Segmentation allows marketers to leverage customer information
Leverage the power of your information, said the panelists at DM News' Segmentation for Everyone Web cast. Segmenting allows advertisers to focus a campaign on a subset of potential customers that are "most likely" to purchase an offer.
If done properly, this helps insure the highest return on investment, the panelists pointed out. However, it does depend what is being sold, as there are differences in what to consider when defining market segments.
"It is key to define your life cycle stages and objectives and then design your communication strategy accordingly," said Jeff Rosenzweig, senior manager of CRM and e-mail marketing at Travelocity. "Inspire, convert, cross-sell, get feedback and inspire others with it."
Travelocity segments its customers through behavioral attributes, shopping and booking behavior, subscriptions, geography, psychographic interests and hobbies. Demographics such as socio-economic status, marital status and presence of children could be useful as well.
Segmentation allows for more relevant ads, and relevance can drive up to a 20-fold increase in performance, Rosenzweig said.
"Be compelling and personalize," he told listeners.
EDining Advantage helps clients gather information about people who have eaten at their restaurants. Restaurants are asked to have customers fill out cards with information such as name, e-mail address and birthday. The cards are sent to EDA in postage-paid mailers and processed. Each customer is segmented by restaurant and sent offers via e-mail.
"A forward-to-a-friend button can increases traffic to a site and to the restaurants themselves," said Jason Smith, founder and CEO of eDining Advantage.
Smith also said that 78 percent of prospects look forward to receiving any type of e-mail from a business they frequent and 90 percent of AOL consumers expressed a strong desire to receive discounts and special offers from businesses
Columbia Sportswear Co. started its e-mail program in 2003 and sent the same general e-mails to its entire database.
"Our company philosophy was everyone is interested in everything," said Daria Colner, Internet marketing manager for Columbia Sportswear Company.
The company was seeing an open rate of about 18 percent to 27 percent and a click through rate of about 4 percent to 15 percent.
"We were not as successful as we could be," Colner said.
That's when Columbia decided to develop a new approach to get click through and open rates up through segmentation.
The company created seven categories based on identified customer profiles and the open rate is now 52 percent to 69 percent and the click through rate is 19 percent to 23 percent.
Jenny Craig also uses segmentation to determine the most appropriate offers to send prospects.
"We focus on inactive clients most of all, as it is easier to win a client back then it is to attract new ones," said Robyn Davidoff, director of integrated marketing for Jenny Craig.
The weight-loss company uses personalization and segment-based messages and offers, and phone numbers at the bottom of each e-mail are segmented in order to track which campaign a prospect is calling in regard to.
"Test subject lines. Create two or three subject lines and send out a small percentage with each subject line," Davidoff said. "The one that works best should be sent out with the remainder of the names."