Have you ever hired a consultant to help you with a project, but when it comes time to execute, they disappear? This happened to Holly when she brought in a consultant to look at her email fundraising program. The consultant told Holly she should improve her segmentation and then disappeared before sharing with her a direction to go. In episode 3 of the Nonprofit Answers Podcast, Jeremy teaches Holly about different ways to segment her email file to maximize response.


Several years ago I was working at a nonprofit, and we made a decision to bring in a consultant to help on a particularly complex web project. We brought this consultant in to make some recommendations, so that we can proceed to execution and get the project done. He did come in. He presented to us. When it came time we decided on the things we wanted to get done, and we asked for his help in executing those items. His response was that he provided advice, but did not help on the execution side. That time I realized that in the future when we hire consultants we should always hire someone that’s got experience executing the advice that they are giving.

The problem, of course, comes when a consultant makes a recommendation but has not actually done that themselves. They don’t have the broad experience to know what works and doesn’t work. That led to this question today from Holly about email segmentation. She brought in a consultant who made some recommendations but did not give them that last mile help of what to actually do. With our limited time, resources, and budget as nonprofits, really we need when we bring in consultants to bring in consultants that have both the broad expertise of having done that work but who can also help us implement because as you know, with limited staff, sometimes it’s hard to bring in a consultant, get a lot of great recommendations and not be able to executive on the things that they recommended. Let’s jump right into this question from Holly.

Hi, Jeremy. Thanks ahead of time for answering my question. I’m the digital specialist at a $5 million nonprofit. We’ve grown a lot in the past two years. We were just under $4 million when I joined we had a consultant come in, and he recommended that we segment our email file when we send e-appeals. He didn’t tell us how to segment it. I know it depends on our donor database, but can you give me some general ideas on how to segment our email sends?

Hi, Holly. First, I want to say congratulations on the massive growth that you’ve had over the last two years going from $4 million in revenue to $5 million at your nonprofit. That’s fabulous. You went through a time where many nonprofits were not growing or were even declining. Being able to grow that much over the last two years is really a testament to your fundraising and what you guys have been able to accomplish. Thanks so much for the question about segmentation. It’s a great topic right now in nonprofit circles especially around personalization and how donors are really looking for a personal experience from your nonprofit. It’s really timely that we, as an industry, as a nonprofit industry, that we’re really digging into how do we properly segment our lists in the digital space, so that we can reach donors with the information that they desire. That’s really the key, is you really need to speak to the heart of the donor, of what they want to support, and how they want to support you as a part of that.

We, for many years, had segmentation down in direct mail. It’s a common practice to segment our direct mail file and to send versions and tests to different segments of people and also to segment the direct mail file, so that you can send mail down as deep as possible and still be profitable. That’s really a driving force behind a lot of what we do, segmenting in direct mail, is what is going to make that direct mail campaign profitable, and how deep can we go in our file, and still maintain profitability? In the digital space because it’s so cheap to appeal to people, it’s often also so easy to just say, “Let’s just send it to everybody.” The ones that it speaks to, great. They’ll give, and the ones that it doesn’t, no worries. They won’t, but it doesn’t cost us really very much to send to 10,000 versus to 100,000 people. We could just go ahead and send to everybody on the file, and then whatever money comes in, great.

What this misses is the great opportunity, which is really expensive in the direct mail space to really hone down and create messaging that is specific to the desires and the heart of your donor. When you do that, when you create a piece that really speaks to the desired heart of the donor and really speaks to them from the perspective of that donor, then you’re really creating something that they connect to and want to support your organization. Even if they don’t give to that particular email campaign, building that relationship and building that trust that they have, that you know them, that you know their desire to give and to support to a nonprofit like yours, building that trust will over time build a much more loyal donor, and put you in top of mind and into that, what we would call, the top three slots of that donor of nonprofits they want to support.

When you’re in the top three slots, they’re going to make a lot of donations to you, and they’re going to have a long lifetime value. You’re going to have a supporter for a long time. That’s really the goal is to use your email to build that relationship, and even if they aren’t giving at that particular time, to really build something that they enjoy receiving, so that when they do decide to give, that they’re still paying attention to your email file, and they haven’t unsubscribed.

In direct mail, it’s obviously easy for someone to throw away that piece of mail, but for them to be removed from the list, it takes action. It takes them to call in and ask to no longer receive your direct mail. Even if they’re not paying attention to it, over time, a lot of times when they support your organization in a given month, they’re going to see that piece of direct mail, and they may give. An email, it’s one click to unsubscribe, and to no longer be involved with your organization, and hear from your organization. There’s a lot of risk in communicating with people as a whole, as an audience without really segmenting your list and personalizing your emails. You’re really risking people clicking on subscribe and getting off your list. Then when you do send and email that they might be interested in, they’re not there to receive it. That’s why we want to segment. Segmentation is the practice of dividing up your list based on certain criteria, so that the message that you said reaches the right person at the right time.

The first thing that we want to do when we decide that we do want to segment is to really analyze what are the goals of the campaign that we’re trying to send out? What are the goals? What are we trying to achieve with that campaign? If it’s a newsletter, the goal may simply be to educate, inform, and show the impact of a donor’s dollar. That would be distinctly different, often times than an email appeal, which is designed to raise money. Now if you’re sending out an email newsletter that is really an email appeal that’s disguised as an email letter, that’s really an email appeal, and we would classify it as such. If you’re sending out a newsletter that is simply a touchpoint showing impact and demonstrating that you appreciate your donors, there may be a slight ask somewhere in there but nothing that’s too strong, that’s a newsletter that really has a distinct purpose.

You may send out other types of communications, and often times they fall into those impact reporting, appealing for money, thinking of donor. Those are often classifications of types of emails. You may also be involved with advocacy and send out emails to advocate people to do certain actions and ask them to advocate on your behalf. There may be opportunities where you send out to volunteers and request for volunteers. There’s a variety of different emails, but what are the goals that you’re trying to achieve? Are you trying to achieve donations? Are you trying to find people to volunteer for a certain event? Are you trying to inform and educate? Are you asking people to advocate on your behalf? What are those goals, and what are you trying to achieve with that email campaign? That really will determine a lot of how you segment your list and who you send different things to or may not send to at all.

Then when you figure out what you are sending and your goals for that, are you able to version that? Do you have time and resources to be able to create multiple versions of that email, so that you can send it to different segments and really speak to them and their heart? There’s a variety of different ways that you can version things. You can version language. One of the things that we learned is that the younger generation right now really values transparency in what you’re doing. An older generation may more value efficiency in what you’re doing. The younger generation wants to see the work and see behind the scenes, and know you as an organization, and know you as a people. An older generation might look at it and go, “How many cents out of every dollar actually goes to the program work in the field?” That’s less important to the younger generation, but both audiences have things that are important to them. That is our examples of ways that you might version content.

If it’s an appeal, and you’re asking for money, you might version the giving matrix. If a general donor who typically gives on average $60 for an appeal, you may send a giving matrix that’s $50, $75, $125. If you’re sending a $50, $75, $125 giving matrix to a mid-level donor who typically gives you $1,000, then you may end up actually hurting your file by presenting options to a mid-level donor who would typically give you $1,000 and go, “Okay, all they need is $75 gift or a $125 gift.” You may want to segment versioning and segment your email based on that giving matrix of the type of donor that you’re sending to. There are a number of things that you can version the email in order to appeal to the audience that’s receiving it.

Then of course that begs the question, what types of segmentation and really answering your question of, what types of segmentation are you going to do? There’s a number of ways that you can slice and divide your list. I’m going to give you some examples here. This isn’t all of them, but this is a lot of ways that at Food for the Hungry that we’ve been able to segment our list and really achieve the goals of our email campaigns. First, is of course giving history. What do they like to give to? How much do they like to give? What frequency do they give? There’s a number of factors there that you can version your emails based on their giving history. It may be that they like to give to a certain type of work that you do. If you’re in the same space I am in Food for the Hungry, then you may have donors that like to give to clean water, or give to food programs, or give to disaster response, or give to anything concerning children, or give to anything concerning people that have been sent from the US out.

There’s a number of ways that we could slice up our file based on things that they give to. Your organization might have a building fund. You might have operational expenses. You might have ongoing programs. You might be able to split out your audience based on the things that appeal to them and their heart for giving to a specific cause. Those are some of the things you can do within giving history. You might also break down to classification of donors. These might be single gift donors, gifts to building fund. They might be disaster. You have monthly or continuity donors. You might have mid, or major donors, or legacy planning donors. Then on your list you might have a number of people who are non-donors. Those are different types of classification donors.

Of course, there’s many other ways that you could slice your donor database into more of a classification of type of donor. Somebody who gives only in times of disasters may not respond to an appeal for a match for clean water at another time of year. You may version your appeal, so that they understand that giving to this clean water campaign will help avert a disaster in this particular community. There’s a number of options there on what you can do with a type of donor that gives to one type of program or service and move them into donating to the email that you are sending out. With impact reporting or thank you emails, obviously, having versions for different types of donors and what they give to is really an effective way to speak to their heart of their passion of what they want to continue supporting.

You may also have volunteers on your list and want to send a specific email, maybe volunteers that have donated or just volunteers who have volunteered at different events within your office, things that you’ve needed done. They may receive a different type of email than somebody who’s a major donor or somebody who has not donated at all. You may also segment your list based on behavior. There’s a number of behaviors that you can track. Certain email systems will track this information for you, so that you can score or tag people on your list based on activity that they’re taking or behavior that they’re taking. They may be website behavior, so have they seen these particular pages on your site? You may send them specific emails based on them visiting pages on your site.

If someone has signed a petition, or advocated on your behalf, they may end up being a particular list that you want to send to. We found, and a lot of organizations have found, that people who have signed petitions or get involved with advocacy have a deep, deep passion for the cause. If you talk to them in a very specific way, then you increase your chance that they’ll support you in other ways beyond just signing petitions or advocating on your behalf. You may have a behavior of downloads. If you offer up e-books or other types of downloads for people, you can track them downloading those things, and tag them, or score them within your email management system, and then send them emails based on those behaviors. As an example, you may create a series of e-books based in different areas of your work. Then if people download a specific e-book about a specific area of your work, then you send emails that are themed to that.

Then finally, you may have some inactives of people who aren’t active on your email file. Often times what we’ll do is we’ll move these people into a funnel that’s designed to save. The funnel is simply a series of email messages that’s designed to reengage these people who are inactives because having too many inactives on your file actually hurts your email file. You want to either activate those people, or move them off your list, and either archive them or delete them completely, if they’re not responding. Often times if it’s someone who has come in through a lead generation program but never given to us and never really engaged with emails in a certain period of time, we will try to reactivate those people. If we’re unable to reactive those people, then we will simply remove them from our list because they are by action showing that they’re not interested in our emails.

Finally, you can also segment your list based on demographics, so things like age. I gave you the example earlier that the younger generation, they really love transparency in your organization. Sending them messages that really show them behind the scenes of your work really have a great impact on them whereas an older generation might prefer to know your efficiency numbers and really have some touching stories about one or more beneficiaries that you guys have been able to support. Those types of things may work for an older generation.

You can also split your list up based on income or net worth. This is often a data append situation where you would go out to an outside provider that’s got that information and then append it, add it to your file. You can provide them the information about who is on your list, and then they’ll tell you what kind of income range, or net worth they have, and what their proclivity for giving to your organization could be. Obviously, if you’re got someone who’s got a capacity of giving well beyond what they have been giving, then you may want to version certain emails to them to see if they want to increase their giving beyond what they have been giving.

There’s a number of other things, but the final one on my list is geographic. You may have volunteer opportunities that you want to send to specific geographic sections of the country, or you may find that in certain geographies people respond differently to different types of appeals. You may segment your list based on geography and known quantity of how people in certain regions around the country or around the world respond to different email messages that you send out. That’s just a few of the ways that you can segment. What I recommend is picking a category of how you’re going to segment and not segment too far down. It really becomes an issue when you have a smaller list.

If you’re creating 10, 15 different segments of types of people that you’re sending to, and you have a small list, then you’re not going to be able to statistically know if that message is really having an impact on that group, if you have only 100 people on a particular list unless it’s something like major donors, and a lot of organizations may only have 100 or less major donors. Really, you want to start out small, segment a couple of different options, and then explore from there what’s working and what’s not working based on the numbers that you’re seeing, based on opens and clicks, donations, other actions, the goals that you set for that campaign. Based on those things, are the segments that you set up working, and are you achieving the goals that you set for those campaigns? If you’re not, then don’t be afraid to change.

Thanks so much again, Holly. Congratulations on what you guys have been doing, the good work that you have done. To go from $4 million to $5 million as a nonprofit, that’s a big leap. It’s really hard when you get from that $1 million to $3 million range, that’s a big jump. Then going from $3,000,000 to $10,000,000 is also a big jump. Doing $4,000,000 to $5,000,000 in less than two years is really at a great pace for where nonprofits are at today. I’m really excited to see for your future what you guys are going to be able to achieve, and where you’re going to take it. Thanks so much, again, Holly for the question, and take care. Thank you for joining us on the Nonprofit Answers podcast. Please take a moment and provide an honest rating and review on iTunes. Your review will help other nonprofit leaders find the fundraising answers they need to help more people. Visit us on the web at nonprofitanswers.org.