasonally or sporadically.
When organizations are new to segmentation for marketing to donors, they may initially believe it’s too time-consuming. That’s because the principle behind this technique is that smaller groups of people are reached.
When nonprofits experiment with segmentation ideas and give them enough time to show results, it should be evident that splitting donor lists help form meaningful relationships. Then, donors will feel more willing to demonstrate long-term support toward your organization — both by giving time and money.
Raviraj heads the sales and marketing team at Donorbox. His growth-hacking abilities have helped Donorbox boost fundraising efforts for thousands of nonprofit organizations.
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