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4 Donor Segmentation Strategies That Drive Results

7 min read
October 28, 2021
Allison Smith headshot
Allison Smith
Content Marketing Coordinator, Neon One
donor segmentation

When it comes to fundraising appeals, what you say to your donors matters a lot. But who you say it to might matter even more. Donor segmentation is a smarter way to create personalized asks and other messages for your donors, which helps your nonprofit raise more.

And segmenting donors really works! According to CampaignMonitor, email marketing campaigns that leverage CRM data to segment prospects and personalize messaging see a 760% increase in revenue compared to those that don’t. That’s a huge increase, and it highlights the importance of tailoring your own nonprofit’s messages to your individual groups of supporters.

email marketing campaigns that use donor segmentation have seen a 760% increase in revenue
email marketing campaigns that use donor segmentation have seen a 760% increase in revenue

Let’s cover how you will see better results with donor segmentation—plus a few straightforward strategies to get you started.

What Is Donor Segmentation?

Donor segmentation is a communications strategy that helps you personalize your fundraising appeals and donor engagement by creating several different audiences. By segmenting donors, you can vary audiences based on donation size, time since their last donation, or other data points, and adjust your message to resonate with that audience specifically.

This ensures that your organization can create the type of appeals and communications that will be most effective for each audience, helping you build better relationships and increase fundraising results.

Why Do Personalized Communications Matter?

Due to changes in technology—primarily in the for-profit sector—people are expecting more from their engagements with organizations. It’s estimated that more than 70% of consumers expect personalized communications. Services like Amazon and social media algorithms that show users personalized recommendations, suggest other purchases and services they might like, and provide personal-feeling communications and updates are popular for a reason: Consumers (and donors) prefer individualized communications.

more than 70% of consumers expect segmented communications
more than 70% of consumers expect segmented communications

But what about nonprofits? Don’t donors support them because of their cause, not the way they communicate with them?

It’s true that your donors are passionate about your cause, but the way you communicate with them and tell stories about your mission can make a big difference in their decision to continue giving. According to fundraising expert Adrian Sargeant, 53% of donors surveyed stated that the reason they no longer support a nonprofit is poor communication.

Personalized donor communications through fundraising segmentation will not only help you build better relationships, but they are vital to earning continued donor support and the overall success of your mission. Implementing donor segmentation strategies is the easiest way to start creating personalized experiences for those donors and ensure a successful future for your organization.

4 Easy Donor Segmentation Strategies

Speak Specifically to LYBUNTs & SYBUNTs

These are your audiences comprised of lapsed or at-risk donors. This list will tell you, respectively, who has donated “Last Year But Unfortunately Not This Year” (your LYBUNTs) and “Some Year But Unfortunately Not This Year” (your SYBUNTs).

While this is a pretty basic level of segmentation, these audiences can come in handy during specific campaigns, particularly the year-end appeal season. You want to ensure that you’re referencing this group’s past support, reiterating how their last gift made a difference, and inviting them to give again. You’ll want to speak to a LYBUNT slightly differently than you’d address someone who made a gift last month.
Many nonprofit CRMs have LYBUNTs & SYBUNTs built-in as a saved report. That’s including Neon CRM, which makes that available in the “Saved Reports” section. But if your provider does not provide that information in their default reports, you can build out the report manually.

Segment by Giving Levels & Donation Amounts

Segmenting donors by donation level is a great way to create specialized messages for your top supporters. If your organization has giving levels, this is an important type of data you can use for successful fundraising segmentation. It’s also a great strategy to encourage donors to increase their commitment to the next level.

Create communications audiences for each giving level (or designated range of gift amount). Your criteria will vary if you use giving levels vs. donation amount. You could, for example, create an appeal for a donation amount based on someone’s past gift. You wouldn’t want to ask a $30 donor for a $300 gift, and you wouldn’t ask a $300 donor for $30. Segmenting your list using this criteria will make it easy to ask for the appropriate level of support.

From there, you can adjust your messaging to be even more personalized for your high-level donors—and include specific impact statements and information about higher giving levels that will be relevant for each audience.

Segmenting donors this way not only helps you raise more, but also feels a little more personal than a generic appeal.

Consider Wealth Screening & Giving Capacity

Unfortunately, sometimes past donation size doesn’t indicate a donor’s actual capacity to give. Many potential major gift donors frequently make smaller gifts to their favorite causes before making a large gift, but those historical transactions don’t include any information about the potential of increased support. That means that some of your best candidates for major donors (or larger gifts in general) might already be sitting in your database.

You can use a prospect research tool to get additional insights that might determine a more appropriate ask amount for donors. Wealth screening services take the data in your system and compare it to large data sets of philanthropic gifts, home ownership, and more to estimate each donor’s ability to give.

With this additional data, you can use donor segmentation to create an audience of the dollar amount you predict each of your donors could contribute to your organization. If you discover your $30 donor has a very high net worth, for example, you may want to consider sending them an appeal for a higher donation than they made last time.

But be conscious of how you’re engaging each audience—someone with a high giving capacity who hasn’t donated before or is a relatively new donor may not be ready to make a large commitment. Put yourself in each audience’s shoes and make sure you’re framing your ask correctly.

Consider Prospect & Major Donor Status

If your organization has a major donor program, you’re familiar with the “pipeline” of prospective donors. As you work to cultivate relationships with each donor, they’re all at different stages of the process and have received different engagements.

If you’re launching a donation campaign outside of your core major donor strategy, be sure to think about how you’ll want to engage the people in your pipeline.

You probably don’t want to make an appeal for a minor campaign right before making “the ask” for a larger gift. Instead, you could share the news or results of this campaign as a touchpoint, before making a more formal ask. Giving a potential major donor an update about a recent campaign, including information about how that money will make an impact in your community, can be a great conversation starter as you build a relationship between them and your cause.

Either way, it’s important to think about your prospective and existing major donors as you’re segmenting audiences and before launching any kind of communications. Many of their engagements will be one-on-one conversations with your team, not part of your mass communications.Their overall experience (and potential donations) may be negatively impacted if your general messaging conflicts with the ongoing conversations they’re having with your organization. Creating a segment specifically for this important group of donors can help prevent uncoordinated messaging and appeals.

Segmenting Your Audiences Will Make You More Successful

Ultimately, the best donor segmentation strategies for your nonprofit will depend on you knowing your audience. You may choose to test different segmentation methods and choose data points that may be a better fit for your programming and fundraising strategy. But, however you choose to segment your audiences, doing so will help make your organization’s fundraising activities more effective.

The bottom line is this: donor segmentation is about building better relationships. Make sure that, whatever your strategy, you’re engaging donors in a way that feels authentic to them and facilitates a real connection between your supporters and your organization.

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