Effective Donor Segmentation Strategies to Drive Revenue

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Giving trends in the nonprofit sector are reflecting larger economic patterns. While the total revenue raised on GivingTuesday 2023 showed a small increase compared to 2022, the number of donors dropped by 10%. This and other similar trends could be cause for concern as your donors and development team alike contend with inflation and concerns about the future of the economy.

Although they aren’t favorable, these findings shouldn’t cause your organization to panic. Instead, focus on preparing for whatever the future holds by protecting and diversifying your revenue streams. One way to do this is by strengthening and personalizing your digital marketing efforts to appeal to your supporters’ unique giving motivations, boosting donations.

We’ll explore some of the top strategies you can use to inspire more support for your cause using segmentation—but first, let’s cover the basics of this process.

Donor Segmentation Basics

GivingDNA’s guide to donor segmentation defines the term as “a strategy that nonprofits use to separate a donor base into smaller subgroups based on shared traits and characteristics.” Segmenting donors helps you break down your full donor database into more manageable subgroups.

By uncovering distinct preferences and interests through external data insights, you can create segments based on those details that will help you develop more targeted, tailored communications. These groups, or segments, can be based on a variety of characteristics. Some of the most common categories include:

  • Demographic data like age, gender, geographic location, income, and more.
  • Psychographic data, which denotes information about the donors’ lifestyles, interests, hobbies, and values.
  • Giving behavior like gift size, frequency, and recency.
  • Communication preferences, such as preferred communication channels, frequency, and content formats.
  • Engagement history, which reflects donors’ interactions with your communications, attendance at events, volunteer hours, and more.

These categories simply provide a starting point for your nonprofit. Depending on your unique needs, goals, and projects, you might experiment with more niche or specific segments.

4 Ways to Inspire Donations Using Donor Segmentation

Start with an RFM analysis.

An RFM analysis segments your donors based on the recency, frequency, and monetary value of their donations. This type of analysis can help your nonprofit identify the donors who are most likely to give. This way, you’ll gain a baseline understanding of your donor base and be able to allocate your marketing resources efficiently.

Here is a breakdown of each component of the RFM model:

  • Recency: This refers to the amount of time that has passed since the supporter’s last donation. For example, perhaps they made an online gift two months ago after being inspired by your email marketing campaign.
  • Frequency: This metric indicates the number of times a donor gives, usually within the last 36 months or so, representing how often they donate. Some may only give once a year or less, while members of your sustainer program donate each month.
  • Monetary value: This tracks the amount of money a donor contributes to your cause. The best way to calculate this value is to find the donor’s median gift size over a certain time period, either five years or whenever you acquired the donor.

From here, score donors based on each of these components and then filter them into the appropriate segments. For example, let’s say you have a donor who gave three months ago, donates twice per year, and usually gives slightly more than your organization-wide average gift amount. This donor would have a high RFM score and should be placed in a segment for donors who are likely to donate in response to your marketing efforts.

While RFM analyses can be a great place to start, they only provide limited insight. These analyses can help you forecast how donors will respond to your appeals, but they are purely based on past behaviors. Additionally, the RFM model excludes many other important dimensions of donor behavior, particularly why they give.

Examine interests and psychographic characteristics.

Given the limitations of the RFM model, you’ll also need to learn why donors choose to support your cause. When you’ve uncovered their deeper motivations and personal connections to the issue, you can infer which stories, strategies, and appeals would be most effective in your marketing campaigns.

For example, let’s say a healthcare organization that researches multiple sclerosis (MS) and provides services to those battling the disease wants to dig deeper into why donors support the cause. Here is how this organization could use common psychographic traits to segment and appeal to donors:

  • Lifestyle: There is a wide variety of lifestyle factors to consider, such as donors’ opinions, attitudes, social class, and personality. For example, are they adventurous risk-takers or conservative and family-oriented? The healthcare organization decides to segment donors based on their activity level and shares appeals that highlight the importance of mobility in quality of life to those who like to exercise and get outside.
  • Hobbies and interests: This includes the things that donors like to spend doing in their free time, such as golfing, hiking, cooking, creative writing, or volunteering. The nonprofit creates a segment of donors who are passionate about nutrition and healthy, home-cooked meals. Then, it shares educational resources about nutrition, promotes tickets to a healthy cooking workshop, and invites supporters to participate in a recipe contest.
  • Values and beliefs: Understanding donors’ values and belief systems will help you appeal to their sense of purpose. For instance, our example nonprofit could find that many of its donors believe strongly in equality and social justice. In this case, the organization could target the segment with appeals that highlight how its work and research work to address healthcare disparities and provide desperately needed services to those with MS.

For most people, their values, beliefs, and interests are deeply ingrained in who they are. So, you’ll be able to rely on insights from these segments for much longer than other traits that are subject to change (e.g., income), which can help you run profitable fundraising initiatives long into the future.

Track donor lifecycles.

Your donors pass through several distinct phases or “seasons” in their interactions with your nonprofit. Together, these phases make up the donor lifecycle, a process that encapsulates donors’ journey from discovering your nonprofit and donating for the first time to upgrading their support.

Understanding where donors fall in this lifecycle is crucial for properly welcoming new supporters, creating donor stewardship strategies, cultivating major donors, and motivating lapsed donors to re-engage. For example, let’s say you create segments for first-time donors, multi-year donors, and those who haven’t given in the last year. Here is how your communication strategies might differ for each segment:

  • First-time donors: Start with a heartfelt thank-you, then aim to welcome these donors and educate them about your cause. Share a welcome email series or mail them a packet with materials they need to get to know your organization. Inform them of other ways to get involved to encourage them to engage more deeply. Carefully track data about this segment’s preferences and responses to messages to improve your recruitment efforts.
  • Multi-year, active donors: During this phase, focus on stewarding your relationships with donors with the eventual goal of an upgrade. Keep your nonprofit on their minds by frequently communicating with them through their preferred channels. Make sure these messages also consider the other traits we’ve discussed. For example, invite them to fundraising events happening in their local area or share about initiatives that appeal to their special interests.
  • Donors at risk of lapsing: These donors haven’t engaged with your nonprofit in a while—it’s up to you to determine why that is and inspire them to come back! Try sharing a survey asking them why they no longer support your organization to pinpoint weak points in your strategy. This segment likely won’t respond to demands for donations. Instead, start with smaller, more doable asks (e.g., reading a blog post about a specific beneficiary). Ask them to come back, whether they are attending an event, volunteering, or donating.

Knowing where your donors are in their journey not only boosts retention and revenue—it also shows them that you notice and care when they make that first gift or haven’t engaged in a while. They’ll feel valued for their individual efforts to support your work and seen as more than just a dollar sign.

Create donor personas.

Donor personas are profiles of fictional people who represent your target audience(s). Personas are designed to encapsulate the main traits and motivations of each donor segment, giving you a clear image of who those supporters are and what pushes them to take action.

For example, here’s a donor persona for a fictional donor named Clara Thompson:

Sample donor persona (interpreted in text below).

Based on this persona, your team could extrapolate insights about the segment’s preferences. For example, someone like Clara who travels often, leads a busy life, and is passionate about technology would likely respond best to digital communications that make it quick and easy to donate. However, you may have another segment of retired seniors who would rather receive monthly updates via direct mail.

Referencing your entire donor database is important—this shows you organization-wide patterns you might otherwise miss. However, donor segmentation is an invaluable tool that will only become more important as hyper-personalized marketing becomes the norm. Applying these segmentation strategies to your marketing campaigns will give you the knowledge and ability to target donors with messages that feel made for them.

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5 Tips for Engaging Supporters with Short Text Messages

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As a nonprofit professional, you know that every donor counts. That’s why you employ a variety of strategies, from email newsletters to fundraising events, to keep them invested in your mission. Donors give to your organization because they’re passionate and believe in your cause. However, retaining them can be challenging. According to Bloomerang, the average donor retention rate for nonprofits hovers around 45%.

To nurture authentic, lasting relationships with your donors, you need to leverage a channel that’s built for personal, one-on-one communication: text messaging. In fact, according to Tatango, over 20% of donations come from text messages and nonprofits earn an average of $5 for every $1 spent on text messaging.

If your nonprofit is ready to make the most of this innovative and impactful channel, use these tips to construct your strategy.

1. Choose comprehensive nonprofit text messaging software.

To get and stay in touch with your nonprofit’s community, you need to equip your team with the tools it needs to send regular, effective messages. That’s where nonprofit text messaging software comes in. When used as part of an omnichannel campaign, nonprofits can see an increased return on investment across all channels.

To find a solution that fits your nonprofit’s needs, look out for these key features:

  • A2P (Application to Person) messaging. Once supporters have opted into receiving text messages from your nonprofit, use A2P messaging to send mass texts that can reach everyone in your contact list at once. This way, you can ensure that you’re not leaving any important audience members out of your communications.
  • Text-to-donate. Using your text platform, you should be able to create a custom keyword that donors can text to make a gift. They’ll then receive a link to your donation form, which they can conveniently fill out on their mobile device.
  • Secure sending. Donors need to know that their privacy and data are protected. When choosing the right nonprofit text messaging software, ask questions about the security of the platform. Your best bet is to find a platform that is SOC-2 compliant, the highest level of security.
  • Segmentation. Send only the most relevant messages to your supporters through segmentation. Group them by factors such as location, past donation history, or event attendance to make each recipient feel valued and strengthen your connection with them. 
  • A/B testing. Your supporters will tell you how they want your organization to communicate with them. All you have to do is listen. Your text platform should allow you to use A/B testing in your campaigns to learn more about supporters’ preferences.

After you’ve found a suitable solution for your nonprofit, put together a subscriber list, ensuring that you receive prior consent to remain compliant with the Telephone Consumer Protection Act (TCPA).

2. Personalize each text message.

When donors receive text messages from your nonprofit, they want to feel as though you’re addressing them individually, not as a generic source of revenue. While your text messages should be short, you should still tailor them to the recipient.

Segment your subscriber list and reference relevant details from your database when sending messages, such as:

  • Preferred name
  • Location
  • Engagement history
  • Past giving
  • Programs or areas of interest

Use your platform to schedule text messages at times when your supporters are most likely to see them, such as afternoons or on weekends. By monitoring opt-outs, unsubscribes, open rates, click rates, and other key metrics, you can learn the right cadence and frequency for texting your supporters.

 3. Incorporate attention-grabbing visual content.

Your nonprofit’s supporters get involved because they want to play a role in your impact on the community. Incorporate images, videos, and GIFs in your text messages to help them visualize their impact and retain their support.

For example, you could make your text content more eye-catching by including:

  • Images of beneficiaries
  • Snapshots of your volunteers hard at work
  • Emojis relevant to your mission
  • Infographics that illustrate the importance of your cause

Make donors feel empowered to join in on the difference you’re making by sharing uplifting, inspiring visual content and highlighting the role they can play in it all.

4. Include only one call to action per message.

Your nonprofit’s text messages should be short and simple. This means that you shouldn’t overwhelm your audience with too many calls to action (CTAs) per message.

Follow these best practices to inspire your recipients to take action:

  • Only include one CTA per text message.
  • Add a sense of urgency to your CTAs.
  • Share a link to a relevant landing page.

Whether you’re encouraging supporters to make a donation or sign up to volunteer, be sure that your page is mobile-friendly so they can take action directly from their phones.

5. Share a variety of engagement opportunities.

When you text your friends or family members, chances are you’re not sending them the same type of message over and over again. The same applies to your nonprofit’s text messages.

Keep your communications lively and interesting by sharing a variety of engagement opportunities, such as:

  • Signing up to volunteer.
  • Registering for an upcoming fundraising event.
  • Becoming a peer-to-peer fundraising participant.
  • Joining a social media community.

According to Double the Donation, 47% of donors also support nonprofit causes through online raffles or sweepstakes, 45% purchase from an online store benefiting a nonprofit, and 24% give through online auctions. The more opportunities you put in front of your supporters, the more likely they are to engage in the ways that best appeal to them.

Throughout your nonprofit text messaging campaign, keep an eye on metrics such as your open rate and click-through rate to measure the effectiveness of your approach and adjust your tactics as needed. Over time, you’ll be able to share news, inspire action, and retain more donors through text messaging.

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Microinteractions 101: A Guide for Nonprofit Marketers

Your nonprofit’s website is one of its most impactful digital marketing tools. It’s the hub for all important information about your organization and allows your supporters to get involved in a multitude of ways.

However, making your website stand out from the crowd can be a tough feat. It’s the little things that make the best nonprofit websites rise above the rest—like microinteractions.

In this guide, we’ll walk you through what microinteractions are, the benefits of including them on your website, and tips for creating them so you can take your nonprofit website to the next level.

What are microinteractions?

According to Kanopi, microinteractions are “the small moments and design elements that users experience on your website that engage them more deeply.” Though they may be subtle features, microinteractions can have a huge impact on user experience.

To give you an idea of what microinteractions look like, here are a few examples:

  • A donation progress bar that updates in real time
  • Donation buttons that change color or size when users hover over them
  • Thank-you animations that appear after users donate or sign up for an event
  • Personalized greetings for returning visitors
  • Branded loading animations, such as a cat crawling across the screen for an animal shelter’s website

The more interactive of an experience your supporters have, the longer they’ll stay on your website to check out all it has to offer. That’s what makes microinteractions so important—these elements create a dynamic online experience, leaving a positive impression on visitors.

An Example of Microinteractions in Action

While every nonprofit website is different, it can be helpful to draw inspiration from other sites that have successfully implemented microinteractions. Take a look at Rice University’s virtual tour website. This site has a variety of microinteractions, including a rocket ship that moves when you hover over it.A screenshot of the microinteractions on Rice University's virtual tour website

While this is a small animation, it excites users who may be interested in the school and encourages them to explore all that Rice University has to offer. Think about how your nonprofit can add small features like this to its own most important pages to build anticipation and increase engagement on your site.

Benefits of Microinteractions

Now that you have a better understanding of what microinteractions are, you may be wondering why these small features are so beneficial for nonprofit websites. The advantages your organization will receive from implementing microinteractions include:

  • Increased engagement. Microinteractions make your website more exciting and interactive for users, encouraging them to engage with your content more deeply.
  • Improved user experience. Not only do microinteractions make your website more engaging, but they also make it easier to navigate your site. By highlighting important landing pages and directing users to take action, they’ll know exactly what to do and where to go on your website.
  • Enhanced emotional connection. Microinteractions that draw attention to impact stories, feature mission-related animations or illustrations, or surprise users can evoke emotions and enable them to better remember your site and cause. For example, a children’s healthcare organization may add animations to its success stories page, helping users remember each child’s story and form an emotional connection to the nonprofit’s mission.
  • Better retention. When users have an engaging, intuitive, and memorable experience on your site, they’re more likely to stick around. Therefore, microinteractions help promote user retention, and once they’ve become supporters of your cause, donor and volunteer retention as well.

By adding these understated but unique design elements to your website, you can provide a positive user experience, leading to higher engagement and long-lasting supporter relationships.

Tips for Creating Successful Microinteractions

To unlock the benefits of microinteractions, you’ll have to strategize about how and where you can add them to your website to make it more engaging and exciting for users. Before you dive into your microinteractions strategy, keep the following tips in mind:

  • Focus on your goals. Microinteractions aren’t just design elements; they’re tools you can use to shape user behavior on your site. Each microinteraction should help your organization achieve one of its broader goals. For instance, if your nonprofit is trying to increase online donations, animating your donation button would align with your objective. Alternatively, an organization looking to enhance supporter stewardship may add a personalized greeting that welcomes users back to their site.
  • Keep it simple. When it comes to microinteractions, less is more. They should feel like a natural part of your website that doesn’t distract from the actual content of each page. Since microinteractions are intended to enhance the user experience, ensure the features you add to your site don’t require users to go out of their way or become overcomplicated to interact with. Consider testing your microinteractions beforehand to confirm they’re intuitive.
  • Explore your CMS’s capabilities. To facilitate microinteractions on your site, get to know the options your content management system (CMS) offers. Different themes or plugins may lend themselves to different animations. For example, WordPress plugins like ACF allow you to better customize your site and create microinteractions, such as showing different content to new and returning users to enhance user experience.
  • Choose an appropriate web page format. If you’re building a new page on your site that you’d like to add microinteractions to, choose a web page format that allows you to easily incorporate microinteractions. The Nonprofits Source web design guide explains that responsive and dynamic layouts offer a positive user experience and allow you to add interactive elements, lending themselves well to microinteractions.
  • Collect feedback. Determine your microinteractions’ effectiveness by directly asking your supporters. While you may not point out the specific techniques you used to engage users, you may send them a survey asking about their overall experience on your website and whether anything in particular stood out to them. You may also use website analytics to figure out which microinteractions receive the most engagement.

Remember that the microinteractions that work for other nonprofit websites may not be suited for yours. Customize the microinteractions on your site to your organization’s specific goals, web tools, and users for the best results.

Make your nonprofit’s website shine with microinteractions. They’ll not only create a positive experience for users but also make your organization stand out in their minds, helping you increase donor retention and build strong supporter relationships.

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Top 4 Digital Marketing Tips to Grow Your Small Business

In the digital age, your small business’s customers are bound to search online to discover the next great restaurant, learn more about the trendy new cafe in town, or peruse Google reviews of local dog boarding facilities. Studies show that 75% of these customers will visit the local stores they research within 24 hours.

This statistic reveals just how important it is for small businesses like yours to have an established, easy-to-find online presence. In this guide, we’ll explore some of the top strategies your organization can use to level up its digital marketing efforts:

When it comes to marketing, data is king. Let’s begin by exploring how (and why) your business should use its data to understand customers and inform its campaign efforts.

Leverage your data.

To leverage customer data, you first need to collect and store it. Track information about your customers, marketing efforts, finances, and website traffic. Each of these points informs some aspect of your marketing strategy, whether it’s the communication channels you use or the content of your promotional messages.

For example, let’s say a dog grooming business wants to upgrade its digital marketing and online presence. The company already uses Gingr’s pet business software, which offers useful features like detailed pre-check-in forms, online bookings, report cards for pet parents, and loyalty rewards. But there is more to these capabilities than meets the eye—they also help the business learn more about customers’ preferences and behaviors.

The grooming business can use this data to identify booking patterns, which communication channels customers use most (e.g., did they opt into text or email notifications?), and how most customers learn about the business. For more granular data about what promotions resonate with your customers, consider sharing surveys with customers, A/B testing various marketing messages, and analyzing engagement from past campaigns.

Align with audience preferences.

Once your business has collected customer data, it’s time to analyze the information and translate insights into actionable next steps. Almost every piece of information you gather about your customers can be used to create personalized marketing campaigns that deeply engage them.

Some of the most common preferences you can track to tailor communications include:

  • Communication channels: Do your customers prefer longer marketing emails or short and snappy text messages? Determine which channels they use most often and share messages through them to ensure customers see them.
  • Message timing: Audiences may engage with their preferred channels or be more likely to respond to marketing messages during a certain time. For example, perhaps a customer scrolls their email looking for coupons each Saturday morning.
  • Message frequency: This describes how often customers prefer to receive messages from businesses. Understanding this preference will help you hit the sweet spot between sending so few messages that customers forget about you and so many that they get annoyed.
  • Content format: Determine whether customers would rather see text-based content, photos, graphics, videos, or audio communications. For example, a quick ad on a local radio station may be most effective for busy, on-the-go customers.

Remember to tailor the content of the message as well. Greet customers by name when possible, and consider referencing the last purchase or recommending a product they might like based on past behaviors. This shows that you understand them and want to provide the best experience possible.

Optimize your website.

According to Allegiance Group, a polished website that appears in the top results of search engine results pages helps organizations look more trustworthy and credible. But to achieve a website that converts customers, your business will need to ensure its site:

  • Meets accessibility standards outlined in the Web Content Accessibility Guidelines (WCAG).
  • Is easy for users to navigate (e.g., include a menu bar at the top containing links to landing pages like your product list, pricing, social media accounts, blog, etc.).
  • Has valuable, original content that meets users’ search intent.
  • Has a unique, straightforward domain and web address, like your company name, to make it easy for customers to find your website.

Keep in mind that many of your marketing messages will lead back to your website, so it needs to function as a central information hub for customers.

Invest in local marketing.

Local marketing simply targets customers within the areas near your business. Usually, this marketing extends to a certain radius (e.g., 50 miles) outside your company’s physical location(s). These marketing messages should be tailored to the values and preferences of the local area and strengthen your ties to the community.

Here are some of the best ways to optimize your marketing efforts for your local area:

  • Appear in local media. Your customers are likely interested in and trust local newspapers, magazines, blogs, radio stations, and TV channels. Purchase ads in these publications and communication channels to spread awareness of your business and build credibility as a trusted piece of the local economy.
  • Tag your location on social media. Most social media platforms allow you to tag a specific location in your posts. Add a tag with your business’s address to each of your posts so that when potential customers see a photo of your product or service they know where to go. Additionally, add your address to your profile—if you have multiple locations, indicate which town each is based in.
  • Incorporate SEO for local terms. Search engine optimization (SEO) is the process of improving your company’s visibility on search engines. This is typically done by having a functional, accessible website with valuable content that targets keywords related to your product or service. To attract a local audience, incorporate keywords like your town or region into the website copy. For instance, an ice cream parlor’s homepage title could read, “[State Name]’s #1 Vintage Ice Cream Parlor.”
  • Add location-specific terms to Google Ads. Google Ads are the advertisements that appear at the top of the search results page. If your business uses Google Ads, make sure to signal that you are located in your customers’ area by including your local phone number, town or area name, and any other useful indicators (e.g., Voted [City]’s Best Pizza).

Additionally, your business can become a prominent member of the community and build its reputation by engaging with nonprofits and social causes. For example, a dog daycare business could provide free daycare services to shelter dogs to give them a change of scenery and new playmates. You could also sponsor nonprofit events, start corporate giving initiatives like matching gift programs, and participate in corporate volunteerism.

As you plan your digital marketing campaign, always remember to center your audience so you can reach, engage, and motivate them to support your company with your communications.

These digital marketing strategies will help your small business expand its reach and revenue, developing a sustainable base of loyal customers. Plus, success online could result in lucrative e-commerce opportunities, allowing you to extend your business to people across the globe.

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