Segmentation Academy

And so with that, let's dig into a perspective on how to look at segmentation and channels. And this is where we see a lot of the traps happening. And the first big one is the the type of segmentation that is channel first segmentation. And so we see this quite a bit in many organizations. We've got a direct mail list and we've got an email list that we can reach. So how do we segment our direct mail? Who do we include? And then a separate exercise, how do we segment our email list and who do we include? What ends up happening here is we've got disconnected messages across those channels, and it's it's a channel centric experience for the donor. It's not really a donor centric experience. It's not in line with where the donor's at in their journey. Apart from all that suboptimal experience, it also gives you fragmented analytics because if your messaging is different between your channels, and I'm only including two here, but if your messaging is different between those channels, then you don't really know what motivated the gift, which message resonates with your donor more than another. And so doing things like this is really focusing on who can be contacted within each channel instead of who should you contact and on which channel. So that brings us to the way that we like to do things is more of segmenting your donor universe at large. So regardless of your channels, excluding your channels from your segmentations, just looking at your entire donor universe and segmenting that. And then once that is segmented, having clarity and visibility to choose which segments should receive which communication and on which channel. And from there, can really layer in a much more strategic communication sequence and make better informed decisions on how to communicate with each of these segments within your larger donor profile. Now we've just flipped the script. We're really talking about donor centric experience in communication versus that channel centric or channel first experience.

Now the interesting thing with all this is while I'm in this, stage here, everything is dynamic. So I can refresh everything here, and all the numbers can re will recalculate based on fresh live data. When I get close to my campaign so I can do this six, eight weeks before my campaign launches, have my numbers have a projection of my numbers. And as I get closer to my actual campaign, and I'm a week or two out and now I need to lock it in and send perhaps send my mail house the data, this is when I do my campaign structure lock. So right now, everything is unlocked. It's all dynamic. When I lock that, it asks me to refresh it. I'm gonna skip that just for time. And so when I lock that, all the numbers go from static pardon me, dynamic to static. Now everything is locked in. These numbers won't move anymore. And this is where I can now push these numbers into Razor's Edge and, assign those appeals. So I can push all that data just with a click of button. Obviously, I didn't finish assigning the appeals, but you can notice that while it's pushing, I can even assign more appeals here while it's actually working. And and we're tracking everything that's being pushed and not pushed. We're telling you how long it's gonna take and when it should be ready.

Now let's get into the segmentation strategy and really look at how did we come up with these various segments. So these are all fine and dandy here, but how do we come up with this peer to peer donor? So I'm gonna actually just navigate to my campaign strategy here, and I'm gonna show you what that looks like. And you may have noticed I was using the same campaign strategy for more than one campaign. So this is an important thing that we see over and over again. If you build segmentation strategy agnostic of your channels, agnostic of your campaign, whether you're using AmpliPhi or or you're doing so in with regular queries or anything else in raiser's edge nxt. If you build it agnostic, then you can actually reuse it and save a tremendous amount of time. And so here we've got the segmentation that we were working on. And you can see I've got my segments monthly, new donors, and annual. And within each of these segments, I've got criteria that I will show you here. So I've got inclusion criteria and exclusion criteria. So what this does is it basically says include all of these constituents and ex and remove from that pool anybody that's in the exclusion list as well. I can add as many inclusions as I want. Every time I add an inclusion, it actually pulls in queries live from raiser's edge nxt, and you can actually even create a new query in raiser's edge nxt directly here. You can also click on the query name and open up the query directly in raiser's edge nxt, and you can even click on the list on all these numbers are clickable to view the the list of constituents that are part of that number there. So you'll see I've got my monthly donors. I've kept it very, very simple. Obviously, this can become way more complex with multiple inclusions, multiple exclusions. But for the demo, I wanted to keep it simple so we can focus on some concepts. So I've got a query or a segment rather here that's my monthly donors. I've got one here that's my new donors, and I've got one here that's my annual donors in the last five years. An important thing to remember, again, to concepts is that any segmentation like this, hierarchy is important because an annual donor, if I'm looking at anybody who's given a gift in the last five years, I'm likely to have in that pool monthly donors or new donors as well, because they have given a gift in five years. And I may even have monthly donors who have given one time gifts in the last five years, but who are now giving monthly as well. And so the order in which these appear is very, very important. And the way that there's ways to do that order, whether you're using, you know, Riz Edge, QuickLetters, or if you're doing it in Excel, the way we do it in AmpliPhi here is simply by listing them in an order. So if I wanted to, you know, move my annual donors above my monthly segments, then what that does is it recalculates all of those segments with a preference. So anybody that's matching up to more than one of these queries will drop into the first one that they they match with. Now you see drastically different results here by moving around these queries. Now the next thing I wanna show you is how these queries will also these segments rather are here. These segments will also change or based on where they where they are. I actually moved the annual segment here. I accidentally went a little too fast. So I'm gonna move that one. I'm gonna drop it here. So we have our monthly, our annuals, actually the new donors. Sorry about that. Let's go there. Monthly, new donors, and annual donors here. So let's dig into some of these a little bit more. So I've got here my monthly donors that I've expanded, and I can have subsegments within that. So I can have my new monthly donors, which are my new donors in the last twelve months. It's really focused on donors who have given who are new to our monthly giving program. And then I've got my active ones here, and you'll notice the active ones have a catch all. So what we've done is we're just grabbing everything that's not in the previous segment. So within within my monthly pool of twenty one sixty six, I'm grabbing my new monthly donors and then everything else is falling into my active monthly donors. So this is a nice way to group things and use very, very simple logic to be able to visualize the audience as well. So we're looking to provide a lot of clarity and confidence this way by making it so that there's an easy interface for the campaign folks who have the goal and the strategy in mind and the data folks who are maybe the ones executing the strategies and the segmentations to get together on a common interface and have the same understanding of what's being segmented and how. So very simple naming conventions, very simple queries, and that you can add and combine together. So this concept allows us to, allows you rather to build out these complex segmentations without adding overall complexity.

So imagine in that busy town square, if I'm there screaming with a megaphone, and instead of the megaphone, I pick you out in the crowd and say, hey. You remember remember me? We did this thing with, you know, your friend Jimmy last year that that ran or or did a went on a bike ride and you supported them and and we did something amazing together and you can build on that conversation. Now all of sudden, you have that attention to that person. As humans, we've become very, very good at filtering. We're bombarded with spam on our phones, on our emails every day, and we can recognize very instinctively and very quickly messages that are personalized that are for us and those that aren't. And those that aren't are are often sometimes even threats. Right? We've got a lot of phishing scams and things like that. So we've we're naturally filtering messages out. So personalizing that message, connecting, that's the way to cut through and pierce through that noisy, noisy town square. And statistics back this up. If we jump into the for profit world for a second here, we look at some stats that show us that seventy two percent of consumers will engage exclusively with messages that are tailored to their specific interests. And this is a pattern also or or an expectation that's been developed and fed by the large companies like Amazon and Netflix and Spotify. They've all set a new standard. They they do send very, very personalized content. You like this? You might like that. So our donors are also consumers, and they expect any organization to communicate with them in this fashion. Very personalized content. That's really how to cut through the noise.

Well, their statistics show that multichannel donors are actually worth double. So the stat on the left shows that we have a two times higher revenue for online donors when we communicate on multiple channels versus communicating online only. So all those online donors communicating online and offline, though the value of those donors goes two x. And on the flip side, for your offline donors, for which obviously you have an email as well, there's a ninety percent increase. So very close to two x as well versus offline only only. So donors that use, you know, send an email or direct mail to, if you also back that with an email, you statistics show a ninety percent increase in value for those. So multichannels worth twice as much. And there's a few reasons for that. One of them is just being able to reach them. And so if the average email open rate in the industry is twenty nine percent and the average direct mail open rate, and this one's a little trickier to to kind of measure, but estimates are between thirty five and ninety percent. And so if you if you think about combining these, then you increase basically your chances of reaching those donors. A donor might open an email, but not get the direct mail or vice versa, get direct mail, but their email lands in spam. You increase the chances of actually reaching them at least once. And further than that, you give them more reminder, repetition. We all know repetition is a very good marketing strategy. And so the person might get the email, not react right away, or and then get the piece of mail and then react or vice versa.

New donors represent a massive opportunity, but also a massive challenge. What does the math tell us? And this again, it's the fundraising effectiveness project. That's this is the September 2 0 2 5 edition. So the new donor represents a very large portion of the typical database, around thirty eight percent. So in a in a given year, thirty eight percent of donors could be are new donors, and the retention rate on those new donors is actually fourteen percent. So that means that only fourteen percent of those new donors will actually make a second gift. Here's the problem, most new donors didn't give to you, they gave to a friend. Well, the majority of times the actual donor or the new donor didn't actually give to your organization, they actually gave to their friend. Now let's talk about your most valuable segment, repeat donors. That was a recap, that was looking at some of the acquisition donors or the new donors. Now, if we jump into, we move ahead, we're into the repeat donors, so these are kind of your loyal donors and the ones I give every year, that should represent about forty percent of your donor base. Average retention rates on this is somewhere around the forty three percent retention rates, and it's one tenth of the cost. Remember I said it was ten times the cost. So this is one tenth of the cost of acquisition. So retaining a donor costs you one tenth. Very important that you want to retain as many of those donors as you can. Don't leave revenue on the table. Let your donors decide if they want to give. Don't decide for them. Guarantee you someone else is going to get a donation from them. So, you know, short of of doing a hard ask, you can do a softer ask, more of an information, leave it open. But withholding an ask is not being steward it's not stewardship. It's actually leaving revenue on the table. Finally, recaptured donors, the toughest segment with a sobering reality. But we know that a donor who hasn't given in the last two years, they are ninety eight percent likely never to give again. This you're gonna see it as two percent in the few slides. So ninety eight percent of those donors who haven't given in the last two years are likely never to give again. They make up thirteen percent of your base with just a two percent recapture rate. Being selective is critical. Ready to implement these strategies? AmpliPhi.app makes it easy to segment your donors and prepare smarter campaigns that raise more money.