E-commerce Link: Divide and Conquer
Segmented, targeted emails can improve results up to nine times, according to Jupiter Research. As a marketer, you want to be more relevant to your customers, and segmentation should allow you to speak more directly to them, make them feel unique and enhance relevance. For marketers who are seeing stagnant or declining results, segmentation will definitely help. If you don't have a segmentation strategy, you're leaving money on the table. Let's look at five approaches to segmentation.
1. Preference Center
The first place to look when working on a segmentation strategy is the information provided or updated within a preference center. The preference center is a valuable resource to use to successfully segment your customer base. For example, IKEA asks what rooms a new email signup are most interested in receiving information about. Some e-tailers allow their subscribers to decide whether they want to get messages about sales and clearance offers or new product and service offerings, while e-newsletter publishers often ask for content preferences.
2. Demographics, Geography and Personal Information
This can be information email signups provided, or marketers could overlay information from one of the many data companies to learn more about their lists. Personal information might include information such as presence of children, home ownership, lifestyle interests and buying behavior. This also works for B-to-B, where marketers might segment on job function, industry and more.
The NHL has a large fan base, but it's interesting to note that 60 percent of fans don't live near their favorite teams. So, the organization segments its emails based on a subscriber's ZIP code and favorite team.
For example, a Boston Bruins fan who lives near Boston receives emails that feature upcoming home game schedules. However, if a Bruins fan lives in Philadelphia, he or she will get a similar email, but only when the Bruins are playing in Philly. The NHL knows this geographical segmentation strategy has increased single ticket game sales.
3. Email Behavior
Look at who regularly opens and clicks on your emails and what product categories or promotions they click on. For example, Barnes & Noble might regularly feature the latest bestselling fiction, mysteries, biographies and self-help books. If a group of recipients consistently click on mysteries—Barnes & Noble can create a mystery buff segment and market to them. The featured title might be a mystery, although the email message may also promote other genres.
American Meadows sells flowers and bulbs online, and used to regularly send one email per week. The company's email service provider (ESP), Bronto, suggested a change in strategy, and now American Meadows sends two emails per week. The first email promotes a variety of products. If recipients click on a particular product, they receive a second email later in the week featuring the product clicked. Those who did not click receive an email based on which item was the overall winner in terms of clicks.
4. Past Purchase History and RFM
Direct marketers know that if someone has purchased from you, they are much more pre-disposed to purchase from you again. This is a valuable segment. Typically, marketers will either promote other products in the same category or complementary products. For example, Amazon often sends emails based on past purchases and suggests other products based on the premise of "those who purchased this product also bought …"
Clare Florist, a U.K. company, knows if customers made previous purchases, they will buy again. Originally the florist thought a past purchaser might like to order different items. So, in addition to the product most recently ordered, the company provided two other additional items. However, sometimes simple is better; too many choices may paralyze the consumer. The florist tested featuring just the product category of the past purchase. And the test won—by a wide margin.
5. Clicks and Time Spent Onsite
You also can segment based on who clicked on an email and spent time on your site. This requires tight integration between your website and ESP.
SmartPak sells vitamins and supplements for horses. The company's ESP is integrated with its site-tracking platform. This allows SmartPak to send emails when someone browses a particular category presented in their emails.
If someone browses horse supplements, SmartPak will send an email featuring its supplement wizard that lets people easily figure out what's right for their horses. A company spokesperson reported that opens were 37.6 percent, clicks were 7.35 percent and revenue per delivered email was $0.44.
And for good measure, here are four additional segmentation techniques to keep in mind:
- Emails to inactives who have not opened or clicked on emails for months.
- Use of sophisticated modeling to present the right product and offer combination to readers based on profile information and email and site behavior.
- Messages with dynamic personalization are, by their very nature, customized to individual subscribers.
- Triggered messages are extremely relevant, because a trigger is usually based on a user's activity.
Let's close with a few recommendations for future action. If you haven't done any segmentation, don't bite off more than you can chew. Start with two to four segments. Carefully plan how your messaging will be differentiated and take the time to track results. And keep at it! A one-time test is not enough. Make the commitment to regularly employ segmentation for a few months to determine the lift in response. That doesn't mean that every email you send should use segmentation. But the enhanced relevance of these messages should also improve your other email results.