If you’re a nonprofit leader, you know the importance of forging a deep bond with your supporters in order to keep them engaged with your mission. The best way to do this is to maintain open lines of communication with them.
But your organization shouldn’t stop there when planning your communication strategy. Instead, make sure you’re segmenting your donor base when planning how to communicate with them. This is a foundational outreach concept that brings immense benefits across all aspects of your operations when done effectively.
However, segmentation can undoubtedly be confusing or frustrating for newcomers and seasoned nonprofit pros alike. If diving into data and sorting through reports isn’t your favorite way to spend your time, you’re not alone. Thankfully, the fundamental tenets of segmentation themselves aren’t complicated – understanding them and adapting them for your goals will help ensure more successful communication with donors.
So why does segmentation matter? Here are some of the best strategies and tips to keep in mind while crafting your segmentation strategy.
1. Why Donor Segmentation Matters for Communication
Segmentation allows you to separate audiences within your donor base in order to communicate with them in more targeted, specific ways that will best motivate them to take action. For instance, if you want to increase donor retention with an outreach campaign, you wouldn’t want to target donor prospects. Instead, targeting previous donors who haven’t given within a specified time period would give your campaign the focus it needs to drive results.
You can segment your donors by any metric that you’ve collected from them over the years. Here are a few examples from NPOInfo’s guide to donor data management:
- Giving history, such as relationship duration and average gift amount
- Marital and parental status
- Events attended
- Prefered method of contact (email, direct mail, texts)
The key takeaway is that segmenting by certain data points allows you to communicate more efficiently. By building outreach lists backed up with solid segmentation strategies, you’ll save time and money, especially on relatively expensive methods like direct mail.
This approach also drives stronger ROIs – with increased efficiency and accuracy comes greater returns on your investment as the donors you target with specific appeals are the ones most likely to take your target action. It’s a critical element in streamlining and strengthening your fundraising plan.
2. How Donor Research Fits In
Donor research is an integral part of the segmentation process and should always play into your fundraising plans for new campaigns and appeals in one form or another.
Before you conduct outreach, look inwards to make use of your existing analytics. Initial research on past campaign performance should inform your segmentation strategy for new campaigns as you learn which audiences to target with particular asks and messages. After all, nobody knows your donor base quite like you do.
Here are some questions to ask yourself while analyzing your data in preparation for a new campaign:
- Who responds to this kind of campaign or appeal?
- How much do they give?
- What time of year do they give?
- Do they give through your website, or in person/by mail?
- What are your donors’ motivations for supporting you?
- What demographic or engagement markers do these donors share?
Getting to the bottom of these questions will allow you to better understand your donors and how to best reach them. If you already have a crystal clear idea of your target audience, digging deeper into the data will help you learn more about their motivations and relationships with your missions, allowing you to segment and target them even more effectively.
In many cases, you’ll need to conduct segmentation research by relying on your existing donor data stored in your management tools, such as your CRM, in order to learn more about the best ways to reach existing donors. In other cases, you’ll need to go further than your own data. For instance, if you’re planning a capital campaign or other large-scale fundraising initiative that will rely on finding and soliciting new prospects, your research should extend to external sources to learn more about potential donors in your orbit.
The unique mix of internal and external data you rely on will depend on your target audience, which is informed by the campaign’s objectives and goals. When you know what you want to accomplish and how well you’ve accomplished similar goals in the past, you’ll know who you should contact. From there, you can determine what you need and want to know about them in order to communicate in the most efficient, targeted, and compelling ways possible.
3. Types of Information to Inform Your Segmentation Strategy
There are numerous types of data that serve different purposes in the segmentation process. If analytics isn’t your forte, don’t worry – here’s a list of the most important and frequently used types of data that nonprofits use to segment their communications.
This is perhaps the most straightforward data your nonprofit collects. It’s essentially basic contact information, such as name, age, address, email, and phone number. For example, you could use the channels you’ve deemed most effective for outreach when deciding whether or not to share invites for local events. Or, you look at the average age of your target audience and compare it to past results to identify best outreach channels, whether that be direct mail, social media, or email.
As you learn more about your donors over time through surveys and forms, one-on-one conversations, or data appends, you can fill out your demographic information with more details about marital and parental status, employment information, and more.
Understanding your donor’s past is integral for shaping your communication strategy going forward. Your CRM should have a detailed profile of your donors and their histories with your organization.
Some of this information might include their average donation amount and how long they’ve had a relationship with your organization. Use this to target donors who give at specific levels and send tailored messages to new donors, and at-risk donors.
Your nonprofit likely collects engagement data outside of monetary giving for certain activities that are equally important for segmentation, like volunteering history, petition signatures, and event attendance. Use this to promote similar or new opportunities that they’d be interested in to boost engagement and to learn more about which types of donors are most engaged with different opportunities.
Prospect data is externally-sourced data on potential donors’ giving capacities and philanthropic habits. According to Donorly, you can find prospect information anywhere from social media to SEC filings. There are numerous tools that have features based on how in-depth you want your findings to be.
To get started, you can consult a prospect research guide to identify qualified prospects for mid-level, major, or planned gifts for a campaign or as part of your normal development pipeline. Additionally if you want a more personalized approach, you can work with a fundraising consultant. This professional will use their tools and expertise to provide many services, such as researching prospects, connecting you with them, and developing your fundraising strategy.
4. Putting it All Together
The overlap between these various types of analytics is what takes your segmentation to the next level. Of course, the level of granularity you choose to go for will depend on your current context and goals, but it’s often a good idea to dig a bit deeper than just filtering your donors by a single metric.
For example, let’s say you’re planning a year-end appeal leading up to Giving Tuesday. In order to lay out a targeted communication plan that will yield returns, you’ll want to learn this kind of information about your donors:
- Active/lapsed status
- Preferred communication channels
- Average giving amounts or lifetime values
- Date of last donation
Consider how your outreach could be tailored to maximize impact depending on how your donors fall into these various lists. Here are some ideas for specialized communications based on donor data:
- Send your lapsed donors special “how have you been?” messages
- Only send the active donors who have engaged with direct mail in the past year a glossy year-end mailer
- Ask active small-value recurring donors to take their impact to the next level
- Exclude donors who have given very recently from receiving direct financial asks
As you can see, there are many ways to bolster your segmentation plan with your existing data. All of your data has potential to help your donor engagement and communication.
You don’t have to be an analytics expert to make use of your data to improve the ROI of your communications. If you take a second look at what’s in your CRM and make a conscious effort to segment your donors, you’ll add value to the donor journey. Ultimately, you know your donor base better than anyone else, so use what you know to target your messaging and get your supporters engaged.