Overview
Segmentation is perhaps the most powerful and underused tool available to nonprofits today. Segmentation enables you to identify high-opportunity donor groups within your database and, even more importantly, personalize your outreach based on a donor’s interests, motivations, and past behavior. An effective message to a segmented list can raise 10 to 20 times as much as the same appeal to a non-segmented list. As nonprofits compete for dollars, and as the noise created through endless social media gets louder, nonprofits must do a better job engaging and personalizing their approaches to donors. The days of “Dear Friend” letters have long been gone, and donors expect nonprofits to know them and to understand them. Segmentation is a fundamental strategy used by successful nonprofits to reach and acquire new supporters, strengthen relationships with donors, and raise more money.
Why should nonprofits of all sizes use segmentation?
There are a number of reasons to invest in segmentation. What is the number one reason nonprofits of all sizes should segment? Because it works! I have seen time and again the positive impact that segmentation has on donor giving. Remember that giving is about the donor, not the organization – it always has been. Donors today give to fewer nonprofits, and make more informed decisions about which organizations they support. Today, it’s not enough for an organization to prove it is financially accountable, transparent, and can prove its impact – more than ever, donors are looking for a close connection. To stay donor-centric, nonprofits must make sure they are matching donor interests with the organization’s needs.
Here is a basic – but very relevant example of how segmentation can impact giving. Recently, I received an appeal from a local animal welfare organization, and it was all about cats. Guess what – I am a dog person through and through. And, they already knew this based on the fact that I had adopted a dog. And, based on the fact that I had given to the canine fund previously. Had they segmented their database to look at past giving and affinity, those efforts may have resulted in my making a gift versus the letter going right into the trash.
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