Before talking about the benefits of segmentation let’s look at what it means in terms of marketing and why it’s actually advanced.
In general, segmentation is all methods and approaches aimed to split your contact base into segments based on different conditions and parameters. The term is often used in reference to email marketing automation. However, it actually applies to any channel you use for commercial communication with your customers, be it SMS, Web Push, Mob Push, or messengers.
The main purpose of segmentation is to build as precise segments and eventually create relevant offers tailored to each particular segment. The more segments you have, the more personalized your campaigns would be.
How to Collect Data for Segmentation
Any customer data can be used for segmentation. Typically, there are two ways you can obtain such data: via manual provision by subscribers themselves or via automated collection.
Manually provided data is applied to the personal info subscribers or customers give you via subscription forms, profile/account updates, feedback or reviews, offline events, etc. It includes:
- email address and phone number;
- preferred language;
- marital status, etc.
Such data is mostly permanent and is rarely changed or updated, if ever. It’s indicated in the customer card, giving the general idea of your audience portrait, and helping split the base into main basic segments.
Automated collection presupposes tracking of customer behavior on the website and social media and of their interaction with your campaigns. It may include:
- website visit time and frequency;
- average session;
- viewed categories;
- added products;
- commented or reviewed products;
- most often purchases;
- purchase frequency;
- average check;
- payment method;
- preferred product category or brand;
- message opens and clicks;
- preferred open time;
- most clicked offers;
- most often used incentives;
- shares, likes and comments on social media.
Such data is fluid and fluctuating and requires constant updates. This is actually the so-called big data marketers use to predict customer wishes and needs and generate the offer even before the demand.
Segmentation in Practice
Behavior-based data is an immense always-changing pool that can’t be analyzed in a manual mode. That’s why most modern marketing service providers use Artificial Intelligence for analysis and eventual recommendations. And this is where we talk about advanced segmentation that considers the behavioral pattern of each customer and helps come up with the relevant offers.
Imagine you have a base of 500,000 contacts and plan to send a promo announcing new arrivals. You create one email template and schedule it to be sent on Monday. Advanced segmentation will make sure the email content and sending time is optimized for each contact based on their behavioral patterns. How exactly? It can help organize content hierarchy, fill in recommendation blocks with only relevant products with relevant price tags, optimize send hours, and make sure the annoyance level for a particular contact isn’t exceeded.
Your contact base isn’t homogeneous, and each contact has their own preferences. Some prefer only particular product category or brand; some never use promo codes but always opt for free shipping; some never make purchases over $#; some open emails only in the morning; and some always read mail only at lunchtime. There are hundreds of other minor behavioral characteristics that are considered during segmentation to create as personalized offers.
And the best part is that most segmentation processes are automated. You set the conditions for segmentation once and the system will run automatically, analyzing behavior of each customer and offering optimized solutions for their engagement, retention, and reactivation.
Why Your Business Needs Segmentation
- It generates sales. It’s not rocket science to assume that people would most likely respond to offers that address their current needs. People don’t have time to look through your whole product range, looking for the right pick. Your task is to offer such a pick in your emails – the product of the right color and size, of the right price, with the right complementary recommendations – at the right time. Only in this case, your campaigns have a chance to be at least considered and not sent straight to Trash or even Spam.
- It retains customers. When you constantly keep people interested in your services by predicting their demand and reacting in advance, they won’t have to go look elsewhere (unless the quality of your products and service drops). And to keep them interested, you need not only to know their website browse history, most viewed categories, viewed product reviews, email open rate and click map, etc., but also be able to put this knowledge into practice.
- It improves an unsubscribe rate. The logic is simple. People don’t give up on what they find useful. Campaigns that deliver interesting, informative, entertaining, or fun content are less likely to have high bounces and unsubscribes. And low bounce and unsubscribe rates improve the overall deliverability of emails and create you a reputation of a trustworthy sender.
- It builds a company image. People respect it when you save their time by not showing mass ads and bombarding with completely irrelevant messages. If a person opens your email and finds the content inside useful and satisfying, chances of your further campaigns to be opened double. With several emails that hit the target, your brand is likely to be recommended to friends and shared on social media.
- It saves your time. Web tracking and AI-supported segmentation don’t require regular manual adjustments. You set the conditions and the system does the job.
- It doesn’t require high-tech skills. Modern professional email service providers implement the segmentation algorithms that can be configured without programmers, by simply installing the generated code on the website. That’s especially important for startups and small businesses that don’t have a developer team. Marketers of big companies, on the other hand, save time spent on writing technical tasks and corresponding discussions that may be quite long.
- It can be used for an omnichannel strategy. Email marketing isn’t the only application of segmentation. SMS campaigns, mobile pushes and web push notifications can benefit from segmentation as well. And the success of each channel separately generated contributes to the success of all marketing efforts. What’s more, some marketing platforms recently have started offering support of website recommendations, meaning you’ll be able to apply contact data to your web content.
Although segmentation has been a buzz word in the marketing world for a while, not all brands realize how many benefits it can bring their business. Regardless of the company type, goals and current marketing position, data collection and contact segmentation will help you generate more conversions and build long-lasting relationships. Create your email content tailored to each particular person from your contact base, and you’ll soon enjoy the benefits of such a personalized and targeted approach.
Iuliia Nesterenko is a technical writer at eSputnik. Her focus is on exploring current digital marketing trends and describing new strategies for email marketers.