Segmentation 101: Setting up for Success
Marketers have been talking about relevant emails for the past decade. But, unfortunately, targeting and segmentation, while considered best practices, are still not the norm for many retailers. Many of the solutions for dynamic content, segmentation and personalize have historically been difficult to use because the data was tough to access and utilize in a meaningful way.
But, fortunately, all of that has changed. Technology that truly automates personalization and makes segmentation available in just a few clicks is now readily available and is easy for marketers to use. As long as the customer data is accessible, messages can be highly targeted, deeply segmented and extremely personal to each recipient.
Retail marketers are sitting on a ton of customer data. The key to using it effectively to inform cross-channel campaigns is to make it easily accessible. The ability to leverage your data – whether it is email-specific, such as opt-in date or method, last open or click date, etc., or customer-specific, such as last browsed or purchased category or lifetime spend – makes all the difference when creating targeted messages.
One of the greatest – and easiest – things you can do to ensure your data is accessible is to keep a master email list.
Master List or Multi-List – Which is Right for You?
One of the questions we hear often from new clients is whether or not they should move to a master list. It seems many retailers are still keeping multiple lists that represent different customer segments. This could be because their previous email service provider didn’t offer robust segmentation capabilities or because it is just what they are used to.
Keeping multiple lists is not a segmentation tactic. You should only keep multiple lists to clearly define different divisions of your company where subscribers do not overlap. For example, a retailer that manages several different brand stores/ecommerce sites, such as Gap with Banana Republic and Old Navy, should keep separate lists for each brand. However, if a retailer sells different brands or categories of goods from a single store or eCommerce site, like a department store, a master list is your best option.
If you are still keeping multiple lists for each segment, it’s time to consider moving to a single list. Doing so provides so many benefits. You’ll save yourself time, resources, money and, in many cases, headaches or other general pain caused by the restriction of multiple lists. Not only that, but you’ll greatly increase your ability to track metrics and compare results over time across the different segments, easily create personalized and targeted messages and discover new trends and customer segments that you might not know even existed.
The Limitations of Multiple Lists
On the front end, it might seem like keeping multiple lists for different subscriber segments makes sense. But doing so has many limitations:
- You have to manually add/delete subscribers as they move into your defined list segments
- You cannot easily cross-sell or upsell customers
- If you want to send the same message to different lists, you have to set up the message multiple times, wasting valuable time and resources
- You can’t easily track results across the different lists
- You can only target subscribers based on the list definitions – you can’t segment creatively or find new trends
- You won’t be able to set up specific solutions or strategies across multiple lists as the data needed to drive these campaigns is list-centric
Segmenting Your Master List
Another question we hear often from new clients is how to get started with segmentation. We recommend starting with the basics and then gradually progressing to more targeted sends.
A great place to start is by segmenting your master list by subscriber behavior and then sending the same content to both groups. Because all subscribers reside on the same master list, you only have to set up the message once. But by segmenting the list into two groups – such as subscribers who have purchased and have never bought – you will gain an understanding of how the two segments react to your email messages.
After analyzing the performance of each group, you can then split-test messaging to the segments to gather even more data. You’ll be able to generate ideas on the best ways to reach each segment as you move to the next stage.
As you become more familiar and comfortable with segmentation, create a simply matrix or a quadrant based on subscriber activity – and define each segment carefully so all subscribers fall into one section – such as:
- New subscribers – opt-ins within 30 days
- Active subscribers – email opened in past 60 days
- Lapsing subscribers – email not opened in past 60 days
- Inactive subscribers – email not opened in over 60 days
Listrak’s segmentation functionality makes it simple to segment subscribers in this way with just a few clicks.
After your list is segmented, create your message but use a slightly different subject line and header message for each segment. This allows you to speak to each group separately without spending hours creating different versions of each message. You’ll notice a huge bump in both engagement and revenue by segmenting your messages this way.
Once you understand how your subscribers react to the targeted messages, you’ll be ready to segment even further. These messages are the true 1:1 personalized emails that your customers find the most useful. You can mix and match any of the subscribers’ data points to creatively target shoppers.
For example, you could target shoppers that browsed a particular category online but haven’t purchased from you yet, or shoppers who purchased from you at least three times in the past but haven’t clicked on an email within 60 days. The sky is the limit.