We have a new free white paper called Death to Buckets, While segmentation buckets are convenient ways about thinking about your donor or acquisition audience, this way of thinking can exclude more effective ways of reaching donors. Here’s an excerpt from the white paper for your reading pleasure:

You’ve probably used the bucket analogy to explain the need for donor acquisition:

  • You have a bucket full of donors.
  • The bucket has holes in it.
  • If you want your water level to rise (i.e., get more revenue), you must fill the bucket faster than water is leaking out.

Simple and easily understood.  But our buckets are very leaky.  Eighty percent of first-time donors won’t become second-time donors within a year.  Almost 40% of multi-year donors won’t give again.  At the current rate, our donor files will be halved in the next decade, on average.  Our buckets have too many holes.

Maybe our donor buckets leak because we insist on putting donors in buckets.

You know the buckets.  Lapsed versus active.  Single versus multi.  Digital versus mail.  $100+ versus under $100.  Generations versus other generations.

Each bucket does a job, trying to pick the things that are most like each other and exclude the things that are most unlike each other.  But they do that job so poorly. 

It’s time to kill the buckets.  It’s time to embrace the genius of the “and”.

Any one data point is a poor predictor.  But all of them together—transactional and consumer and behavioral and historical and demographic etc.—can create a rich model that helps you better acquire, keep, and upgrade donors.  And the human brain can only keep track of so many categories at once; this is best done with algorithms.

Consumer marketers are doing this already to make us buy things.  Only when we get rid of the bucket will we be able to grasp the relevance that makes our buckets less leaky and puts us on a par with those who want to sell things, not impacts.

We’ll talk about the pitfalls that befall us as we work to create a one-on-one relationship with our donors and potential donors.  Then we’ll discuss what an ideal solution looks like in theory.  And, to show that this isn’t just complaining about the current segmentation regime, we’ll talk about how this has been implemented this in both acquisition and donor communications with reaped rewards.

The Challenges of Donor Segmentation

While we’ll address five major segmentation issues here, they are only the tip of the iceberg.  Each of these, and more, make it difficult to segment your donor file accurately, so most donors go through an organization undifferentiated from any other donor.  We’ll talk about each challenge, then discuss a better way forward.

1.    Lack of segmentation begins at the beginning: the cultivation fallacy

We direct marketers think we are superior to mass marketers.  And we are.  They spend their money on Super Bowl ads, billboards, and radio spots that promote alcohol to the 30% of Americans who don’t drink, meat products to the 5% of Americans who are vegetarian or vegan, and political candidates to the 40-60% who thinks that candidate would destroy us all.

And we are superior—that’s all a waste of money—but not by as much as we would like to think.  We do have screening criteria for who comes into our organization, but they are very broad:

  • Outside list acquisition means they donated to a specific organization
  • Traditional co-ops mean they likely donated to several organizations
  • Unattributed digital gifts mean they found you and liked that one offer
  • DRTV means they put their hand in the air to support you

But beyond the self-selection of supporting you and the channel in which they chose to do it, you know little else about that person.  That means that donors come in the door as a largely undifferentiated and undifferentiable mass.

Many are OK with this because they believe in the cultivation fallacy: that continual, consistent communication will turn the members of this horde into satisfied, productive loyal donors.  It does happen, but it’s the exception rather than the rule.  We’re hoping to have happy long-term relationships with donors by having the same first date with donors over and over again…

And over and over and over again.  Everyone gets the standard welcome messaging, even though it could be turning off your loyal donors. Everyone gets the email newsletter and the full diet of emails whether they open them or not.  Everyone is included in the standard renewal campaigns for the first 6, 12, 18, or however many months, regardless of how likely they are to donate.

In doing so, we are Procrustes, the hotelier from hell of Greek myth.  He had a bed where passersby could spend the night.  If they were too short to fit the bed, they would be stretched to fit it; if they were too tall, they would have the “excess” lopped off.  Our introduction to the organization is one-size-fits-no-one: too much for some, too little for others, too generic for everyone. Relationships are fostered through increasing depth, not breadth.  Each communication needs to talk to each donor in a way that speaks to them, not to the mass, lest we become like the aforementioned alcohol, meat, and political merchants who don’t know who is who in their appeals.

So that’s the beginning of the Death to Buckets white paper. Hope you will download and enjoy!

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