How (And Why) to Segment Your Donor Campaigns
When you open up your email inbox, what catches your eye?
If you’re like most people, your inbox is bombarded and you skim through, completely ignoring some emails, but opening those that seem most relevant to you. It’s what we all do with limited time and too much information coming at us!
The same can be said for your donor campaigns. Whether they’re via email or any other mode of communication, people will take a closer look when they feel that the campaign cause is relevant to them.
If you want to get better results from your campaigns, being highly targeted about who sees them can make a huge difference. Segmentation is one way you can ensure your campaigns are relevant to your target audience. Here’s how (and why), you should segment your campaigns:
What does segmentation mean?
Segmentation means that when you target your donor campaign, you choose a very specific audience who will see it. Rather than sending out a mass message, you split your donors into smaller groups based on certain qualities that make them a relevant audience for your campaign.
When you consider your donors, you can probably already think of a few different groups. There are your annual givers, your fundraiser attendees, your planned givers, and more. Segmentation is important to get better campaign results because it helps you to show the right campaign, to the right donor, at the right time and with the right message.
For example, if you are hosting a local fundraising event and want to invite attendees, your donors who live halfway across the country probably shouldn’t be your first choice. This is a very basic segmentation example where you’d start by looking closer to home. You might then have more criteria by which to segment donors into groups.
How can you segment your donors?
There are many different ways you can segment donors, so let’s look at a few general categories:
#1. By size of the gift
Nonprofits often segment by the size of previous gifts given by donors because that helps them to tailor what they’re asking for. Many campaigns feature requests for specific gift amounts, so you want those requests to go to donors who are likely to give that amount.
#2. By affinity with your cause
This is a big one. Many wealth screening efforts have typically centered around the wealth of the donor. They mainly look at whether the potential donor has the capacity to give a major gift or not.
The problem with this strategy is that capacity to give is only one part of the equation. Many people have the capacity to donate, but they don’t give to all causes. The factor that is missing is an affinity to that cause.
This means that the person has an emotional connection or history with the cause. Maybe they’ve been personally impacted by it, or they have a history of giving to similar causes. For many donors, it’s personal. They want to feel that they’re making a difference to a cause that matters to them.
#3. By how the donor was acquired
How did the donor find you in the first place? Segmenting in this way allows you to send a more personalized message that acknowledges how you know them.
For example, a message that says “Hi Jenny, it was wonderful to see you at our recent gala,” is much more powerful than “To Whom It May Concern …”. You can use your donor management system to record how the donor came to be on your list and tailor messaging appropriately. Adding a personal touch can go a long way and make a major impact on your donor.
#4. By donation history or pattern
Your regular donors are likely to respond differently compared to new donors who have made one gift. As a general rule, nonprofits tend to create separate campaigns to encourage first-time donors to return, as opposed to donors who are already in the habit of giving to their cause.
Donation frequency is another pattern you could segment by. Maybe you notice certain donors contribute every #GivingTuesday but don’t respond to requests throughout the rest of the year. Or the opposite may be true – you might have people who respond to other campaigns but not to Giving Tuesday. It’s about sending the right message at appropriate times.
#5. By demographics
There have been various reports that have found different generations are responsive to different types of fundraising campaigns. For example, Millennials and Gen Z tend to be the bigger contributors to crowdfunding campaigns, while Baby Boomers are more responsive to direct mail.
It makes sense to customize how you communicate according to the demographics you would like to reach. There are multiple ways you can look at demographics, including; age, gender, location, income, and job role. You can then reach them through a channel you know that they are responsive to.
#6. By Multi-Lens Modeling
Donors, like most other humans, have multiple facets to them. It often doesn’t make sense to rely on just one aspect about them to create a segment. This is where Multi-Lens Modeling is a game-changer.
iWave has a Multi-Lens Modeling feature that allows nonprofits to screen donors under multiple settings, depending on their fundraising goals. This means you can target a very specific segment with personalized messaging that will be more meaningful to them because it accounts for more facets of the causes they have more affinity with.
Why is segmentation important?
Segmentation of your donor campaigns can bring you several advantages:
#1. Send personalized campaigns
A huge advantage of segmentation is that you can send more personalized campaigns to donors. This means that you send them more meaningful material that appeals to their interests.
It’s also important to note that donors want you to communicate on a more personal level. There is a wider trend among consumers demanding more personalized communication, with 72% saying they only engage with messages that are personalized.
The bottom line is that people like to be recognized as an individual, rather than a number on someone’s list. We like to be appreciated for our unique qualities.
#2. Improve donor engagement
Improving donor engagement is adjacent to sending more personalized messages. If you treat everybody the same, it’s a bit like throwing multiple darts at a board without taking aim – some might hit home, but the majority will miss.
If you keep sending irrelevant messages to people, they will eventually tune out and probably overlook messages that are suited to them. If you think about your email inbox again, you’ve probably experienced companies that blast out multiple marketing messages without tailoring them to their audience. Over time, you ignore all messages from that company because your experience has been that they’re irrelevant and not personalized to you.
Segmentation helps you to stay relevant in the eyes of your donors and improve engagement. It means you send the right campaign to the right person.
#3. Be more targeted with your campaign spending
Campaign expenditure is always one of the biggest items on nonprofit budgets. There’s a need to tread carefully in terms of getting the most value for your campaign spends. This is where segmentation can help.
When you’re more targeted with your campaigns, you can work better within budgets and see better results for your expenditure. For example, direct mail campaigns tend to be costly and it usually makes little sense to send them to your entire database. However, if you’re selective about a targeted segment, you can get results that more than justify your campaign spend.
#4. Improve donor retention
Donor retention is a key metric for nonprofits and most are keen to improve it! Segmentation can help to improve donor retention as a direct result of improved engagement. When you send personalized messages and meaningful content, it helps to nurture the relationship and build loyalty among donors.
Average new donor retention is only around 20%, however, that improves with repeat donations. This is important for nonprofits because, just like within for-profit sectors, attracting new donors is more costly than keeping your current ones.
Segmenting your campaigns and ensuring only the most relevant get sent to each donor helps to keep them engaged and retained.
Examples of donor segmentation with iWave
Here are just a few examples of how nonprofits have effectively used donor segmentation with iWave:
University of North Florida
The University of North Florida needed to quickly and efficiently identify potential donors before committing more time to formally research them. This is where iWave’s 360Search came in to help.
Using this unique feature, the university could use a variety of factors to create segments of potential donors. “We can see employment information, real estate, donations, philanthropic connections, and director connections in one click of a button.”
This has helped them to successfully target their donor campaigns for several years now.
The Zoo
A renowned Canadian Zoo was challenged with increasing its donations. With a campaign accuracy rate beginning at 0%, the organization was keen to find a solution to improve. It tried Google searching potential donors and improved to 4%, but averaged 10 hours of research on each prospect.
The Zoo turned to iWave for fundraising intelligence to improve its efficiency. “Over a 3-year period, we went from 0% to 4% to 70% accuracy in our gift ask. And our fundraising dollars have gone way up because we’re talking to the right people, we know they’ve got some interest, and we know how much they’ve given to organizations like ours.”
The bottom line is, segmentation will help you to get much better results from your donor campaigns. One of the secrets to effective segmentation is data integrity, which is where iWave comes in. If you’d like to learn more about your prospects and donors than ever before, watch iWave’s demo video, here.
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