Nov 03, 2008
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MarketingSherpa has published Case Studies and research data on list segmentation for seven years now. We've got data coming out of our ears showing that if you split your list into groups by recent activity and/or demographic and send special campaigns to those groups, your response rates will soar.
Nearly everyone says: "Oh yes. Segmentation is a best practice. But I don't have the time/money/software/energy to do it. So I'll keep blasting my entire house list with the exact same creative and timing from now until someday."
Of course, someday never comes because we're all so awfully busy with other stuff.
It's been this way forever, so why is it driving me nuts today? Because we're in a recession. Marketing desperately needs to look like the Department of Heroes – instead of just a cost center. Segmentation can give your campaigns a lift at low or no cost. Now is the time, if any, to get a segmentation committee set up to take advantage of this.
Step 1. Examine your technology
For your email list, talk to your ESP (email service provider) or in-house email department to find out how your current software can allow you to segment. Can you slice opt-ins by date? How about clicks not converted? How about opens not clicked? Definitely ask about source – the place the email name first came from. And, of course, is there any demographic data you can slice by?
If your email, customer and/or prospect databases are in separate silos, you'll also want to set up a third database. You can use anything from a simple spreadsheet to a complex program such as SalesForce – where you can merge information from all sources to get a more complex (and segmentable) version of your email list. Be sure routine updates will work because you never want to miss an unsubscribe and get in trouble.
For your postal mailing lists, talk to your database administrator to find out how much segmentation is possible as well. If the database department is not capturing a lot of useful information with records, they can start tomorrow if you give them directions today. This recession is going to be a long one, so get started!
Step 2. Start testing
Special campaigns to newest opt-ins or sign-ups are my favorite sweet spot because we have so much data showing they can work phenomenally well. Follow-up campaigns to people who recently clicked but did not convert are also a huge favorite of mine because often you can do as well as the original campaign did. I'm also a fan of reminder campaigns to opt-ins who recently abandoned shopping carts or form-fills midstream.
On the B-to-B side, you should segment by the way your target demographic naturally segments itself. Your internal organization – such as product lines or sales territories – may be completely irrelevant. It's about the prospect's view of what their primary role is.
In general, some businesspeople primarily consider themselves to be members of an industry, such as healthcare or manufacturing, irrespective of what their job function is. Other businesspeople primarily consider themselves to be members of a profession, such as IT or HR, irrespective of what their company does.
Start communicating by primary segment and the new accounts will follow naturally.
Unfortunately, of course, all of this segmentation requires more work on the part of marketing. You're probably stretched a bit thin now as it is and may be shrinking staff or resources. So the decision to invest time and energy into segmentation is twofold. It's not just: "How should we start?" It's also: “What other thing may we abandon?"
My advice – make a cold, hard-hearted decision ruled by numbers alone. If a marketing program is not responsible for 10% or more of your total department results, or it dependably raises brand awareness (as measured by prospect surveys), then cut back. Focus your time, improvements, and tests on the stuff that has the most impact.
My bet is that segmentation is one of the high impact activities that will be kept on your list.