Microtargeting vs. Personalization

Microtargeting vs. Personalization

Back in January 2021, JHL posted an article on our blog titled “5 Direct-Mail Success Strategies for 2021.” It was a great read to help get a jump on how to utilize trends in your upcoming direct mail plans, but there was one thing I didn’t understand: “microtargeting.”

I’ve heard the term used before, but I can’t say that I knew what it meant. So I Googled it. According to MNI.com:

Microtargeting is a marketing strategy that uses consumer data and demographics to create audience subsets/segments. It’s possible to predict the buying behavior of these like-minded individuals, and to influence that behavior through hyper-targeted advertising.

That’s some amazing stuff, but how are businesses collecting this data?

  • Have you ever shopped on Amazon? (Who hasn’t?) They know everything you buy and can help their vendors with their advertising strategies.
  • Do you have a Target Red Card? That’s another collection point whether it’s online or in person. (Don’t forget that five percent savings on purchases.)
  • Do you receive coupons from the grocery store with things that you buy regularly? If you use a savings card provided by the store, they link the purchased items your account. (My family makes cinnamon rolls every Sunday for breakfast. Funny how I get coupons for that exact brand every month.)

It’s not just about coupons and advertising. Microtargeting allows stores to look at your purchasing history to help predict other things you may need to purchase in order to maintain your loyalty and business. Let’s say you bought a tent and some sleeping bags. The system might determine that you are a camper. It’s not going to give you a coupon for another tent (why do you need two?), but there may be some other items you would consider, for example: a small grill, flashlights or an air mattress.

Can Microtargeting Work in Advancement

Microtargeting might work well in commerce where shelves are stocked with thousands of product options and brand names made available to fit the needs of any person’s needs or appetite at any time, but could it work in your fundraising efforts?

When one goes grocery shopping, you can spend $100 and have 50 different items in your cart. Each item is generally something that you need.

Alternately, a donor could make a $100 gift to a university (or any non-profit), but they aren’t breaking it down so that 50 different funds get two dollars each. It’s highly probable they are giving to one fund, maybe two. By trying to give a little to everything, the impact of the gift is wasted, the true passion of the donor is lost…and your gift processing team might get a bit flustered.

Depending on its size, many university foundations have hundreds, if not thousands, of different available funds. Advancement offices provide a “shopping list” to the donors of funds where the need is the greatest and create a compelling message to direct gifts to support that effort. The buyer (aka: donor) either goes with that list or something else they wish to support.

Going back to the original question of whether microtargetting could work in advancement, the answer is “maybe.” When it comes to fundraising, we are asking individuals to support what you need – not what they need. It’s not a transaction of goods. It’s a charitable gift that is made by choice. That doesn’t mean that we give up on personalization.

What Are Some Ways We Can Personalize?

The ability to personalize depends on the data you collect and how savvy you are to use the data to your advantage. Starting off your letter with “Dear (fill in the blank)” is pretty common practice nowadays, but what else can be done?

  1. Do you use a reply card, tear off or remittance envelope? How much information could be pre-filled with the data you have to save your donor time filling out forms? If it saves them time, they are less likely to put it off to later…or never.
  2. Many schools provide 1-2 fund options along with the school’s general fund. Perhaps it’s the college they graduated from or a fund that supports their degree program. If you have a lapsed donor who hasn’t given 5 or more years, why not merge the last fund that individual supported as an option to see if giving to that fund would generate a gift again.
  3. Variable text is good, but what about variable imaging? Wouldn’t it be great to have a chemistry major see an image related to their degree, while a biology major sees another? The message might not need to change even if the visual impact does.
  4. Sometimes one sentence is adjusted or a whole paragraph is rewritten to make your letter more direct to each specific audience. These variable text options can be easily merged into each mailing segment, but note that the length of these changes need to be considered to ensure it doesn’t affect the page layout. Let’s look at an example:

Leading up to their 125th anniversary celebration in 2019, the UW-Stevens Point Foundation mailed an appeal targeting six segments. Here is the content written to their non-donor segment:

In honor of UW-Stevens Point’s 125th anniversary in 2019, we’ve compiled a list of “125 Points of Pride.” Each point recognizes a facet of the university that, in some way, is noteworthy, admirable, unique or beloved.

Among our most treasured Points of Pride are the alumni and friends, like you, who support UWSP by giving to the Annual Fund. Gifts to this fund go toward several areas of greatest need, including student scholarships, faculty support, facility maintenance and more.

 Demonstrations of pride are, of course, a matter of personal preference. During this milestone year for UWSP, we hope you will consider making a gift to the Annual Fund as a sign of Pointer Pride.

Our Points of Pride come in many forms. None would be as timely, though, as your gift to the Annual Fund before the university’s 125th year comes to a close. Thank you for keeping UWSP uppermost in your giving plans, as well as in your mind and heart.

Please take note of the highlighted and bolded text above. This part of the content was the only part to change within the following five segments – all of which targeted donors. The variable text for each of those donors segments is below:

Segment #2: Second Ask

You already demonstrated Pointer Pride when you renewed your support of UWSP this year. Please accept our thanks for your generosity and belief in this university. If you would like to make an additional gift to the Annual Fund in 2019, in honor of the university’s 125th anniversary, we’ve provided a personalized gift envelope for you.

Segment #3: 10+ Consecutive Year Donors

You’ve demonstrated that UWSP is a priority in your life by giving generously to the Annual Fund year after year. We are so grateful for your continued support, and hope you will honor the university again with a gift during this milestone year.

Segment #4: First time donor

We are grateful for your first gift to UWSP, given in 2018. A follow-up gift this year, in any amount, would go a long way toward helping the university celebrate its 125th anniversary and continue its mission well into the future—an act that should be a true source of Pointer Pride.

Segment #5: LYBUNT

You demonstrated tremendous Pointer Pride when you made a gift in support of UWSP last year. We are grateful for your generosity, and hope we can count on your support again this year as the university celebrates 125 years of academic excellence.

Segment #6: Lapsed Donors

You’ve demonstrated Pointer Pride by supporting UWSP in the past. We are grateful for your generosity, and hope we can count on your renewed support during this, the university’s quasquicentennial year.

UW-Stevens Point does an excellent job of adapting one paragraph around the rest of the appeal’s content to distinguish a donor’s relationship to the university.

Is Anything Predictable?

I think back to the solicitation pieces and phone calls I’ve received from my alma mater over the years where the first ask is substantially higher than my last gift. Are they rolling the dice hoping that I say “Yes” to that first ask, or do they have data that shows something I don’t know? (FYI: This would be a great time to get into A/B testing, but that is a whole posting on its own. More to come…)

Data is used on our donors to determine their passions and likelihood to support our cause. What is gathered and recorded is based on what is important to know and the amount of time and resources you have to enter into a database. Oftentimes, we are researching the frequency of their gifts, what funds they tend to support, if they are upgrading their gifts and their capacity to support at increased levels. This usually plays a role when identifying or upgrading leadership annual giving and major gifts prospects and donors when it is more likely to involve personal contact.

Much like the weather, nothing is guaranteed. There is no message that will move every person to give. Every school has donors who will give year after year, alumni who will never give and those in the middle who need many reminders and a little prodding. While having data is great, sometimes we can simply look at past messaging and presentation to see what has worked (or didn’t work) to help predict the best way to reach your alumni and donors and give them a reason to support your cause.

In conclusion

It comes down to the size of your shop and the resources you have available. A large number of segments calls for a high level of preparation and scrutiny to make sure each person has been categorized correctly.

It’s also hard to ignore the importance of return on investment. Sometimes the hours needed to take on a large task such as microtargeting can be a drain on already tight resources without the guarantee of a return large enough to make up the difference of time spent in developing your plan.

How data is used to personalize your messaging will always play a role in your solicitation and stewardship plans. JHL can work with you to find new ways to leverage it without breaking the bank. With the right amount of communication and planning, we have the necessary tools to help you drill down your data and get to a level that personalizes your campaigns however you wish.

May 12, 2021 by Dan Krueger

Copyright by JHL Digital Direct. All rights reserved.

Copyright by JHL Digital Direct. All rights reserved.