Segment your customers to get them to spend more

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Ben Chestnut
Ben Chestnut

A while back, CNN Money ran an article called “Kroger's Secret Marketing Weapon” — about how the company is using database mining to market to its customers. Products on Kroger's shelves are assigned a score based on attributes such as price, quality, freshness and size of package. The system then searches for customers whose shopping carts have similar scores, and groups those shoppers together into segments, ranging from budget shoppers to dieting shoppers to family-focused ones. Each segment gets customized mailings with coupons of products, so every shopper is rewarded based on a deep analysis of what and how much they buy.

To increase relevancy, deliver more value, outshine the compe­tition and increase sales, marketers must begin to segment their e-mail lists for more value-based campaigns. Here's the best way to do it:

First of all, synchronize your lists. Everyone has customer lists, newsletter lists, prospect lists, etc. Often these lists exist within different systems, like CRM, order entry, service and support. Synchronizing your lists means you can have a single, clean, up-to-date cus­tomer record with the correct contact info, purchase history, credit report, etc. For example, if “A. Customer” and “Aaron Customer” are the same person, you would keep only one record.

Next, break out customers vs. prospects. Customers want to be treated as customers and acknowledged for their purchases. You should never send e-mails to prospects who might not remember who the heck you are. Further segment lists by product line, demographics, geography, purchasing habits, brands preferred, etc. For example, maybe you wanted to send a special offer to subscribers in one ZIP code. Or you wanted to send only to subscribers who are females.

Also, treat returning, frequent and high-spending customers dif­ferently from others by making them feel special with thank-you bonuses on purchases.

You can further segment your lists by measuring how often customers open e-mails and click through them. Those that open e-mails, engage with them, click on offerings, and purchase your products and services are of better value to your company than ones who just open the e-mail.

E-mail marketers can send campaigns to people who clicked on a certain link in a previous campaign; send to subscribers within a specific domain name; send to subscribers who did not open a recent campaign; send to subscribers whose birthdays are in a certain month; or send to people who subscribed within a certain date range. The possibilities are endless.

E-mail marketing experts use customer list segmentation to send very focused e-mail campaigns that are more relevant to their customers. The idea is that the more relevant the campaign is to your subscribers, the better your response rates and the more they will buy from you.

Today's e-mail marketing technologies make segmenting and targeting with relevant content so easy, a monkey could do it. Segmentation helps you get to know your customers better, understand their unique shopping habits, and ultimately increase their spending with your company.

Ben Chestnut is co-founder of MailChimp.com. Reach him at ben@mailchimp.com.

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