As a nonprofit professional, you know how important it is to cultivate deep and meaningful relationships with your supporters. It’s even more important to work toward these relationships during difficult times.
To effectively build these relationships, times of social and economic chaos present the perfect opportunity for increasing your communications with donors.
Increasing communication, especially personal communication, will show your donors that you genuinely care about their connections to your cause. Ask them how they’re doing. Provide them with updates on how you’re keeping staff, volunteers, and constituents safe. And, above all, don’t stop fundraising. Even with the current economic climate, donors are astoundingly generous and many will choose to give if you give them the chance.
But how can you make the most of your communication strategy? It’s simple: create smart donor segments to reach out to your supporters.
What is segmentation and why does it matter?
Chances are you probably already leverage donor segmentation. After an event (or virtual event), you probably email your attendees to say thank you. Or, you may have a welcome email series for your newest supporters. But just to make sure we’re all on the same page, let’s start from the beginning by defining segmentation.
Donor segmentation is when you separate supporters into meaningful groups based on commonalities. This enables you to reach out to groups of people with personalized messages that are targeted toward their interests.
It’s an efficient method of personalizing your outreach to your nonprofit’s supporters. With the help of your nonprofit’s CRM software, you’ll use the data you’ve stored to create valuable segments that will help with these communications strategies. Overall, this helps you develop stronger connections with supporters in order to cultivate lasting relationships.
In this article, we’ll go over some of the best donor segmentation strategies your nonprofit can use to build these relationships. The segments we’ll discuss include:
- Giving Level
- Recency and Frequency
- Communication Platforms
- Contribution Type
Ready to dive deeper into these valuable donor segments? Let’s get started.
1. Segment donors by giving level.
Chances are, the topics you discuss with your major donors are quite different from those you talk about with your low-level donors. Therefore, sorting donors by giving level is where we recommend beginning with your segmentation strategy. Keep in mind that when you create these segments, your communications with these audiences will drastically differ from one another.
To fully understand how your messaging should vary, let’s explore the segments used for three main giving levels:
- Small-scale donors. This will be your largest segment. As you reach out to this audience, your goal will likely be to convince them to contribute again in the future and consider giving more. They’ll be invited to organization-wide events and may even be asked to volunteer. This is also the starting point for many mid-tier and major donors, so conduct prospect research to determine who might be a good candidate for higher giving levels in the future.
- Mid-tier donors. Many nonprofits have a bad habit of neglecting their mid-tier donors. However, these supporters have the potential to contribute a good chunk of your donation revenue, 40%-50% according to NonProfit PRO. Plus, they’re the ones who are most likely to turn into major donors in the future. Be sure to segment this group so that you effectively steward them and express the appreciation they deserve.
- Major donors. Your major donors make up the majority of your donation revenue. It’s also your smallest group of supporters. This means that you have the opportunity to hyper-personalize outreach to this audience. Be sure to segment this audience and reach out to ask for feedback about the organization and invite them to special appreciation events.
Each of these groups may be defined differently by every nonprofit, depending on their size and capacity. But, as you can see, collecting data about your donors and segmenting them by your defined giving level will help your nonprofit make strategic decisions that will positively impact your organization’s fundraising goals. It’s all about communicating efficiently to meet each donor’s best interests, saving your marketing team’s time, and effectively reaching out according to your organization’s strategic plan.
2. Segment by recency and frequency of giving.
Another segment of supporters that your nonprofit may consider creating is related to their recency and frequency of their donations. This measurement is important for determining the engagement of your donors.
If your donors are fully engaged in your organization’s work, they’re much more likely to give more often and more frequently. This is an indicator of a strong relationship between the donor and your nonprofit. More frequent giving leads to a higher lifetime donor value for your nonprofit as well as greater fundraising revenue. Further, recent giving shows that the supporter is at peak engagement with your nonprofit.
Some of the segments you may consider within the category of “recency and frequency” include:
- Recurring donors. Donors who sign up for your recurring donation program are highly valuable for your nonprofit because they offer a consistent source of revenue over time. Segment these supporters so that you can reach out with other engagement opportunities such as event registrations and volunteer opportunities.
- Lapsed donors. Donors who have lapsed or are in danger of lapsing are those who seem to be losing their engagement with your organization. Be sure to reconnect with these supporters, explaining that you value their support and invite them to engage or contribute again.
- New donors. Within the first month that a new donor gives to your organization for the first time, you should be sure to reach out personally to thank them and invite them to become involved further with your nonprofit’s activities. Do this while the first gift is still fresh in their minds to catch their attention early and establish a strong foundation for a lasting relationship.
These segments are especially important for your nonprofit’s engagement and stewardship strategies. In short, this provides an overview of where your supporters are in the relationship-building process with your nonprofit.
3. Segment supporters by communication platform.
For your nonprofit to fully engage your supporters, you need to reach out to them using the platforms they’re most likely to respond to. This is why one effective segmentation strategy is to group supporters by preferred communication platform.
Keep in mind that this doesn’t mean that you should exclusively reach out using supporters’ preferred platforms. However, it does show what the primary outreach channel should be for supporters. This approach will fit well into your multi-channel fundraising strategy.
There are two primary ways you can decide what communication platform your supporters prefer. First, you can dig in your CRM to decide what they’ve responded positively to in the past. Second, you can simply ask them in a survey.
When you consider the platforms by which you’re segmenting supporters, be sure to consider the following:
- Email. Email is one of the most useful tools for nonprofit communication and fundraising. According to DNL OmniMedia’s email marketing guide, email was responsible for 28% of online fundraising in 2017. While this is a great communication tool, some of your supporters may prefer you use more personalized methods of communication.
- Phone call. Phone calls are an incredibly personal way of communicating with your supporters. It allows for real one-on-one conversation that may encompass fundraising, organization feedback, and more. Be sure that when you call supporters, you have a very specific call to action and purpose for the conversation. For example, you may ask your supporters to participate in your upcoming advocacy campaign.
- Text message. Text messages have an average open rate of 98%. This makes it a very effective platform for supporters who prefer its use. However, not everyone wants their phone to blow up with text messages from companies and organizations. Because of this, you’ll want to be sure that you know what supporters prefer this platform before using it heavily in your outreach strategy.
- Social media. Many of your supporters, especially younger supporters, likely find the majority of your organization’s news via social media platforms. Those who respond positively to this communication platform will likely be the ones who you want to recognize on these platforms for various reasons (peer-to-peer campaigns, notable donations, and more). They’ll be especially flattered by the reference.
- Direct mail. Direct mail isn’t dead! Many of your supporters may prefer using this platform for organization updates and for fundraising. However, direct mail may get expensive due to printing costs and stamps. By segmenting the supporters who prefer this platform, you can save money by limiting the direct mail you send.
As we mentioned before, be sure not to only communicate with supporters via their favorite communication platform. Keep it in mind as a part of your nonprofit’s multi-channel fundraising strategy. CharityEngine’s multi-channel fundraising guide explains that this strategy is used to “reach various segments of supporters, ideally, at multiple touch points.”
4. Segment supporters by contribution type.
Especially in the age of COVID-19, donors may be looking for alternative ways to get involved with your organization. The economic downturn has made it difficult for many supporters to give philanthropically. However, they may still want to support your organization in other ways.
Keeping track of the other ways your supporters prefer to contribute to your organization can help you reach out to the best audiences to keep them engaged during this difficult time. It can guide the interactions you have with supporters and, especially, the call to action you include in your marketing materials.
Consider creating the following segments based on the type of contributions supporters engage with:
- Event attendees. Attendees from your past events are more likely to be the ones to participate in future ones. During these tough times, supporters may miss attending your events. Therefore, it’s a great opportunity to invite past attendees to a virtual event! This guide provides awesome virtual event ideas if you’re stuck in the planning stage. Segment your event attendees so that you know who to reach out to with special invitations to your virtual events this year.
- Advocates. Advocates contribute to your mission by reaching out to their representatives to make them aware of your nonprofit’s mission and ask them to support your cause in legislation. Create a segment of advocates in your donor database so that you can reach out to them during your next advocacy event or to thank them for their past support as new legislation is passed.
- Volunteers. Volunteers contribute time rather than money. While many of your volunteering opportunities may be limited due to social distancing guidelines, you have an opportunity to get creative and come up with digital volunteer opportunities such as office transcriptions or social media marketing. Reach out to this segment of supporters to ask them to engage with this new program.
While many supporters may be limited in their financial capability of contributing to your nonprofit, remember that money isn’t the only way that they can show their support! By segmenting donors by their other preferred contribution types, you can provide a range of opportunities for them to get involved so that you can continue nurturing relationships.
Plus, by creating these segments, your nonprofit has the opportunity to show supporters that any and all contributions are important and valued by your nonprofit. Thank them for contributing their time and energy just as you would thank them for donations.
Donor segmentation is a key aspect of building relationships with your nonprofit’s supporters. By incorporating smart segmentation strategies, your organization can better engage supporters and develop these relationships further.
Guest post courtesy of Leigh Kessler, CharityEngine
Leigh Kessler is VP of Marketing and Communications at donor management software platform CharityEngine and a frequent speaker on branding, fundraising, data and technology. He is a former nationally touring headline comedian and has appeared on numerous TV shows including VH1’s “Best Week Ever”, CNN’s “Showbiz Tonight”, Discovery Channel & Sirius Radio. He has overseen and informed research and branding strategies for some of the most well known brands in America.
Perhaps they’ve made a major gift in the past, or maybe they’re a member of your recurring gifts program. Whatever the case, many nonprofits find it helpful to classify donors by the type of gift they typically or historically have provided.
How do you all segment?