Segmenting your donors simply means placing your donors in logical, manageable groups and tagging them in your database as a member of that group in order to appropriately communicate with them and measure responses.
This is undoubtedly a lot of work. It falls into the “non-urgent but highly important” quadrant of time management. How do you justify carving out the time to make this happen when so many ‘urgent’ things demand your attention?
Here’s why segmentation is worth the effort:
1. The process of segmenting and grouping your donors helps you understand who your donors are, why they give to you, and how best to communicate with them.
You may notice that you have some churches or social service organizations in your database. You realize other churches or social groups would also give if asked properly. Or you may notice that you have many in-memorium donors that would likely respond better to a different message than other donors.
2. Segmenting allows you to communicate with your donors in more personalized, meaningful ways.
For example, donors who are tagged as current volunteers, may respond well to a special thank you note for their service to your organization or special appeal targeted to them.
Or, if you are a cat shelter, you may consider holding a telephone campaign for families who have adopted a cat in the last 3 years. You may send a unique appeal to people who have made past gifts in memory of a special pet.
3. Through segmentation, you can identify and manage donors for a gift upgrade or monthly donor campaign.
It’s critical to understand who your most loyal donors are and keep them connected and giving to your organization. If a large group of donors has given a gift of the same amount (say $50 or $100) for the last three years, it is time to ask them for a larger gift of a specific amount. You’ll need to know who they are, how much to ask, and be prepared to measure the response as a group. What percentage responded with a gift of the amount asked?
4. Segmenting allows you to track donors as a group so that you can measure retention rates or value of a particular group over time.
This can provide valuable insight into where your resources are best spent.
For example, if you manage your donors as a group, you might notice that your segment of 2015 event participants have higher retention rates than your 2014 or 2016 event participants. You can bet it is because of that awesome personalized thank you note you sent in 2015, which you didn’t get around to in 2016. Now you know it is worth your extra time and effort to get that letter out this year.
Or perhaps, you’ll notice after a few years of tracking gifts from families who received services from your organization, that these families are by far your most loyal donors. You’ll be sure to include some extra cultivation efforts for these donors in your fundraising plan.
5. You can nurture future major donors by segmenting high capacity, loyal donors.
When you begin to segment donors within your database, you’ll be able to identify and manage donors with the capacity and inclination to make a major gift, but who may not yet be ready to do so. By tagging them as future major gift prospects when they are identified, you’ll understand who needs special attention over the coming years and plan accordingly to provide it.
6. You can work with small groups of your donor base to test out new activities and track effectiveness.
Pull a small sub-segment of lapsed donors, for example, and try your first phone-a-thon or email appeal targeted to this group. If it is successful, try it with a larger or full segment in the future.
Developing the infrastructure to be able to create and manage segments of your database is a lot of work. But it is the foundation for good donor communications, donor retention and more support for your nonprofit.