How segmentation can improve the effectiveness and efficiency of member marketing for nonprofit organisations

1. Banish Email Overload – how
segmentation can improve response,
retention and reputation
Steve Thomas
7th October 2014

2. What is Segmentation?
• Classification of the population into
subgroups such that the subgroups are:
– Distinguishable
– Identifiable
– Manageable
– Fit for purpose

3. Why Segment?
• Appreciation of motivations
– Communication
– Tone of voice
– Increased returns
• Facilitates Different Marketing Strategies
– Product segmentation
• Identification of ‘look alikes’
– Individual
– Area

4. One size doesn’t fit all

5. How to segment?
Recency
Frequency
Value

6. Recency
Creating segments
Frequency
Value

7. Creating segments
9
8
4
3 1
6
2
7
Recency
Frequency
Value

8. Profiling

10. Look alike logic
Universe
Your Database
Your Sector
Membership

11. Profile variables
• Income
• Housing Tenure
• Spending Power
• Education
• Occupation
• Social Grade
• Age
• Children
• Household Size
• Property Type
• Urbanicity
• Retail Accessibility

12. Example profiles - Age
TotalSketch Attributes
Supporters Regional Base Penetration Index
Counts % Counts % % 0 100 200
Age – Example 1
Rank 91-100 (High) 933 16.8% 23092 11.2% 4.04 150 █████
Rank 81-90 1012 18.2% 19816 9.6% 5.11 190 █████████
Rank 71-80 852 15.3% 20846 10.1% 4.09 152 █████
Rank 61-70 697 12.5% 20417 9.9% 3.41 127 ███
Rank 51-60 643 11.6% 23081 11.2% 2.79 104
Rank 41-50 459 8.3% 22491 10.9% 2.04 76 ██
Rank 31-40 316 5.7% 22152 10.7% 1.43 53 █████
Rank 21-30 202 3.6% 17995 8.7% 1.12 42 ██████
Rank 11-20 201 3.6% 19192 9.3% 1.05 39 ██████
Rank 1-10 (Low) 245 4.4% 17650 8.5% 1.39 52 █████
TOTAL 5560 206732 2.69
Age – Example 2
Rank 91-100 (High) 601 14.5% 23382 11.1% 2.57 130 ███
Rank 81-90 662 15.9% 21810 10.4% 3.04 154 █████
Rank 71-80 465 11.2% 18343 8.7% 2.54 128 ███
Rank 61-70 557 13.4% 23014 10.9% 2.42 123 ██
Rank 51-60 493 11.9% 22896 10.9% 2.15 109 █
Rank 41-50 375 9.0% 20015 9.5% 1.87 95 █
Rank 31-40 387 9.3% 22721 10.8% 1.70 86 █
Rank 21-30 270 6.5% 22811 10.8% 1.18 60 ████
Rank 11-20 171 4.1% 17574 8.4% 0.97 49 █████
Rank 1-10 (Low) 174 4.2% 17887 8.5% 0.97 49 █████
TOTAL 4155 210453 1.97
Age – Example 3
Rank 91-100 (High) 20 2.3% 10642 8.7% 0.19 27 ███████
Rank 81-90 14 1.6% 11145 9.1% 0.13 18 ████████
Rank 71-80 37 4.3% 10021 8.2% 0.37 53 █████
Rank 61-70 133 15.6% 12234 10.0% 1.09 156 ██████
Rank 51-60 144 16.9% 12409 10.1% 1.16 167 ███████
Rank 41-50 124 14.5% 11515 9.4% 1.08 155 █████
Rank 31-40 139 16.3% 14290 11.6% 0.97 140 ████
Rank 21-30 94 11.0% 14826 12.1% 0.63 91 █
Rank 11-20 69 8.1% 12608 10.3% 0.55 79 ██
Rank 1-10 (Low) 80 9.4% 13232 10.8% 0.60 87 █
TOTAL 854 122922 Sample

13. Comparative profile - Education
TotalSketch Attributes Members Regional Base Penetration Index
Counts % Counts % % 0 100 200
Education – Group A
Rank 91-100 (High) 1574 28.3% 43382 21.0% 3.63 135 ███
Rank 81-90 1369 24.6% 43322 21.0% 3.16 117 ██
Rank 71-80 871 15.7% 30229 14.6% 2.88 107 █
Rank 61-70 550 9.9% 23148 11.2% 2.38 88 █
Rank 51-60 337 6.1% 17701 8.6% 1.90 71 ███
Rank 41-50 333 6.0% 15203 7.4% 2.19 81 ██
Rank 31-40 240 4.3% 14452 7.0% 1.66 62 ████
Rank 21-30 194 3.5% 13006 6.3% 1.49 55 ████
Rank 11-20 60 1.1% 4479 2.2% 1.34 50 █████
Rank 1-10 (Low) 32 0.6% 1810 0.9% 1.77 66 ███
TOTAL 5560
20673
2 2.69
Education – Group B
Rank 91-100 (High) 219 5.3% 24697 11.7% 0.89 45 ██████
Rank 81-90 805 19.4% 51462 24.5% 1.56 79 ██
Rank 71-80 778 18.7% 36515 17.4% 2.13 108 █
Rank 61-70 656 15.8% 25427 12.1% 2.58 131 ███
Rank 51-60 499 12.0% 19525 9.3% 2.56 129 ███
Rank 41-50 444 10.7% 18293 8.7% 2.43 123 ██
Rank 31-40 444 10.7% 17905 8.5% 2.48 126 ███
Rank 21-30 244 5.9% 10397 4.9% 2.35 119 ██
Rank 11-20 52 1.3% 4788 2.3% 1.09 55 ████
Rank 1-10 (Low) 14 0.3% 1444 0.7% 0.97 49 █████
TOTAL 4155
21045
3 1.97
Education – Group C
Rank 91-100 (High) 39 4.6% 6970 5.7% 0.56 81 ██
Rank 81-90 110 12.9% 21007 17.1% 0.52 75 ██
Rank 71-80 119 13.9% 17795 14.5% 0.67 96
Rank 61-70 120 14.1% 13430 10.9% 0.89 129 ███
Rank 51-60 94 11.0% 12150 9.9% 0.77 111 █
Rank 41-50 88 10.3% 10279 8.4% 0.86 123 ██
Rank 31-40 103 12.1% 12694 10.3% 0.81 117 ██
Rank 21-30 61 7.1% 9076 7.4% 0.67 97
Rank 11-20 65 7.6% 10093 8.2% 0.64 93 █
Rank 1-10 (Low) 55 6.4% 9428 7.7% 0.58 84 ██
TOTAL 854
12292
2 Sample

14. TotalSketch Model
Best fit model
Members Base Penetration Z-Score Index
Counts % Counts % % 0 100 200
Segm
ents
Segment 6 997 9.4 18688 1.8 5.3 5.33 510 ██████████ >200
Segment 11 1221 11.5 30654 3.0 4.0 3.98 381 ██████████ >200
Segment 2 420 3.9 13293 1.3 3.2 3.16 302 ██████████ >200
Segment 7 653 6.1 22626 2.2 2.9 2.89 276 ██████████ >200
Segment 15 903 8.5 35231 3.5 2.6 2.56 245 ██████████ >200
Segment 3 363 3.4 14471 1.4 2.5 2.51 240 ██████████ >200
Segment 14 784 7.4 33303 3.3 2.4 2.35 225 ██████████ >200
Segment 9 884 8.3 51180 5.0 1.7 1.73 165 ███████
Segment 10 185 1.7 12422 1.2 1.5 1.49 142 ████
Segment 1 616 5.8 42881 4.2 1.4 1.44 137 ████
Segment 13 291 2.7 23724 2.3 1.2 1.23 117 ██
Segment 4 729 6.8 64449 6.3 1.1 1.13 108 █
Segment 8 1051 9.9 111886 11.0 0.9 0.94 90 █
Segment 0 1273 12.0 266869 26.2 0.5 0.48 46 █████
Segment 5 262 2.5 94111 9.2 0.3 0.28 27 ███████
Segment 12 117 1.1 181701 17.9 0.1 0.06 6 █████████
Total 10643 1,017,489 1.05

15. Where are they?
New areas may have a
different socio-dem.
profile to the existing
donorbase
Different motivations
require different
communication strategies
Missing all the towns!

16. Implications for marketing
– Support activity for the current profile
• Post Code initiatives
• More effective targeting
– Promote to new audiences
• Different ways to reach members
• May require new approaches & materials
– Message by prospect type
– Product development
– Regeneration

17. Segmentation by analysing
behaviour

18. The King’s Fund
• Charity established in 1897 with the aim of
helping London’s voluntary hospitals.
Today its mission has developed to:
• ‘…the promotion of health and the
alleviation of sickness for the benefit of the
public by working with and for healthcare
organisations…’

20. What do they do?
• Provide guidance and information :
– Produce reports
– Online resource including extensive library
– Events
– Developing
• Influencing policy makers
– Parliamentary and stakeholder engagement
• Generate additional income
– Venue hire

21. Background
• C. 30k active records held on Integra
• Email is the key direct media to audience
• Key information:
– Job title
– Organisation
– Most purchase behaviour
– Email preferences

22. Marketing issues
• Perception that email is
‘free’ and easy
• Assuming what people
initially signed up to is
what they really want
• Lack of confidence as to
understanding the
engagement level of
audience

23. The Challenge
• The targeting had been intuitive to an
extent
• There was no way to assess performance of
customers
• Dependent on email but were we getting the
targeting right?
• Potential that some people getting too
much, others too little or very inconsistent
communications
• Unsubscribing and blacklisting

24. The solution
Categorisation of
behaviour into 3
dimensions:
• Recency
• Engagement
• Quality

25. The solution – segmentation criteria
• Recency – how long since latest activity?
– 1 month; 3 months; 6months
• Engagement – ‘richness’ of activity
– Email opens; clicks; subscriptions; events;
• Quality – ‘ladder’ of known indicators
– job title; key event attendance; influence

26. The solution – 8 segments

27. The solution – a customer
journey
super close
7 on holiday
7 on sabbatical
keen but stuck
activists
first biters
Segment 2
Potentials
Zeros Segment 1
Segment 4
Segment 3
Segment 6
Segment 5
Segment 7
6649
2213
3111
3976
3301
3511
8845
7250
Segment 0

28. The solution – understanding shifting
Probabilities of being present in each segment next month
depending on presence this month
7 0.1 0.6 1.1 2.1 3.3 9.4 11.7 89.9
6 80 6.7
5 86.1 5.9 3.4
4 0 96.7 4.5 2.4
3 0.4 0.4 2.3 93.6
2 0.1 2.4 90.8 2.1
1 96.6 5.7 2
0 99.4 0.2
0 1 2 3 4 5 6 7

29. The solution – moves and blocks
super close
7 on holiday
7 on sabbatical
keen but stuck
activists
first biters
Segment 2
Potentials
Zeros Segment 1
Segment 4
Segment 3
Segment 6
Segment 5
Segment 7
6649
2213
3111
3976
3301
3511
8845
7250
Segment 0

30. The Benefits
Targeting:
• Make targeting more appropriate to audience
• Avoid scattergun
• Protect against unnecessary unsubscribe
• Makes internal expectations realistic
Reporting
• Health checks –
– Really know theaudience
– are the amount of ‘good’ people growing
– Gaining warning signs of decline in quality
– Have confidence when audience ‘healthy

31. Implications for marketing strategy
1. Reaching out to new, lapsing and
previously undeveloped contacts
2. Making better use of communications
spend and achieving better relationships
3. New ways to achieve better results
4. Enriching relationships with key influencers

32. Banish Email Overload – how
segmentation can improve response,
retention and reputation
Any Questions?
www.purple-vision.com
steve.thomas@purple-vision.com