Oct 8, 2018
Donor Segmentation: Why it Matters and How to Use it
Data has many uses in the nonprofit world and beyond. Segmenting your donors and catering marketing towards the different segments enables organizations to increase donor retention and donations!
Why does donor segmentation matter?
There are times each day when you tailor what you say, and how you say it, based on the person you are communicating with. If you were pitching an idea to your manager, co-worker, and mother, would you use the same language every time? No, you would customize each pitch based on the individuals’ experiences, knowledge, and relationship to you.
You should also think about this when communicating with donors. There are several ways that you can segment your donor base, with the two most common being based on age and donation frequency.
When you segment your donors based on age, you will find that there will be different methods of social media to communicate based on age group preferences and habits, as noted below.
For reference, here are the age groups and their titles:
Baby Boomers: born 1946-1965
Generation X: born 1966-1976
Generation Y: born 1977-1994
Generation Z: born 1995-present
Currently, the internet has over 3.17 billion users and 2.3 billion active social media users. The top social media platforms for businesses are Facebook (1.71 billion users), Pinterest (100 million users), Instagram (400 million users), Twitter (320 million users), LinkedIn (450 million users), and Youtube (over 1 billion users). Here are some stats on the different networks and some information on how you can reach different ages of donors using this information!
Facebook is far and away the most popular social media platform with over 1.71 billion users. While the majority of Facebook users are between the ages of 25 and 32 years old, Facebook is the most popular social media platform across all age groups. Your organization can create and customize a Facebook page to best reflect your brand.
Facebook has become a part of daily online usage for millions of users. To keep your followers up-to-date, you can share interesting content about what your organization is currently doing. This content can include written status updates, photos, videos, events, and more! The key is to post quality content that will engage your target demographic.
Pinterest is a social networking site that allows users to share and discover new interests by ‘pinning’ images of videos to their boards; users can create different boards for different categories. Pinterest has historically been popular among women, with 42% of all online women using the platform, but has risen in popularity with males: The male audience is now over 40%!
Pinterest is an incredibly visual experience for the user, so you need eye-catching images to get the attention of your audience. By posting powerful images, you can stir emotion among your followers, which will make them want to learn the story behind the photos. You can create captions to add information to the photo and link the image to your organization’s website as an invitation for a user to click through to learn even more.
Over 90% of Instagram users are younger than 35 and belong to Generations Y and Z. In fact, 32% of Generation Z cite Instagram as their favorite social media tool. Similar to Pinterest, Instagram was made for sharing photos and videos. If your organization wants to use Instagram, you need to create a plan to make this platform a success. This means posting photos and videos regularly, building a community of followers, and interacting with your donors on the network. Instagram can also be used as a promotional tool to showcase the different aspects of your nonprofit’s work. Similar to Pinterest, Instagram is most effective when the images shared tell a story about your organization and your impact.
What makes Instagram different from other social media sites is the way it is used. Instagram users frequently check the site and engage with posts at a much higher rate than with other social media networks.
Twitter is most popular among the 35 and under group. However, Twitter usage is much more diverse among age groups than Instagram and therefore can be a good way to reach multiple segments of donors. Messages on Twitter must be short (under 280 characters), meaning that you need to share your intended message in a concise way. Twitter is the perfect place to send quick messages ranging in topic from your organization’s major announcements to small details about your 5K event. The main goal is to keep your audience in-the-know so they stay interested in your cause. Also, you should always provide a link in your tweets that users can access to gather more information from your website, Facebook page, or other platform.
To increase follower involvement, your organization could consider a twitter contest. Contests create a relationship with current followers and open avenues for gaining new followers who decide to participate. For example, you can give a discounted ticket for a tweet “retweet” or reply, or create a poll to ask followers what they would like to see the most at your next event.
LinkedIn is equally split between male and female users (each at around 50% depending on the day) and is fairly equally used between Generations X, Y, and the Baby Boomers. Compared to other social media networks, LinkedIn is more professional and this atmosphere influences the type of material that performs well. For nonprofits, LinkedIn is perhaps the most underutilized channel. LinkedIn is currently 414 million users strong, which means that telling the “professional” side of your organization’s story is definitely worth your time. By creating a company page on LinkedIn, you can establish your brand professionally and provide logistical information about your organization.
Also, LinkedIn is a great place to post about volunteer or career opportunities within your organization or on your board. This is because users expect to see this type of material on LinkedIn and will usually be more receptive to it!
YouTube is the go-to platform for individuals, artists, and organizations alike for sharing video content. Approximately 30 million people view YouTube each day, making it the optimal place to share film about your organization or testimonials from the communities your mission serves. Like other social media channels, viewers can search, share, and subscribe to your videos. More than half of YouTube views come from mobile devices, which means that you can catch people on the go.
Music videos are among the top-streamed content on YouTube, so perhaps you should match your mission to a melody…
To recap what’s above, here are the best ways to communicate with each age group:
Donation frequency segmentation:
You can also segment donors based on how often they donate to your cause, and tailor your communications strategy based on this. Listed below are a few categories of donors: first-time donors, monthly donors, year-end donors, long-term donors, and event attendees.
First-time donors have the lowest retention rate because they often don’t feel as connected to your organization after one donation than your other donors do after years of donations, volunteering, and other involvement. In order to retain these donors, you need to treat them differently and communicate with them in a way that makes them feel special.
It’s best to send them a personalized email instead of opting for a general message over social media. Include a call-to-action in the message that will entice them to either donate a second time in the near future, volunteer, or learn more about your organization so they stay involved and feel connected.
For first-time donors that make larger donations, you may want to consider inviting them to meet with you or see your location. This will help to create a more personal connection and inspire them to become more involved in your organization through attending events and participating in other donation campaigns.
Based on the giving level, the highest retention rates for new donors are donors who give more than $250. New donors who give less than $100 have an average retention rate of 18%. This doesn’t mean you should overlook donors giving smaller gifts — you should find a way to recognize the large gifts from new donors because you are more likely to retain them. Spur the smaller donations and increase retention among the $100 and under group by using social media platforms to encourage smaller donations throughout the year.
Monthly donors are VIPs. They give you the opportunity to send them a thank you message (and other key information) every month. It’s important that these messages are unique to keep your donors reading, and even looking forward to notes from you.
When you thank your donors, give them monthly updates, shine the spotlight on some volunteers, and celebrate your accomplishments as an organization! If you are an organization focused on mental health, use this as an opportunity to thank your donors for allowing you to spread awareness.
Repeat donors are retained at a much higher percentage than first-time donors: 63% versus 18%. While it’s important to retain all donors (new and retained), you should put most of your energy into retaining repeat donors from year to year. If your organization has any benefits for long-term donors (early access to gala tickets, discounts on branded merchandise, etc.) showcase those on social media. Show your followers how much you care about your long-term donors, and you just may inspire new donors to become long-term donors.
If you have donors that only give during the last months of the year, you shouldn’t be surprised; 31% of all donations come in December, with 12% coming in the last three days of the year. In order to make sure these year-end donations are coming to your organization, you need to create and execute a communications plan that incorporates various forms of social media and email.
A great way to encourage people that only give at year end to donate to your organization is to create a one-pager to send out and post that focuses on everything your organization achieved that year, from January to November. Some key statistics to share could be the number of people you helped, communities you impacted, animals you fed, shots you gave, hours spent in the classroom, or dollars raised. You can create a social media campaign that simply showcases these statistics and encourage donors to give so that your organization can have an even larger impact before the year is over.
Those who attend an event and don’t give the rest of the year usually do so for one of two reasons:
1. The ticket to attend the event was relatively expensive and the donors don’t feel they need to give more because of that high ticket price.
2. They attended the event because of their interest in event itself and not necessarily your organization.
In scenario one, you are more likely to gain donations if you keep the donors updated on the work you are doing with their donations from the event. It’s also important to thank them for their attendance at the event you had. Invite them to return the next year with friends! Let them know about other upcoming events because the more events they attend, the more likely they are to begin making donations outside of the events.
In scenario two, figure out what specifically brought these people to the event. Was it the venue, honoree, musical guest, theme, celebrity guests? You can gather this feedback by sending out surveys, or directly reaching out to attendees you noticed didn’t give anything at the event or following.
Long-term donors are the most invested in your organization’s mission. They deserve to be invited to all of your events and should be routinely thanked when they give or participate. Long-term donors are often connected to the organization on a personal level and can be great advocates for bringing new donors and volunteers to help with your mission.
To recap on the best ways to communicate with donors based on donation frequency:
Regardless of how you segment your donors, nonprofit organizations need to realize that creating unique communications plans based on their different donor groups can help increase overall donations to their organization as well as donor retention.