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Customer Retention. Automated

The Power of Segmentation

Posted by Enelda Butler on Sep 17, 2015 12:05:24 PM
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Segmentation is a great way to make sure you’re getting the right message to different groups of customers. However, according to a survey of leading online retailers, 50% of respondents reported that they do not segment their regular promotional emails or newsletters. Segmentation helps to build relationships with customers by leading to increased engagement with your email marketing. In fact, for segmented messages open rates are 13% higher and click rates increase 52% when compared to average engagement rates of non-segmented promotional emails.[1]

The first segments we suggest you create are: best customers, non-purchasers, churning customers, and all others. We recommend these groups because they will likely be your largest customer segments, and should be the easiest to target.

When segmenting, make sure that the message is relevant to the group that will receive it. You can do this by tailoring the subject line, intro text, and other copy to each segment. Additionally, if the email includes an offer, like a coupon code to motivate the next purchase, each variation should use an offer specific to that segment. For instance, you can give one-time buyers a 20% discount to motivate a second purchase, where best customers, who are already more likely to purchase again, might receive free shipping.

Once you get a handle on these main segments, you can start segmenting your customers based on other data, like product, category, gender, age, and more. You can also segment based on categories that are unique to your business. For example, if you are an online makeup retailer and you collect data on customers’ skin type or complexion, you can trigger targeted messages based on this information.

Customer segmentation is key for growing revenue and customer engagement. It can also give you a better sense of what messaging and offers are and are not working for your key segments. Take this evaluation one step further by creating benchmark open and click rates for each key segment. Once the benchmarks are in place, you can use this data to understand how altering segmented promotional email copy, subject lines, calls to action, etc. impacts customer engagement.

 

For a more in-depth look at segmentation benchmarking, read this recent blog post on why your open and click rates are misleading.

To learn more about the latest retention marketing trends in the eCommerce industry, download the 2015 Retention Marketing Survey.

 


[1] http://mailchimp.com/resources/research/effects-of-list-segmentation-on-email-marketing-stats/

 

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Topics: Customer Retention, Best Practices