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© 2019 by Blue Sky Philanthropy

Simple segmentation strategies for your small shop

September 13, 2017

I once inherited a database that had every inactive donor marked “do not contact.”

 

A well-meaning staff person had taken weeks to painstakingly comb through every donor record, manually marking donors we hadn’t heard from in some time – effectively ensuring we'd never hear from them again.  

 

Yikes!

 

I know the intention was good – they were trying to manage our growing list, and be more targeted and cost effective in our mailings and other communications.

 

But there is a right and wrong way to segment your data.

 

No matter the size of your organization, you can implement some of these simple strategies to segment your donor data and ensure both you – and your donor – will be better served. 

 

Of course, there are thousands of different ways you can slice and dice your data – but if you aren’t currently segmenting, here are some of the basics.

 

Recency: When did they last give?

 

If you haven’t already defined what your shop means by an active and “lapsed” donor, this is a good place to start.

 

(I know, I know – as fundraisers, our language to describe donors stinks! But for the sake of common understanding, I’m going to use the most frequently used terms).

 

There are varying definitions of what constitutes an active and a lapsed donor – here are the definitions I used over the course of ten years at one small shop, so I can attest that they are tried and tested:

 

  • An active donor has given in the past 18 months.

  • A lapsed donor has last donated between 18 and 36 months ago.

  • A former donor has last donated more than 36 months ago.

 

All of the above donors were communicated with and solicited by our organization, unless there was an explicit reason they needed to be removed from the list (donor was deceased, specifically asked us to stop contacting them, etc.)

 

We gave special attention to trying to reactivate lapsed donors, using both the phone and mail to find out why we hadn’t heard from them lately – many “lapsed” donors still considered themselves active donors, and had no idea how long it had been since their last gift.

 

All former donors heard from us at least a couple times a year – we’d often include these donors in our prospect mailings, or other lower cost efforts, and we consistently had a better response rate than you would with a traded list.

 

Frequency: How often do they give?

 

In our smaller shop, this segment focused primarily on monthly donors, or sustainers.

 

As an organization focused on growing our sustainer base, we had a stewardship and communication plan we customized for our monthly donors. Donors who commit to you at this level deserve special attention and treatment!

 

I also slipped another important group into this segment – the longtime loyal donor who had been giving over the course of multiple years (okay, data nerds, this is probably better covered by a duration segment, but I like to stick to three buckets to keep it simple).

 

Donors who had been giving for five years or more got specific acknowledgement of their long-time support in thank you letters and other communications.

 

Value: How much are they giving?

 

One common mistake I see is segmenting donors based on the value of their single gifts, as opposed to looking at the value of their annual cumulative giving.

 

This simple segmentation structure based on value works for many smaller shops – if you haven’t calculated what a major gift is for your particular shop, this is a good general structure to start with:

 

  • Donors giving up to $249

  • Donors giving between $250 and $999

  • Donors giving $1000 and over

 

Donors giving between $250 and $999 would be considered your mid-level, or intermediate donors. If you haven’t got a mid-level giving program, it’s time to think about starting one – smaller shops are really well positioned to use effective mid-level strategies (stay tuned - more on this in next week’s post!)

 

Donors giving $1000 and over would be your potential major donors, and would be treated accordingly – inviting them to a face to face meeting with you and your ED, providing more customized stewardship for their gift, and creating a more personalized plan for cultivation and solicitation.

 

Using these three simple segmentation buckets can help you be a more effective fundraiser by better managing your data. Are you currently doing any segmentation with your data? Do you have additional segmentation strategies you’ve found effective at your smaller shop?

Emma Lewzey, CFRE is an award-winning fundraiser who has been helping great causes like yours build and grow successful fundraising programs since 1995. She’s the President-Elect of the world’s largest Association of Fundraising Professionals (AFP) Chapter in Toronto, and the National Chair of AFP’s Fellowship in Inclusion and Philanthropy. Contact Emma to book your free discovery session, and find out how you can work together to strategically focus your precious resources on the fundraising initiatives that truly work.

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