Learning patterns/Donations segmentation
What problem does this solve?
Nowadays, it pretty much admitted that one fundraiser can not communicate the same way to all donators. They do not give all for the same amounts nor the same reasons. Some give because they adhere to the ideology of free Internet, some because they were convinced by the banner they have seen on the site, others are only motivated by the tax benefit from the donation.
Chapters wishing to maximize donations to diversify their sources of income, can not afford to have a unique speech for all their donators. Indeed, the key arguments will differently convince each giver's typology.
What is the solution?
The segmentation of donators, or the classification of them according to their type, can be a solution to increase donations. This approach does not aim to recruit new donators, but to maximize donations from those already known, by suggesting a larger gift than they have done previously.
The solution is to establish categories or segments of donators. From the statements of a CRM or a donator database, one should be able to easily retrieve listings based on the amount of donations.
The main objective will be to analyze the typical behavior of each donator category to understand their motivation.
At Wikimedia France we segmented our donators into 12 categories: €5.00–9.99 €10.00–19.99 €20.00–29.99 €30–39.99 €40.00–49.99 €50.00–69.99 €70.00–99.99 €100.00–299.99 €300.00–498.99 €499.00–999.00 €1000.00–9999.99.
The next important task is to prepare several emails categories. Indeed, it raises amount donor attention. If one of your previous mailing was not effective, one of the new arguments you will use will be the one that will encourage donations. Also, many donators want to give to the movement but they forget because they start doing something else (like everyone on the Internet) or because they have much more emails to deal with before sending you a check. A reminder will then be very efficient.
So we sent 36 different messages for the 2014-2015 campaign. The personalization to do is important. One needs to focus on the tone of the email as much as the content.
Things to consider & Risks
It is very important to define the necessary segments. Too many segments will cause too much work for fundraisers and the result will be limited. On the other hand, too few segments will not be effective enough in light of the strategy.
The biggest risk is certainly a wrong communication with each segment. Therefore donations' segmentation is a work for several years.
When to use
On the occasion of a fundraising campaign. In France, we have a habit of performing our campaign at the end of the year, after the foundation's one. The end of the fiscal year for donors is generally conducive to their awareness for the tax benefit.
Wikimedia France is in the ability to issue tax receipts (required for deductibility), thus rebates on taxes are allowed for our donators. Waiting until the end of the year allows us to remind each donor they must give quickly if they want to reduce their taxes.
- Assemble a donators base
- Classify donors based on the amount of annual donation
- Define categories where find most donors
- Set expectations for each category
- Determine how to communicate best regarding the expectations of each category
- Prepare several email for each category
- Define the most appropriate time to send emails
- Look at your computer screen and look at the money arriving
- F5 (repeat until satisfaction)
- Analyze evolution of average donation for every category
- Compare the effectiveness of each email for each category
- Define the most specific expectations of each category
- Carry a note for the next call for donations
What was our outcomes and potential progression
Regarding this strategy, we had a huge progression on many categories, especially the lowest categories From 0 to €70.00, with a peak of a 21% raise on the €10.00–19.99 segment. This is extremely interesting because most of our donations belong to this category.
The strategy was less efficient for big donators. Indeed, both the categories €499–999 and €1000–9999 have faced a 9% drop regarding the average donation value.
We now need do define exactly the needs of our big donators in order to make them give more again next year but especially to adapt our communication with them and give more sense to their donations.