| Reggie Brady Marketing Solutions 203-838-8138 | ||||||||||||
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| Reggie's articles appearing in Target Marketing Magazine | ||||||||||||
| How to Build a Segmentation Strategy with Email June, 2001 BY REGINA BRADY Now you’re up and running with email marketing to your customer file. You’ve mastered developing various creative approaches that work best for your market. You’re beginning to capture a lot of information on how your customers interact with email: click throughs on specific links, viral or pass along activity, and purchase information. In fact, after a few months you’ve got so much information about each person’s behavior that you’re overwhelmed with how to make sense of all the data. Here are some thoughts on how to harness the power of the information you now have to develop ongoing email marketing strategies. We’re going to use Bob’s Gadgets and Gizmos as our marketer. Bob has four distinct product lines that he offers to his customers: gadgets, gizmos, widgets and odds & ends. Bob has been emailing his customer file on a weekly basis for the past three months. Bob is new at this and he’s been sending the same message to his entire base each week to develop some metrics on what products and categories have the most appeal. In each message Bob has promoted two specific merchandise offerings from across his product line (each with specific links directly to the item) and he’s included a third link to a weekly promotion, sale or deep-discount item. Of course, he’s also included an opt-out link but he’s been lucky and has seen very few opt-outs. Bob’s now ready to ratchet up his email marketing to the next level. He wants to develop specific customer segments and begin to tailor messages to major customer segments. While he’s initially enjoyed good success with his email campaigns; he knows that to get the best ROI he needs to use database marketing principles. Initially, Bob developed three different segmentation categories. Segment 1. Clickers and Buyers by Product Line It’s obvious that Bob would want to examine which of his product lines specific customers are interested in so that he can focus his marketing messages. Someone who has consistently clicked through to view Gizmos and has actually bought one of the Gizmos should be receiving future messages that begin by promoting the latest Gizmo available. But sometimes things are not as easy as they seem. Most email reports will show click- thoughs and purchases on specific links but reporting systems usually show the specific link – and we know that individual links can be very obtuse. For example: http://www.offers.bobsgadgets.com/item123/mail?=eBh701JL01P26 Bob could be looking at hundreds of individual item links trying to figure out which link was associated with which product line. Bob was smart and he planned ahead. He “tagged” or labeled each of his URL links. So, each link was tagged or associated with a specific product line. So, it was actually easy for him to identify who was interested in what. Bob decided to create customer segments by product line by looking at any customer who bought an item in a product category or who had clicked through on a product line 5 or more times over the past three months. Segment 2. Discount and Promotion Junkies Bob decided to create a segment of customers who had taken advantage of his sale and discount offers. Analysis had shown that these are low-margin customers and in some cases Bob was actually losing money on these items. Bob’s strategy with these customers is to try to “trade them up.” He will only present sale offers to them once per month in an effort to turn them into more productive customers. Segment 3. Evangelists Bob identified a core group within his customer base who have passed along their emails to friends and business associates. (Note: Bob does not know who the new recipients were but he was able to track the fact that the message was passed along.) These folks have been a source of new customers for Bob and are a very valuable segment for him. Bob is planning to reward his evangelists from time to time with special offers in recognition of their efforts. Putting it All Together Bob’s now ready to be a lot more focused with his ongoing email campaigns. Because he’s identified specific interest areas he is now able to move much closer to one-to-one marketing. Of course, each customer does not fall neatly into one segment. Widget clickers and buyers can also be buyers of Gadgets and might also be evangelists. Bob will create a matrix of each major segment and will use a “rules based” approach to his ongoing communications. And each of his ongoing campaigns will be assembled dynamically “on the fly.” For example, for Widget clickers and buyers he’ll lead off with a Widget offer and if they have also indicated an interest in Gadgets Bob plans to insert a Gadget offer as the second offering in the email. He’s created a hierarchy of offers for each major customer group. This took time, care, planning and analysis. But the payoff should be great! Bob will be able to maximize his email marketing efforts, improve his ROI and communicate with his customers in a way that recognizes their relationship with his company. Reggie Brady has formed Reggie Brady Marketing Solutions, an e-marketing and integrated DM consultancy. Reach her at 203-838-8138 or email her at reginabrady@att.net. Return to Articles | ||||||||||||
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