Rethink Segmentation to Maximize Results

In this post, we’re talking all about segmentation! Why? Because as the country moves through recession to the next normal, your resources are limited. Doing more with what you’ve got is not only about efficiency, but is now a survival tactic. Here, I’m going to walk you through how to be strategic and identify those that are most likely to respond to your nonprofit’s needs and case for support.

Segmentation is all about connection. Rather than blanket messages to your entire donor file, simple tips and strategies will help ensure that you are delivering the right message to the right person at the right time, strengthening both connection and loyalty in the same message.

Why understand donor motivations and behaviors?

When we talk about connection, we’re seeking to understand what drives someone to engage with your cause. As the Vice President of Analytics & Insights Strategy, I often work with our nonprofit clients at Pursuant to identify opportunities within their donor file. I often find retention challenges.

Many organizations who have excelled over time through acquisition often have trouble building a long-term base of supporters. The answer here is to strengthen the loyalty of the donors you have worked so hard to acquire through motivational segmentation.

First, you have to understand who is in your active donor file, why they are there, and what brought them to your organization. Then, you can begin investing in tailored programs that talk to those groups.

How do you do it?

Learn a donor’s connection to your organization by starting the classic route of asking “why?” at every interaction point, including phone calls and online surveys.  Ask a simple question any time a donor transactions, such as, “what is your relationship to this disease?”

Something organizations may also want to think about is taking a look at transactions as a way of examining behavior and motivation. Pull your data together and look at how people come to your organization in the first place. Look at how someone was initially intercepted on your file, and what newsletters or programs they opted into. 

For example, if you are an arts organization and someone opted into hearing news about musicals versus opting into hearing news about child-focused programming, that is a valuable insight on how to connect and engage with a constituent and what they care about. 

Another example could be how someone supported your organization. Did they give in the wake of a disaster or did they opt into a specific giving program? You can even segment based on whether someone gave $5 or $1,000. All of these things are insights on how the donor is likely to engage with your organization in the future.

How does data play a role?

Think about it, every nonprofit is now a data company.  Data, insights, and digital platforms are giving every nonprofit an opportunity to weed through the chaos and confusion of a changing philanthropic landscape to observe the truth about their donors and associated opportunity. Collect, analyze, monetize. Those that are thriving today are doing more with less, maximizing efforts with data driven insights.

What we’re doing now with clients is taking an expansive view and looking at everything an organization knows about its constituents (including transaction behavior). We use blended and enriched data with third-party consumer insights, such as purchasing behavior, media habits, and demographics. Then, we’re creating detailed donor profiles that can be described in terms of age, gender, income level, and location instead for look-alike modeling and ongoing segmentation.

This method allows organizations to use donor data to tell a story about the individual, then begin segmenting the data from this point into more accurate motivation categories. That information then gets to be used to create more effective programs that motivate people to give and drive loyalty.

Ultimately, we can then use that information in groupings to create offers or programs and associated cases for giving to motivate them to give. So that application and the activation most importantly clusters are known is really what starts the ball rolling for organizations that we’re working with who are driving that donor loyalty. A recent example involves isolating a large segment of a client’s donor file that was very likely to give but younger and lower-income than traditional donors. We designed an online-only monthly giving program with a low dollar entry designed to appeal to this meaningful audience.

How to begin motivational segmentation

Start with a basic file assessment to first access the quality of your data (and potentially do some organizing/cleaning). Second and more importantly, how do you establish that retention baseline? Take a look at industry benchmarks and see where you stand now to understand what it would take to increase donor loyalty in your file overall.