Segmentation - Capitalize on the Differences (1,345 words)
Another common mistake database marketers make, especially in b-to-b markets where databases may be smaller than their consumer counterparts, is to segment their databases into segments too small to measure or predict reliably. On the other hand, certain segments are so powerful that you do not want to collapse them, even if they are small. For example, separate one-time buyers from repeat buyers. Unfortunately that means, with a very tiny but select database, you may need to mail repeatedly to accumulate the 100 to 200 orders necessary to show sound results and patterns.
Just as your segmentation plan addresses which segments you will select for which promotions, it should also account for which segments you will suppress or exclude from certain promotions. For example, you might want to exclude a segment if it consists of customers or prospects that have proven unprofitable in the past, requested no more promotions or are actively being tested elsewhere.
Some b-to-b marketers believe that the choice of which segments to suppress is actually more important than the choice of which to promote. To illustrate the power of suppression, consider key decision-makers in a b-to-b database. These individuals may appear as prospects that never buy because they place orders through others. If you are overly vigilant in your suppression, you may exclude these individuals and the sales and profits they produce. Use suppression only when you are certain of whom you are excluding. Also, remember to suppress consistently. If you suppress names from a benchmark segment sometimes and don't suppress them at other times, your performance record for that segment may vary.
In short, make sure your segmentation plan includes the following variables at site and individual levels: recency, frequency, monetary, product and channel. Incorporate data obtained from research activities, and purchase other data for variables your tests have indicated to be essential. You can, and will, develop the combination of attributes particular to your business that will make your b-to-b segmentation successful!