Retention Segmentation Works
Question: When is a lost donor an unnecessary waste?
Answer: When the loss could have been prevented with better use of donor data.
CBA has proven through numerous tests and campaigns that reminding customers how they came to donate, when they last donated, and how much they contributed, can dramatically improve renewal results. This form of segmentation, which uses data such as donor’s prior giving history, demographics, and source, is particularly powerful when used in all channels to appeal to both offline and online donors.
In a newly created direct-mail renewal series for a major-market public TV and radio station, copy referred to whether the member last responded during an on-air pledge drive, or to a phone call or direct mail solicitation. The series will be followed up with a four-part email series, which will use segmentation in a similar way.
The keys to the program’s success lie in the ability of the stations to segment their member base according to:
- Source. If someone joined the station initially in response to an on-air fund drive, the copy can reflect the program they were watching “when they called in.” Donors obtained through direct mail receive special copy. And individuals sourced through telemarketing receive copy that refers to the last “pleasant conversation we had."
- Giving Amount. The gift ladder includes both options to repeat the “Last Gift” and to upgrade at a higher level.
Such segmentation can be practiced by any organization, of course. An effective segmented renewal series should be written and designed as a complete campaign, with each mail effort building the case for renewing and increasing in urgency. Copy should clearly present the ways that the organization will use the donor’s gift. The length of the series will depend on the response of the last effort in the series. A good rule of thumb is to keep mailing until it costs more to retain a member than to acquire a new one.
According to a report by David Shepard Associates, 71% of large commercial companies and 40% of smaller firms use some type of segmentation system. Of those, about half rely on costly segmentation models. The rest go by a certain amount of intuition and experience.
Retention is a critical issue for non-profits, faced as they are with ever-increasing competition for a limited pool of donor dollars.
We’d like to hear more from you, our Test Patterns readers, about your interest or experience with retaining donors through segmented retention campaigns. Send us mail.
