Segmentation. It’s a word that comes with many uses, often making it misunderstood and confusing. The most important thing for marketers is to understand why they should employ it in their digital strategies, especially when it comes to email marketing.

While segmentation isn’t a new topic, it is garnering more and more interest from marketers looking to tackle it at different levels. In a basic form, segmentation could be dividing an audience based on gender, for example, while

more complex segmentation might look at mixing purchase and engagement data.

Segmentation – what’s it all about?

It’s not uncommon for there to be confusion between personalisation and segmentation as they both share the role of using data to provide customers with more relevant content. Segmentation is the art of breaking up your database into groups of customers with similar (single or multiple) criteria. This criterion could be post code, gender, age or even a behaviour, such as when they made their latest purchase. Personalisation, on the other hand, is about tailoring content within a communication based on customer data, such as using their first name or displaying their postal address.

By grouping customers into different segments, marketers can be much more flexible with their communications, delivering more effective content to their most profitable customers for each specific piece of content.

The business value

Delivering the right message, to the right person, at the right time greatly increases the likelihood of converting a sale. On the flip side, sending irrelevant communications will at best irritate your customers and, at worst, turn them away from your brand and encourage them to go elsewhere.

Greater loyalty

In a world where consumers expect brands to understand them, marketers have no excuse not to use the information they have to deliver more appropriate and engaging experiences. Segmentation allows marketers to deliver messages to groups of people based on the core characteristics and behaviour of those customers, resulting in the delivery of messages that resonate.

The easier, smoother and more relevant marketers make their experiences, the more affinity customers will feel towards their brand. Brands that consistently deliver high-quality experiences put themselves in the best position of making customers loyal customers.

Boosting revenue

Increasing relevance will naturally lead to a higher conversion rate. A higher conversion rate should in turn lead to more sales and greater contribution to your company’s bottom line – a priority for all modern marketers.

Uplifting deliverability

By segmenting the audience into smaller sized groups based on relevance of particular campaigns, engagement rates will increase. The greater engagement, the greater deliverability. For example, if you segment your audience based on preferred day of the week for purchase and send to each segment on that day, it’s safe to assume your open rate will increase.

Increased ROI

We’re all in agreement that the one size fits all model is outdated. Not only does it irritate customers, it also exasperates inefficiencies when sending to entire databases, especially when sections of that database are no longer responsive.

Reducing the frequency of send for your inactive customers will help keep costs down by improving the deliverability rates of emails to active customers and potentially improving brand perception for the less active ones.

It’s clear customer segmentation has an important role in the modern marketing mix. In order to speak to customers with relevancy, marketers need to segment them into pots based on behaviour or characteristics. Only then will it be possible to start working on more sophisticated ways of communicating effectively.

 

By Jalna Soulage, digital consultant at Experian Marketing Services

 

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