This blog is part two of our five part series about how to supercharge donations to your nonprofit. In our our first blog of the series, we covered five best practices to keep in mind for your next fundraising campaign. Today, let’s talk about donor segmentation.
What is donor segmentation? Great question! It’s the process of categorizing your donor population based on your available data for the purposes of customizing your donor outreach for maximum effectiveness… and it’s important! So today, let’s answer some questions about donor segmentation:
- Why is it important for a nonprofit organization?
- What are some different ways to segment donors?
- How can a nonprofit organization get started? (In this section, we’ll let you in on the #1 secret to donor segmentation that 99% of articles out there won’t tell you!)
Ready to be an expert in donor segmentation? Let’s dive in!
Why is donor segmentation important for a nonprofit organization?
Donor segmentation is the special sauce of donor relationship management. It enables your organization to customize communication frequency, style and format to what each specific donor group will be most receptive to. Imagine you wanted to have a big birthday party with family/friends – the way you would invite your coworkers is probably different than how you would invite your grandma. You want both to attend and have a great time, but that email invitation is going to be better received by your friends and perhaps grandma would prefer a call over the phone. Same thing is true with your donors, they all care about your organization but some appreciate email whereas others would prefer a letter in a mail. Understanding the different characteristics that make donors unique enables your organization to communicate to them in the most appropriate way.
What are some different ways to segment donors?
There are a ton of different ways to segment your donor population but the important part is choosing ways that will actually improve your communication with donors and ideally increase engagement and annual giving. Here are a few of our favorite ways to slice and dice your donor data:
- Geography – Splitting up your donors by where they live is a great (and relatively simple) way to start. Many nonprofits keep of a calendar of events related to their mission, by splitting out your donors by location, you can send them targeted communications encouraging them to attend events in their area. Depending on your nonprofit’s size and reach, you can segment donors by any geographical grouping that makes sense (city, state, county, region, etc.)
- Donation amount ’96 Another great way to segment your donors is by the amount they’ve given in the past. By splitting your donors out by average gift size, you can change the suggested donation amount within the specific communications to each group. Many of our customers receive gifts across the giving spectrum so by tailoring your suggested donations, you can communicate with both small, medium, and large gift donors in a way that’s consistent with their giving history.
- Channel preference – Some donors like emails, others like calls, and others may prefer a letter in the mail. By communicating with donors via their preferred channel, you increase the likelihood they will be receptive to your outreach. You can also highlight the donation channel of their choice such as including a link to a “donation page” within emails or a “donation card” within any paper mailings.
- Length of donor relationship – This segmentation technique reminds us of an old rhyme, ’93Make new friends, but keep the old. One is silver, the other is gold”. Donors that consistently give to your organization year after year are some of the most valuable friends a nonprofit can have. It’s important to target these donors specifically and highlight their value to the organization. Whether it’s a hand written thank you note or an invitation to have a live group chat with the nonprofit’s executive director, try to do something special for these donors to reward their loyalty!
How can a nonprofit organization get started?
Now that you’ve gotten to the end of this blog, hopefully you’re excited about donor segmentation and ready to get started. So, what’s the #1 secret to donor segmentation? Quality data. It’s that simple – dividing your donors by geography, donation amount, communication preference and length of the donor relationship isn’t difficult if you have a database of donor information that you trust. Unfortunately, if your data is all over the place then donor segmentation will be very challenging.
Is your data a mess? Kindful can help! Fill out our contact form, we’d love to chat!
Schedule a live demo with our team, and we’ll show you how easy it is to create and automate reports, utilize online and offline fundraising tools, quickly integrate and access all your data, and ultimately create more time to engage your donors.