How to use data to target donors

Segmenting your database

One of the key functions of a CRM system is its ability to segment your database of donors and potential donors. Segmenting means identifying a particular group based on one or more types of data.

For example, if you decide to embark on an initiative to convert first-time donors into repeat donors then you can segment your database using donation frequency data to identify all the people in your database that have made a donation once and once only. This group can then be contacted with a message designed specifically to persuade them to become repeat donors – perhaps by suggesting that they set up a direct debit payment to your charity.

Another way to segment your database is by donation amount. You could decide to identify repeat donors who make donations of less than £25 and then contact them with a message which seeks to move them up the donation ladder to a £25 donation. Then you could identify £25-£40 donors and look to move them up the donation ladder to become £50 donors, and so on.

Yet another way you can use segmentation is by donation frequency. For example, you could identify all donors who give regularly once per year and encourage them to increase that to twice or three times per year.

Combine analysis with segmentation

The key to choosing how to segment your database is sometimes in the data analysis. For example, if you decide you want to increase the number of large donations over £1000, you could use your CRM system to analyse existing £1000 donors. This could reveal that they are typically over 50, donate only once a year, and only like to be contacted by mail.

The next step might be to segment your database to identify all the over 50s who donate once per year and who donate between £500 and £1000, and target them with a letter asking for a £1000 donation.

What data should you collect and how do you collect it?

Most of the data segmentation exercises above rely on RFM data, but there are many other types of data that are also useful for charity fundraisers. When it comes to data optimisation, the more types of data you have about potential donors the more unexpected insights you can draw from it. But in practice, you are constrained in how much data you can gather because there is a limit to how much people are willing to reveal about themselves.

Good places to collect data include:

• On a donation form When donors give they expect to provide basic information such as their name, address, email address and phone number. But you can also add a small number of extra questions which they are unlikely to object to. A good practice is to keep the questions simple so that they can tick "yes" or "no" rather than having to write long answers – which is impractical if they are using a mobile device

Data that could be collected here includes age, preferred future communication method and frequency, and whether the donor would be interested in making regular donations.

• On a post-donation web page After making an online donation, a "thank you" page is a good place to ask donors a few more questions - such as whether they would be interested in hearing about specific projects or whether they would like to volunteer or to help with future fundraising efforts.
  
  
• Shortly after a donation The period when a donor’s contact with your charity is still fresh in their mind is a good time to follow up with a short survey which can be used to collect more valuable data. The survey can be posted, emailed, or sent out by text message, depending on their previously expressed contact preferences. It can ask for specific information such as age or income bracket, or more general information such as the reason for their interest in your charity, other charities they support, or any other information that you think could be useful for future data segmentation exercises.

A survey also provides a good opportunity to ask for feedback about your charity with questions such as "Would you like to hear from us more frequently or less frequently."