Best Practice Advice

How to choose an appropriate segmentation model for your email programme

Effective email campaigns demand more than just capturing email addresses. The more information collected at the sign-up process creates additional opportunities to segment your database into smaller groups of people who share similar characteristics and enables you to target them individually. In this ‘Ask the Experts article Simon Bowker, eCircle’s UK Managing Director will take you through the different segmentation models to help ensure that your segmentation strategy is working effectively.

To help you make the choice about which way to segment your data, it is helpful to consider the different types of segmentation models that can be applied. By dividing your database into segments you can conquer them through focused, targeted and personalised communications which will result in the formation of better relationships and an improved response to your email campaign.

Profile based segmentation

Profile based segmentation tends to be the simplest and most commonly used method for segmenting emails. If you consider the common fields of data that companies hold for their customers within their email database and start to separate those customers into groups based on that data, then you have a perfectly viable and often very successful segmentation model.

Areas that are often segmented by profiles include:
•    Age – Many businesses would see very different customer habits that could be easily defined by age groups
•    Gender – Sending a male and female version of an email is one of the most commonly used and successful methods for segmenting
•    Geographic location: by knowing where your clients and prospects are based you are able to direct them to their nearest store or offers which are localised to their area – particularly helpful for holiday companies where departure airport is key
•    Key dates: an upcoming event such as a subscription renewal or a recent action can also help to profile your database. Birthdays are also a good opportunity to send customers personalised emails with birthday greetings and tailored offers.
•    Customer or prospect: when an email recipient becomes a customer, you have indication that that person is engaged with your company in a different way than before

Behavioural based segmentation

A powerful way of segmenting your database is to look at click behaviours and browsing or purchase history. In comparison to profile based segmentation (which relies on customers to actually tell you about themselves), behavioural based segmentation is a highly valuable way of gaining information to help you understand how customers are behaving on a deeper level. This makes it possible to tailor and personalise messages to each individual and you can often learn more about a customer from what they do, rather than from what they tell you.

Lifestyle based segmentation

There are a number of ways in which you can use the data that you hold on your customers to build up a more accurate picture of the type of lifestyle and habits they are likely to have. This can be a very powerful way of determining how you should talk to these customers, what offers will suit them and of course how you can maximise the income from your program.

This method of segmentation is based on a deeper analysis of your data to identify patterns that can be used to build customers into groups which tend to exhibit similar behaviours. Those groups are most likely to be based on buying patterns, age groups, regions in which they live and the types of products browsed and purchased.  

Conclusion

Segmentation is not as scary as it sounds, remember that there is no right or wrong decision in choosing the segments for your email programme. Every company has a different set of customers and products and there can be quite different factors which work for one organisation in comparison to another. It is fundamental that your email campaigns are reaching the most relevant audience. If you implement an effective segmentation strategy and segment your data appropriately you can increase your response rates and ROI through focused, targeted and personalised communications. This will result in the formation of stronger customer relationships and an improved response to your campaign.

This article is a summary of eCircle’s newsletter "Inside Digital Marketing". If you wish to receive further news from the email marketing sector please subscribe here: http://www.ecircle.com/en/newsletter