Why You Need a Data-Informed Donor Acquisition Strategy

It takes a lot of time and effort to acquire new donors for your nonprofit. You not only need to create compelling marketing content that tells your organization’s story, but you also have to get those materials in front of the right audience, form connections with prospects, and encourage them to give.

Leveraging data throughout each of these steps can make all the difference in your chances of success.

If you’re struggling to acquire the donors your organization needs, take a deep dive into your nonprofit’s data. We’ll explore a few reasons why it’s so important to infuse data into your donor acquisition strategy and give you tips on how to start doing so.

Donor Data Helps You Target the Right Prospects

Before you can acquire new donors, you need to establish your target audience and what marketing strategies are likely to appeal to them. After all, even the best marketing campaigns will fall flat if you don’t get them in front of the right people.

The best way to determine who makes up your target audience is to look at your existing donor data. Comb through the profiles in your donor database to discover donors’:

• Average gift sizes. Determining your nonprofit’s average gift size will help you clearly define your organization’s giving levels and clarify which prospects would classify as potential minor, mid-level, and major donors.
  
• Shared interests. Identify the programs and fundraising campaigns certain groups of donors have been most interested in. For instance, do local donors give more to coastal wildlife preservation campaigns while those who live further away prefer more generalized sustainability programs?
  
• Key demographics. Pay attention to the age groups, locations, and job sectors that appear most frequently in your donor data. This information can help you target similar prospects who may be interested in giving for the first time.
  
• Engagement habits. Do donors engage most with your nonprofit via direct mail or on social media? Do you have an especially active volunteer base, or do your donors give more often when they can apply a matching gift to their original contribution?
  

Not too many years ago, nonprofits would use this information to search for rental or exchange lists that seemed to align with their target audience. Today, you still can take this approach, but artificial intelligence has made it possible to find prospective donors more quickly through cooperative databases. Either way, use the data you’ve collected to ensure that any new prospects you locate align with your target audience.

Marketing Data Shows You What Strategies Work Best

Once you understand what kind of prospective donors you’re looking for, zero in on how to reach them by analyzing your nonprofit’s marketing data. Specifically, look into the following metrics from past campaigns:

• Per-Channel Conversion Rates: Conversion rates for each of your marketing channels show you what content inspires people to follow through and take a desired action, like donating. To find the conversion rate of a specific direct mail appeal or email, divide the number of people who donated or registered for an event by the total number of recipients.
  
• Return on Investment (ROI): How much did you earn in donations from your past marketing campaigns? Compare the amount of money you spent on the campaign to total donation revenue to find out how much your marketing efforts are ultimately boosting your fundraising results. If a specific campaign had a low ROI, investigate further to find out potential reasons why.

With this information, you can tailor your approach to donor acquisition based on the most effective marketing channels and strategies. For example, if you find that single-page direct mail appeals have the highest conversion rates, your team can focus their efforts on crafting the perfect appeal letter rather than spending too much time on social media content.

The right marketing tools and platforms can help you easily find and interpret this data. Reporting dashboards within your CRM or email automation tool, for example, can quickly show you the response rates of multiple messages or campaigns for comparison.

Fundraising Data Helps You Measure Your Success

Finally, consistently monitoring and analyzing data from your fundraising campaigns ensures that you can gauge your donor acquisition strategy’s success and make improvements for the future, even if you’re not undergoing a formal fundraising assessment.

Meyer Partners’ nonprofit analytics guide explains that analyzing your donor acquisition rate, retention rate, and donor lifetime value can give you a clearer picture of your nonprofit’s financial sustainability and capacity for growth. This data shows you how successful your acquisition efforts have been so far and where you may need to pay more attention. For instance, if your retention rate is particularly low, this is an indication that you should put more effort into donor stewardship.

Additionally, analyzing your nonprofit’s cost to acquire shows you how cost-effective your donor acquisition strategy is, giving you the chance to re-budget if necessary. To find out your cost to acquire, use the following formula:

How to Infuse Data into Your Strategy

Now that you understand why you need a data-informed acquisition strategy, it’s time to put the pieces together and incorporate data into your plans.

To get started, make sure you’re collecting the right data and take any necessary steps to improve your nonprofit’s data collection and management practices. Then, follow these basic tips to incorporate data in your acquisition strategy:

1. Segment donor profiles based on shared characteristics within your existing donor data.
2. Establish marketing key performance indicators (KPIs) and regularly monitor them.
3. Use the results of previous fundraising campaigns to guide your acquisition strategy.
4. Adjust your approach to donor acquisition based on success metrics like donor acquisition rate and cost to acquire.

For more help, partner with a nonprofit marketing agency that has experience using data to help nonprofits acquire more donors. These experts can perform complex data analysis like predictive modeling to help you identify the prospects who are most likely to give and learn the best times to ask for donations.

Your nonprofit’s data is highly valuable, so don’t miss out on strategically leveraging it to increase your donor acquisition rate. However, remember that all of these benefits hinge on your data being clean, up-to-date, and accurate, so make sure to practice good data hygiene and audit your data periodically. That way, you’ll ensure that your data-driven decisions are based on relevant information.

Written By Bonnie Meyer | Meyer Partners

Bonnie brings to her role at Meyer Partners more than 30 years of fundraising experience, with a special emphasis in multimedia approaches to new donor acquisition and development. Her expertise encompasses several facets of direct response fundraising, including copywriting and creative direction, market research, strategic planning, and comprehensive results analysis.