This is another very trendy buzzword (or phrase), one we admittedly use on occasion.   It is, like most buzz words, grossly over and misused.  This is one of those terms that is easier to define by starting with the anti-definitions – i.e. what it is not.

But, before we jump into that list of “what it ain’t” it is worth talking about why we should care or take time to define, identify and use life- stage for marketing or at least, planning purposes.

The term is really borrowed from (or at least it’s origins can be tracked to) the world of product management, a field that when done right, is far more science than art.  There are typically four, high level product life stages or cycles – introduction, growth, maturity, decline – that typically dictate differences in the marketing mix (product, placement, price, promotion).  For example, the “promotion” in the introduction stage is geared towards innovators or early adopters and shifts to product differentiation (as competition grows) in the maturity stage.

To apply this thinking to donors or constituents we must think about treating them differently as they progress through various stages of the relationship with the organization.  That sounds a lot like market segmentation, which it is.  So, just like segmentation, the reason for marketing to lifecycle is because we believe the different lifecycles require different marketing and service level treatment to get maximum yield.  Said more simply, we can make more money by treating people differently based on the stage (and strength) of their relationship to the business because the needs and preferences differ.

Ok, now back to where we started, what isn’t a lifecycle or lifestage?  It is not,

• Tenure or years on file.  This presumes that people move in lockstep through their relationship with an organization based on the 12 month calendar – not the case, at all.  It also means that people can’t move from one lifestage to another until another 12 months transpires – this is artificial at best.  This does not mean there is often some correlation between say relationship stages and time on file.  But, the oft repeated statistical factoid applies here – correlation is not causation.  Time on file may be one way to partially find a real, lifestage based segment but it is does not define it.

• Constituent type.  It is true that certain constituent types require (and expect) different treatment – think advocates versus donors versus volunteers.   But, there is no sequential, logical, temporal progression from one constituent type to another.  Folks can stay in one constituent type forever and be of good and increasing value to an organization.  Furthermore, we’ve found in our work measuring Commitment that there is often not much, or not enough variance by constituent type on measure of relationship strength and stage.

• RFM segments.  It is true that many donors progress in value over time but there are as many exceptions to this rule as adherents to it.  More importantly, creating a strategic lifecycle or stage based marketing program on outcome variables is the definition of circular thinking – we want people to move up in giving so we define lifecycle by giving levels.  This tends to result in marketing by brute force, using number of appeals as the way to drive greater value.

• Giving pyramid. This is the visual we’ve all seen countless times with regular DM donors on the bottom and the largest part of the pyramid followed by ever smaller trapezoidal cuts of the pyramid to reflect mid-level, major donor, planned gift or some variation thereof.   Many have correctly commented that most files look more like an hourglass than a pyramid but regardless, this too is a flawed way to think about marketing or lifestage segments.  This pyramid view suggests a progression that is – much like constituent type – as wrong as it is right.

All four of these are flawed and all three are used regularly when folks talk about lifestage.

A different, better approach (or at least rules to consider):

1)      Don’t mistake or confuse a donor’s stages of THEIR life (i.e. age) with their “life”, or said better, relationship, with your organization.  There is very little correlation between age and strength of relationship, which means strong relationships do NOT require someone to get old while doing it.

2)      Don’t define lifestage by demographics.

3)      Don’t define lifestage by financial transaction values.

4)      Do define lifestage by a deep understanding of the steps required to progress from a “new on the file” to strong, committed relationship with the organization.

5)      Do recognize that there are many paths (and steps) that one can take to achieve a strong, committed relationship to the organization.  For some, these steps can all occur with that person staying within one constituent type, RFM bucket or part of the giving pyramid for their entire “life” with you.

6)       Do define lifestage based on what the constituent experiences and derives from your organization – this is decidedly not their RFM bucket, constituent type, time on file or status on the giving pyramid.