Marketing Soapbox: Nonprofits Need to Segment
Nonprofits need segmentation strategies. One of the biggest problems I see as a donor is when I receive mailings and other costly marketing materials (such as gala invites) when I have only donated a small amount to a particular charity. Nonprofit organizations need to understand their markets (i.e., target donor personae) and design communications strategies accordingly.
For example, we might classify any nonprofits’ donors into three types: Philanthropists, Cause Supporters, and General Public, as illustrated by the sample chart at right*. Philanthropists will donate because they have vast resources but may not give consistently because they have varying commitment levels. Cause Supporters may or may not have volumes of cash to donate but they will consistently donate to a cause they care about. In other words, they have high commitment levels and are often involved beyond monetary contributions (or instead of them, in some cases). The General Public can consist of new donors with any amount of cash (but sometimes only a small amount) and their reasons for donating a very different than the other two groups. To spend a lot of marketing attention on this group may or may not make sense depending on a nonprofits’ budget and operational concerns. Obviously, the best place to focus is the first two groups, but if there is not an abundance of of donations or fundraising success, then looking at that third group and how to segment it appropriately will be a key strategy in raising funds. Understanding the WHYS of donating for this group is imperative to construct a marketing initiative that makes sense. (It should be noted that a complete segmentation of each of these 3 groups specific to a particular organization would yield the best marketing results.) Also, looking at the data for the General Public–as evidenced by any tracking methods or accounting software–will be important. Ask questions of the data such as:
- What are the ranges of amounts donated and the percentages of donations in each?
- How many new donors from this sector did we have year-over-year?
- What do we attribute any changes (increases or decreases) to? Or if it stayed the same, where did they come from consistently?
Using this data plus any specialized market research (e.g., surveys, focus groups, etc.) if it can be implemented, will provide some specific answers about how to touch these customers and what media to use, as well as the related cost. Everyone knows it would not make sense to consistently mail donation letters to a $10 one-time donor but would they use the data and technology tools to create systems and processes to segment their donors and intelligently raise funds?
*Note: This graph is oversimplified for illustrative purposes only; actual client deliverables are more robust and include further breakdown with figures.