Introduction
You may have heard the oft repeated refrain that “personalization is the key to great email campaigns”, but more often than not that’s where the advice stops. Nothing further is added or given. So, if you ever wondered what audience segmentation exactly is, why is it important and how you can implement it, look no further. We have you covered!
What is audience segmentation
Audience segmentation is breaking down your audience into subgroups with common attributes. An example would be breaking your audience down by their age, location etc. You can also break your audience down into broader subgroups. Fans of baseball, or football for example.
Why is it important
When running marketing campaigns for your business you may have noticed, some customers respond more enthusiastically than others. With a proper way to divide your audience into subgroups, you can design marketing campaigns around each specific subgroup thus ensuring better responses and conversions.
This extends into all spheres of marketing, not just offline marketing campaigns, but even for internet ads, email campaigns etc.
Your business is likely to grow and shift over time. When you split your customer base into different segments, you need to be able to analyze the data from each of those segments. This is where your most effective strategies and your most active segmentation can be narrowed down on.
How does segmentation work?
An interesting direction to take is segmenting your customers by their engagement levels. While some are highly active on your website, others might not engage with emails or social media. If certain customers aren’t responding to your marketing efforts, consider adjusting your approach.
For instance, if some dislike marketing emails, reduce their frequency based on their click-through rates and explore alternative outreach methods. And thus you’ll notice your emails will work better. While you have reduced the audience, your emails are going to interested customers only, thus allowing you to gauge how to further improve conversions based on subject lines or content.
As customers view products on your website, you can gradually develop a picture of the types of products they are interested in. By segmenting your customers based on the items they have purchased, you can develop predictions for products that might result in cross sell. And thus due to this segmentation, your sales funnel will also improve.
To begin with, try this approach as a rule of thumb:
- Your active users: try and send them emails consistently. Use this pool to experiment with everything, be it content, subject lines, offers, etc.
- Inactive users: Reach out to them on a bi-monthly basis and send the best performing email template.
- Users from other sources: gather data from social ads, downloads, and whoever expresses interest in your products. This is ideal for cross-selling and retention emails.
- Outbound and unknown users: send the best performing email and do a monthly drip.
Most importantly, consistently monitor your investments on various marketing initiatives in comparison to the sales and actionable leads being generated. Different initiatives are more effective in some segments than others. If you see a higher ROI for a particular push in one segment, you can focus your resources on that initiative within that segment.
Lastly, you’ll need a marketing tool which lets you upload data seamlessly.
Your customer segmentation tools need to seamlessly integrate and combine data from diverse sources, including CRM solutions, website and retail purchases data, and user behaviour tracking tools. If your segmentation tools can’t process this data effectively, you’ll either incur extra expenses to convert it or miss out on developing effective marketing strategies. But if you don’t have a tool, you’ll have to segment your data manually, which will be huge hassle.
Ask, how easy is it for your team to access the data in your customer segmentation system once it’s been gathered? Is the system able to present that data in an easy-to-understand format? The answers to these questions will help you determine approximately how effective a potential customer-segmentation solution may be.
