Needs-based donor segmentation

Author: McKinsey on Society on 28 April 2011 | 1 Comments

Tags: segmentation, communications

We've all been guilty of it at some point: in soliciting participation and fundraising for our event, we rely on a single communications approach, casting as wide a net as we can, seeking to win “everyone” to our cause. Deep down, we know the truth: this one-size-fits-all approach may be simple to execute, but it wastes marketing dollars, misses opportunities, and generally results in poor alignment between what an organization needs and the kinds of support it gets.

In some cases, we use one or two demographic or behavioral criteria such as age, education level, or annual donation amount to tailor our outreach. But none of these approaches gets at the public’s attitudes and motivations—why they behave as they do when it comes to supporting social issues. And understanding the why is critical in tailoring communications and shaping messages that will resonate with current and potential supporters.

Recent research by McKinsey [PDF] is shedding new light on this: it shows that people who get involved in social issues differentiate most strongly based on their needs and attitudes, not demographics or behaviors. 

In the commercial world, many leading consumer-product companies use a technique called needs-based segmentation to develop a more nuanced view of why consumers behave the way they do. The technique helps companies generate insights into the needs, motivations, and attitudes of consumers; classify people into distinct segments based on these insights; and tailor marketing and communications strategies to specific target segments accordingly. 

Nonprofits, too, can use a particular kind of needs-based segmentation to better identify and communicate with their target audiences.  Through a yearlong research effort focused on Americans who support at least one major social issue, we found that people who share certain needs and attitudes—for example, individuals who strongly agree with the statements “I need to see tangible results” and “I concentrate my energy on my local community first”—are more similar to each other when it comes to how they engage in social issues than people in the same demographic group.

McKinsey identified seven distinct needs-based segments among Americans who support at least one social cause; the chart below highlights the key differences among the segments.

 

Source: McKinsey on Society: www.mckinseyonociety.com