If you’ve been in the fundraising field for any time, you’ve undoubtedly heard about segmenting. Donor segmentation was *THE* hot topic several years ago, and it still pops up . . . like today!
One school of thought regarding successful fundraising efforts relies on understanding your donors and tailoring your approach to address their unique preferences. Segmenting, or dividing your donor base into distinct groups based on certain characteristics, is the bus that drives you to that particular school. that gets you there.
So does donor segmentation matter?
The answer is yes, it does. By segmenting your donors, you can gain valuable insights into their motivations, preferences, and giving capacity. Segmenting also allows you to personalize your communications, which can cultivate stronger relationships. Rather than employing a one-size-fits-all approach, segmentation empowers you to deliver tailored messages, significantly increasing the likelihood of donor engagement and support.
Segmentation starts with identifying the criteria that will form the basis of your donor groups. Common segmentation factors include demographics (age, location, gender), giving history (frequency, amount, campaign-specific), donor type (major, monthly, lapsed), and engagement level (volunteering, event attendance).
Once you’ve identified the segmentation criteria, it's time to implement your segmentation strategy. Start by analyzing your existing donor data and grouping donors based on the selected criteria. Aim for meaningful and manageable segments.
After identifying your segments, you can tailor your communication to each group. Remember that tailoring communication also applies to the frequency and type of communication. For example, if you send an email to monthly donors, you may wish to do so monthly via email (since most monthly donors usually give online). Or, if you are communicating with major donors, you may want only to send an impact report or newsletter a few times a year via mail.
Segmentation also enables you to prioritize resources effectively, meaning you can allocate your time, energy, and budget to provide personalized stewardship experiences that strengthen relationships with donors. To ensure your segmentation strategies are effective, regularly evaluate your key metrics, such as retention rates, to assess whether your strategy is delivering the desired outcomes and, if needed, adjust your strategy.
Lastly, segmentation is an important tool that allows nonprofits to better engage with their donors, but – possibly unpopular opinion – it won’t necessarily make or break your fundraising program. I have worked with organizations that WAY over-segmented, and while no segmentation may be a poor choice, 15 segments for one mailing is also a questionable choice (again, IMO).
While segmenting is important, it’s also important to communicate with all donors in a timely manner and authentic, meaningful ways within the scope of your resources. So if you have to keep it simple with segmenting, that’s ok!
Don't know where to start when it comes to donor segmentation?
I'm here to help! I developed a FREE quick, and easy workbook to help you and your team start the conversation around segmentation, explore the options, and begin the process so you can optimize your fundraising efforts. You can download it HERE.