Segmentation - Capitalize on the Differences (1,345 words)
Developing a Plan
Whether you are just starting out or are a seasoned b-to-b veteran, you can enhance your results with a good segmentation plan. Just as you regularly plan how and when your promotions will happen, you need to have a short- and long-term segmentation plan.
A common mistake in segmentation planning is changing segments with every promotion. Unless you are able to re-accumulate these segments, you will not have consistent groups whose performance you can track over time. It is the historical record of the performance of these consistent, "bellwether" segments that will allow you to predict the future size and performance of your segments.
Having established benchmark segments, it is important to test. Just as you devote 15 percent to 20 percent of your promotions to testing new offers, you need to be constantly on the lookout for new segments to test. For example: You have determined that customers who bought widgets in the last six months are a segment that works well. You might want to "drill down" to test whether buyers who bought widgets in the last three months perform better than those who bought their widgets four to six months ago.
For years, b-to-b marketers would complain that offers tested would not perform the same when they were rolled out to a larger group. For some, the answer was that segments performed differently to offers and that the relative mix of the segments affects the outcome dramatically. For example, you test 5,000 one-time buyers and 5,000 repeat buyers. When rolled out to the entire database, which might consist of 75 percent one-time buyers, the result might be different than what you had experienced when you artificially mailed 50 percent one-time buyers in the test.
Remember that keeping a record of how a segment performs historically will allow you to compare that segment's test results to the traditional performance of that segment over time—not just to the results of different segments being tested. Now you can understand how seasonality, fiscal years, budget timing, etc., can affect tests and rollouts.