Making segmentation work for your charity

Financial pressures and media criticism are, now more than ever, forcing charities to ensure their services and fundraising activities are as effective as possible.

Key to an effective activity is effective targeting – the right message, service or fundraising product to the right person at the right time – and central to effective targeting is effective segmentation: recognising that there are different audience groups in the market or on your database, each of which requires a different strategy to cost-effectively engage them with your organisation.

Investing in a segmentation of your market or supporters recognises that “one size doesn’t fit all” and that the “spray and pray” approach (producing un-targeted, “mass” marketing activities whilst crossing your fingers enough people will respond) is inherently wasteful. A good segmentation model enables you to understand your audiences better, leading to focussed, relevant communications, increased engagement, and reduced cost.

It can also help to identify opportunities to increase impact. One segmentation I worked on for a health charity revealed a sizeable group of “frustrated sufferers” who were not accessing the charity’s services due to psychological barriers such as low confidence and low expectations. This finding lead to internal service re-design, stakeholder engagement, and communication initiatives to ensure the charity was as easy and reassuring to contact as possible to engage that segment.

The benefits are clear – but often charities spend money developing market or supporter segmentation models that don’t realise these benefits. They remain abstract and unusable. Here are some considerations for ensuring a segmentation model can be successfully applied to increase the effectiveness of your organisation.

1. Be clear on what you want to do with the segmentation at the outset – the model has to have a clear purpose, for example to define supporter journeys, to help recruit new supporters, or to develop new service offerings.
2. Ensure the organisation is committed to doing things differently. Segmentation puts your audiences at the centre of your planning and enables you to understand them and promote what works best for them. However, many charities operate a “product-led” strategy – with different teams promoting their product (either a fundraising product or a service) often to the same audiences, regardless of what segment they are in. A segmented, audience-led approach requires a commitment to move from a product-focussed, silo-ed structure and culture in order to be really effective.
3. Internal communication is vital – for at least two reasons. Firstly, colleagues may know of data, for example previous research, that can help define the segments. Secondly, to pre-empt and address some objections that can be raised by others – such as perceptions of inequality (“we have to be here for everyone, not just a select few”) or stereotyping.
4. Be comfortable with prioritisation. Segmentation recognises that different approaches are required for different segments. However, many organisations do not have the resources to develop tailored approaches for every segment – therefore, some prioritisation is needed. This can be a challenging process as different factors are at play – for example should the segment that can make the most impact but may be harder to engage be prioritised over the one that can make less of an impact but is easier to engage? There are no right or wrong answers, instead organisations need to come to a consensus of opinion.
5. Use a number of relevant variables. There are different groupings of variables that can be used to create a segmentation – and the more that can be used the better the model will be (i.e. the more rounded the understanding of the different segments will be). Behavioural and geo-demographic variables are common, but segmentation models become most useful when attitudinal, motivational and lifestyle variables are also included.

Fiveways has experience of developing segmentation models across a number of issues that have allowed clients to increase their impact by focussing their resources and efforts on clearly defined target audiences.

For more information on how segmentation can support your charity to target your fundraising, communications or services more effectively, please email Richard on or call him on 07970 760945.