Segment your customers to further drive engagement

To mine the value of your customer data, you must set about to morph your email list into a marketing database and evolve your CRM communication from couponing to engagement.

Follow these few simple steps to get a good start:

  • Track behavior: If you aren’t doing this, start immediately. Start with opens and clicks and communication history. If you can add transactions, or survey participation, or coupon redemption, or other data, do it.
  • Append data: Most loyalty programs collect only email, not postal mail, which means that traditional sources of enhancements don’t help. Always append the basics (like age, gender, household income, presence of children, etc.). Other enhancements are available, like “New/Used Car Indicator,” “Discretionary Spending,” and many others. These can be valuable depending on your circumstance.
  • Segment data using demographic enhancements: Start with male/female, for example. Divide the file into those two groups. Then further subdivide the file using another demographic that your intuition tells you is important. If you’re new to this, stop right there and move to the next step.
  • Study the aggregated behavior of each segment: Do upper income men open at a higher rate than lower income men? Do women click through more than men? By starting your study with only two of the demographic elements, you’ll become confident in the process while you gain valuable insight.
  • Get sophisticated: Add a third demographic element to the mix (like marital status or presence of children). Do married men buy more than single men? Are older empty nesters a significant group? As you build up your segments, you’ll see clear patterns emerge. Therein lies the key to developing intelligence as an engagement tool.
  • Use statistical modeling to identify key clusters: If you know statistics, keep pressing forward using cluster segmentation modeling. Hire someone if you can’t do this yourself. This moves your segmentation from intuitive grid to statistical groupings.
  • Make your segments flesh and blood: Give each segment a name that one of these customers would have. Learn about her, her interests, her habits. In other words, stop thinking about single females with above average income and start getting to know Elizabeth. You engage in relationships with people, not segments.

Bob Massie is the owner and CEO of Marketing Informatics.

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