Marketers have long practiced segmentation by creating print catalogues and newsletters as a method of targeting groups of customers for specific offers.
The segmentation process is commonplace. The RFM (Recency, Frequency and Monetary) values are used to analyze customers’ needs for marketing purposes, or a customer file model is used to evaluate and score his or her behavior from best to worst. Should the ‘best’ customer segments be mailed more frequently? Could the most ‘loyal’ customers be rewarded with a special offer? Is there any segment of customers that can be encouraged to ‘spend more’?
Sometimes, it may be difficult to establish reliable segments using RFM analysis. In addition, the incremental cost of doing this might never be recovered through the targeted message or offer.
Nowadays, consumers are becoming more and more comfortable with targeted advertising and personalized content. The age of e-mail marketing is coming and the practice of effective micro-segmentation has proved to be important.
It is essential for a company to get its marketing database organized and the information integrated. Whether customer A visited the website’s pricing page; whether customer B is a Twitter follower… Only knowing almost everything about customers, can the company provide useful, timely emails and helpful Web content that will significantly improve customers’ conversion ratios.
Small, segmented sends are more engaging than large, untargeted sends. The smaller the group, the more focused and relevant the message can be. Moreover, a great sender reputation among customers will also be improved.
For example, if marketers write an e-mail to David on their list, and they have a very comprehensive understanding of who David is and what he is looking for at that moment, then marketers will be able to make compelling copy that truly speaks to all those Davids.
And if marketers stick to this practice, over time, those Davids will start to realize that every time they get an email, they know the content will be interesting to them. If you think about all the e-mails you receive as a buyer, aren’t the ones you open time and time again the ones whose content always seems to appeal to you?