Fundraising Success: Segment Your Donor Database

Donors are a highly variable group of people, each with different values, expectations, interests, and experiences with your organization.  Which demographics and lifestyles are you targeting through your donor-centered communications?

If you’re just getting started in shifting your nonprofit’s focus to donor-centered operations, one great way to start is through segmenting your donor database. Segmentation refers to finding common groups of people, understanding who they are and then targeting them specifically through communications.  You can begin by looking to identify age, gender, family life cycle, occupation, any personal interests that you’re aware of, and if they’re an existing donor – their giving history, and which programs resonate most with them.

Family life history refers to the stage at which someone is in their life.  For example, “young, single, and living with parents”, which then may lead to some or all of the following: “single independent professional”, “married”, “married with young children”, “married older children who are still dependent”, “empty-nesters who are still working”, “retired”, “solitary survivor”, etc.

Lifestyle refers to activities such as hobbies, work, social life, recreation and sports, shopping, community, political leanings, etc.  Knowing something about your donors’ lifestyle choices helps you further hone your communications to match their interests.  They’ll feel like you’re speaking directly to them!

Haven’t started segmenting and feeling overwhelmed?  Don’t worry, just start with your best donors and select some key features.  Do they fall into particular age groups?  Do they tend to be within a particular stage of their life cycle?  Are they in similar types of professions? Do they have similar motivation for their philanthropic activities?  Do they have hobbies or interests in common?

Once you’ve evaluated your best donors for these and/or other features, consider whether as a group, it’s practical to service them. For instance, if your segmentation results in thirty different groups, you’ll probably find it exhausting and impractical to communicate the same announcement regarding a campaign or event in thirty different ways.

To segment your data in ways that are both practical and valuable, I recommend following my “Six Steps For Segmenting“:

1)   Make sure you can measure the groups.  If you can’t closely track the criteria from which you’ve developed a group, it won’t be effective – but it will be frustrating.

2)  Make sure you have the resources to design fundraising materials and programs that are appropriate and specific for each group.

3)  If you know you’re only likely to raise a small amount of funds from particular segment, it may not be worth the time and effort to approach them differently through your communications.  Make sure that either the segments size or individual gift is large enough to justify the extra time investment.

4)  Donor groups should be appropriate.  For example, you may not want to have “immediate beneficiaries” as a target segment.

5)  Be sure that each group is unique and will not respond to communications in the same way that other segments do.

6)  Be sure that the group is sustainable so that you can manage the communication and behavior of the group.

Once you’ve segmented your best donors, you can then ask, What interests them?  What communication format do they prefer?  What ‘ask’ do I make for this group?  Where does my messages ‘go’ to reach other donors like them?

If you haven’t begun to collect this kind of data for your donors, now is a great time to start!   Segment your data, test the resulting groups with the six steps, and then develop donor-centered communication strategies for each segment.

Segmenting your donor database has the potential to increase your organization’s bottom line significantly.

What are you waiting for? . . . Happy segmenting!

Cheryl M. McCormick, Ph.D., Founder and CEO, Ascend Nonprofit Consulting and Executive Coaching, www.ascendnonprofits.comcheryl@ascendnonprofits.com

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