As a nonprofit professional, you’re always searching for the best ways to improve your fundraising efforts and maximize the use of data captured from your campaigns. Enter donor segmentation. This method of leveraging your donor data can help your team target the right audience for your communications and build your existing supporter relationships.
Donor segmentation for nonprofits essentially involves dividing your supporter base into smaller subcategories based on several characteristics. This is an effective practice because your donor population is better catered to when more minor similarities are recognized.
You’ll then be able to build your outreach and marketing strategies around those groupings rather than to your entire donor base as a whole. Put into action, effective segmentation can help you increase social media engagements, event registrations, click-through rates, and online donations.
This can be attributed to the fact that donors feel seen and inspired when your organization is directing communication especially to them, making them more likely to act on the appeals you send their way. Let’s dive into how and why your organization can benefit significantly from segmentation and personalization:
- How to create donor segments
- Why donor segmentation works for your fundraising strategy
- How segmentation and personalization builds relationships
Let’s get started with the most important part of segmentation and personalization; how to go about doing it.
How to create donor segments
Your team is looking to segment your donors due to your need to make the most of the wealth of donor data you have stored in your CRM. This data could have been collected from anything from your donation pages to your social media metrics. According to Snowball, good database hygiene is essential to create the best segmentation strategy possible. After all, your data has to be tidy and organized to be truly useful (and not eat up more time than it’s worth).
Overall, the segmentation process is straightforward for all types of nonprofits, but keep in mind you’ll need to consider the characteristics of your donor base and the unique objectives you’re looking to accomplish. Understanding how the identifiable characteristics of your donors relate to their engagement with your nonprofit is why segmentation works for nonprofits.
Let’s get into a few of the most common categories of donor segments you can create from the information stored in your chosen donor software:
Basic demographics can help your nonprofit determine the types of donors your organization attracts. For example, are your supporters localized or worldwide? How will this insight translate into how your organization makes its fundraising appeals between these groups? Other categories include:
- Parental status
- Marital status
- Retirement status
On the other hand, segmenting your donors by giving preferences is crucial in making personalized fundraising appeals. This way, you’ll know how to make the donation process easy and accessible for your specific groups. A few popular methods include:
- Credit or debit card
- Via direct mail
- With text-to-give
Importantly, your team can segment donors by their communication preferences. After all, you should know the best way to reach these donors so that you’re meeting them where they’re most likely to interact with your material. For example, these groups can look like this:
- Social media platforms
- Direct mail outreach
Finally, it’s crucial to know how your supporters are engaging with your organization. Be sure to look at your donor data to know exactly what kind of appeals you should be making. For example, you won’t want to ask someone that only volunteers their time and makes small donations for a much larger gift. Here are a few categories that your team should consider:
- Event attendance as a participant or volunteer
- Gift history including amounts and campaigns
- If they’ve shared your content on social media.
With these categories in mind, you’re able to sort donors by these characteristics and look for more similarities to break it down even further. Use several metrics in tandem to learn more about who is engaging with your organization in which ways. For example, if you’re promoting an upcoming event – Who are your average event attendees? How old are they? What is the size of their average gift to your organization? What are their communication preferences?
Given these categories, your team can identify the best ways for how, when, why, and what to include in your fundraising appeals to each supporter group. When you can determine what inspires each person to donate to your organization, you can create the most meaningful and personalized appeals.
Why donor segmentation works for your fundraising strategy
As we’ve unpacked above, Donor segmentation can help your team understand a lot of pertinent information about how your organization and supporters interact with each other. Segmentation will strengthen your asks and streamline your communications so no appeal goes unnoticed. For example, grouping your donors can:
- Prevent unopened direct mail appeals by those who only engage with your nonprofit online.
- Target only those who would rather give their time than money when looking for volunteers, so your invites don’t go to waste.
- Save time in reaching out to only those who have historically answered phone calls, or responded to emails, rather than those who don’t.
Let’s get into specifics regarding the benefits of donor segmentation and personalization in making your appeal:
Using the right platform for marketing
Now that you’ve used engagement habits and communication preferences to segment your donor audience, your organization can develop an accurate strategy for how you’re going to market to each subgroup effectively. Your fundraising appeals will get the most engagements when you meet donors where they are.
For example, you’ll save money on direct mail materials if you’re only sending them to those who have historically interacted with them. Plus, you’ll know which social media platforms are best for attracting engagement with your content. It’s a win-win, as long as your communications and promotions strategies include a multichannel approach to cater to each segment in different ways.
Asking the right audience for support
As mentioned before, the benefits of segmenting your donors include knowing which appeals to make to which target audience based on the metrics your team tracks. Here are some examples for doing this effectively:
- Delivering customized invites only to those who have historically attended your auctions and galas.
- Creating direct mail appeals and prepaid return envelopes only for your supporters who typically give through mail.
- Personalizing your fundraising appeals for specific goals that have previously motivated certain supporters to give their time or money.
Once your team has established multiple segments and groups, you’re able to save money and time by only employing the tactics that will be most effective for your donor base.
Long-term strategic value
Not only is segmentation effective for your specific fundraising appeal, but you’re able to use this strategy as your donor base evolves for the best results. With concrete segmentation strategies in place, you can track marketing and appeal performance tied to specific segments. Over time, you can adjust your strategy based on that performance.
Plus, proactive data management and segmentation helps you stay on top of changing trends. Your supporters will age, technology will change, and culture will shift to focus on giving to different initiatives over time. Undoubtedly, your segmentation and communications will have to adapt to such changes to continue your success and intention.
To keep your donor data updated and useful, you’ll want to practice data hygiene. This means you can ask donors for updated data but the biggest thing is keeping the data clean yourself. This can be done with regular data reviews, standardized entry protocols, removing duplicate or outdated data over time, and practices of that nature. This practice can provide your team with new and recent data to provide insights for improving your current segmentation strategies.
With a complete picture of your donor engagement data over the years, you can begin to pull out even more valuable insights and trends. For example, the right data strategies and tools can help you identify:
- Donors in danger of lapsing over time, based on engagement history.
- Which donors have the potential to turn into major supporters based on giving patterns and preferences.
- Which social media platforms are still prevalent throughout time.
When you understand these items and how they evolve over time, you can understand and grow easily with your supporter base.
How segmentation and personalization builds relationships
Finally, donor segmentation works to strengthen the current relationships you have with your supporters. The biggest perk of this strategy isn’t just raising money in a more effective way, but also improving donor engagement and retention over time.
Sometimes donors are turned off by feeling like an ATM to organizations, so when you personalize your appeals, they feel like an active member of your mission. Here are a few things you can do to encourage donor engagement and retention.
According to Snowball, optimizing your donation letters is crucial for using your donor segmentation information to your advantage. In your appeals, avoid making a vague call to action simply asking recipients to give whatever amount they want to your organization. It’s best practice to include explicit donation amounts to encourage the best results.
To do this, you’ll want to look at your donor data and segments broken down by average giving amounts. Look at which groups are most likely to give which amounts. Take this data, and include suggested amounts to make donating feel impactful for your specific recipients. Done well, this strategy can encourage them to give even more than they might have in the first place. Just be sure to offer a custom amount option so your donor can opt to go lower, higher, or between tiers, because any gift is a helpful one.
Establishing a personal connection by name
Because you have access to various bits of donor data, you have their names. In your fundraising appeal, you should be addressing your recipients by name. This will establish recognition for their efforts and potentially a long-term relationship going forward.
To do this effectively, you’ll want to use their names when addressing a piece of mail, or writing the introduction to any sort of appeal. Just be sure to avoid the generic “dear valued supporter” or a similar introduction.
When you invest in able marketing software, you’re able to automatically populate recipients’ names into messages when integrated with your CRM – another important reason why it’s important to keep your database clean and organized over time!
Donor segmentation helps your nonprofit in short and long-term ways. Determine how to use this information for improved donor engagement and retention.
Overall, implementing donor segmentation and personalization in your organization’s fundraising appeals is an effective and innovative way for optimizing your communication and promotional strategies. With this, you’re likely to increase engagement, fundraising, and improvements in every area of your organization. Happy fundraising!
About the Author: John Killoran
John Killoran is an inventor, entrepreneur, and the Chairman of Clover Leaf Solutions, a national lab services company. He currently leads Clover Leaf’s investment in Snowball Fundraising, an online fundraising platform for nonprofit organizations.
Snowball was one of John’s first public innovations; it’s a fundraising platform that offers text-to-give, online giving, events, and peer-to-peer fundraising tools for nonprofits. By making giving simple, Snowball increases the donations that these organizations can raise online. The Snowball effect is real! John founded Snowball in 2011. Now, it serves over 7,000 nonprofits and is the #1 nonprofit fundraising platform.
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