Optimizing a non-profit’s marketing approach through insights, segmentation, and cultivation
Situation
A major non-profit organization needed a fresh way to optimize new donor loyalty. Acquisition costs for new donors had reached an all-time high, making it critical to identify and invest in high-potential segments, and then develop marketing plans to turn new donors into long-term supporters of the mission.
Approach
Think big, start small, learn fast. Our challenge was that our client had not been able to “beat the control,” a long-standing, one-size-fits-all fundraising direct mail piece. Orchid Strategy Group’s approach was to apply for-profit marketing techniques to our non-profit client. We began by analyzing first-time donor data, executing a segmentation analysis, reviewing existing market research and conducting needed research, developing value propositions, and creating potential contact strategies (direct mail, email, and social). Via a pilot program, we searched for marketing efficiency through “offer testing,” messaging, and marketing mix optimization. Instead of a mass approach, our goal was to improve response rates segment by segment, donor-by-donor.
Solution
With data mining and market research, we segmented a test group of one million new donors and uncovered why each segment was compelled to donate. We created marketing plans for each of the high-value segments including objectives, strategies, and tactics. Various messaging approaches were explored and tested based on the segment’s compelling reasons to donate. Also, we developed segment-specific models that forecasted future revenue potential allowing for reduced spending against certain donor groups and increased spending for others. Finally, through rigorous testing of the contact strategy, including timing, messaging, look-and-feel, offers, and other various levers, we continually tweaked the marketing elements to arrive at the optimal mix. Our findings were eventually applied to the entire donor base.
Results
This new approach to marketing plans resulted in an understanding of the lifetime donor value by segment, thereby prioritizing marketing investments. The final result was an improvement in repeat donations by 20% versus a control group over a three-year period. At the same time, marketing spend was reallocated by segment but remained flat overall.