What is segmentation and why should you be using it?
Customer segmentation is the practice of dividing your email list into smaller pots, for example high value vs. low value purchasers and sending each pot a different targeted message based on the kinds of information and offers they are likely to be receptive to.
Research by the service provider Mail Chimp has shown that segmenting an e-mail list in order to deliver highly personalized and relevant content can increase open and click through rates by over 14%. Another study by Jupiter research has shown that sending targeted messages to a segmented email list can lead to up to ten times more revenue than sending a ‘one size fits all’ message to the whole contact database.
Segmenting your email list can also reduce the chance of your message being flagged as spam. People have grown wise to the ‘spray and pray’ approach of email marketing. This involves sending untargeted messages to very high volumes of cold contacts that are not currently engaged with your brand and may or may not be interested in your offer. Being flagged as a spammer will only harm your chances of getting future emails delivered.
6 Easy ways to segment your email list.
- Current Relationship (Prospect or Client)
Prospects are more likely to be interested in introductory special offers, whereas if a current client sees that you have an introductory offer they are more likely to be offended that they are not eligible for it. On the other hand, clients will want to find out more about news within you organization and new services you are offering. - Previous Purchases
You will have a record of the purchases that your clients have made in the past. This is the best indicator of what they are likely to purchase in the future. For example, if a customer has bought a car, they are likely to need an MOT in the future, if they have bought a printer they are likely to require toner and if they have bought a water cooler they are likely to need cups etc.Therefore, if you have a very diverse range of products it is advisable to split your products into different categories and then send targeted emails to customers with current offers within the categories they have previously purchased. - Price Brackets and VIPS.
You should be able to split your clients based on the value of their previous purchases. You should be advertising products to your clients that are of a similar value to their previous purchases.You could also create a segment in your database for VIP clients so that they can receive extra special offers based on their customer loyalty or the high value of purchases they have previously made. You may also consider sending a special targeted newsletter to your VIPs. - Demographic Data
You can subject your database on simple demographic variables such as age, sex, marital status and income. You can also use more complex techniques such as segmenting your database by MOSIAC categories. This is especially effective for B2B communications.This can be combined with previous purchase history, so if you realize that one range of products is very successful with women between the ages of 18-30 then you should target this demographic with email communications and offers relating to this product. - Click Through Rates
Click through rates are an indicator of loyalty and receptiveness to your email campaigns. You could experiment with sending the most receptive members of your email list more frequent communications. - Location
If you have promotional offers that are only running in specific locations then it is advisable to segment your email list accordingly.Failing to do so will only annoy any recipients whose locations are not providing the special offers and increase the chance of them labeling your message as junk or spam.
