Segmentation Targets Marketing for Financial Management for Nonprofits

financial management for nonprofitsAt the beginning of every year, your financial management for nonprofits team has to compile new ideas for your organization to raise funds. Your donors need to feel appreciated and you can provide that to them by building a more meaningful connection. Your donor list is most likely a very long list of long-time loyal donors, first-time donors, returning donors, individuals who have been touched by the cause you represent, and many others. The way you communicate to each of these individuals is extremely important. Market segmentation is the smartest and most effective tool that can be used to target each of your donor groups in a way that is relatable to them.

What is Segmentation?

Segmentation is when an email or marketing list is narrowed down by groups of people who have similar characteristics. This results in targeted marketing to specific smaller groups according to their unique interests for your nonprofit.

Why Should Nonprofits Segment?

The first step is to think about who is on your current mailing list. This will be a mixture of long-time donors, new donors, and everyone in between.

Each of these groups needs something different from your nonprofit. Loyal and long-time donors may enjoy hearing about the updates you have on programs, whereas a new-time donor may need to learn more about your organization before wanting to be involved. Other donors may want things simple, because they are only interested about one specific program within your nonprofit.

When you send the same email and information to all these groups, you are bound to have donors get bored with all the information you send because it does not feel relevant to what they were looking for. This may even result in an unsubscribe click. The more you speak to your individual donors through segmentation, the more you will engage with them and their needs. The more engaged individuals are, the more likely they are to donate in the future to your nonprofit.

Starting a Segmentation Program

First, and foremost, you need the right software that can update to include segmentation models. This is usually accomplished by adding a simple field to each address record that will indicate they are segmented to a specific group and will then be in the same cluster of people with similar interests or characteristics.

Start segmenting by looking at all the data you have on your donors, leads, or supporters of your nonprofit. You most likely have addresses for all your existing contacts, so you know their location. One option would be to segment communications around location-based activities or events, such as volunteer days, charity events, or other locally-based activities. This will allow you to only send invites, over email or mail, to those that live near the event. This will most likely result in a better response rate, because you are targeting individuals that are most likely to attend.

Another avenue to take with segmenting, with the information you already have about your donors, is to separate them by the amounts given to your nonprofit, and show them how their money is impacting the cause they support. You can segment by donations like this:

“Each family who comes to us has a simple need: food. Your $25 donation provides a local family with a weekend of meals. We couldn’t do this without you.”

“The $50 you donated last week will pay for a 12 year old girl’s entire year of schooling and supplies. Thank you for your compassion towards educating our youth.”

“It costs $500 to train a service dog for our veterans. Your generous donation of $100 put us a big step closer to helping a deserving veteran get the help he/she needs. Thank you.”

In each segment, it was focused around the tiers of giving. Donors were grouped into $25, $50 and $100 tiers, and each message was tailored to the amounts that were given. By letting donors how their gift affects the cause they care about, you make it more personal and give them a good feeling about their support.

A/B Split Testing

Another technique that can help improve response rates would be to create message testing, or A/B split testing. The idea is that you create one message (A) and test the response rate against an alternate message (B).

Over time, multiple variables should be tested to see which elements impact the results. The message, the timing, or the design of the marketing materials are all variables to consider when designing message A and B. For example, you can test a pre-existing design (A) to a new design (B) and be able to see if the revised design of B improves the response rates or not.

RBP Methods

RBP Methods provides accounting software, advice, and consulting in financial management for nonprofits. Our financial management systems include software such as Abila MIP Fund Accounting™ and AccuFund Accounting Suite. These and other software solutions for nonprofit organizations provide easy to use, understandable, and useful software to track finances for nonprofits, manage donations, donor campaigns, and much more. Contact us or call 503-648-9051 for a consultation.