Whether you have an old customer list that you’ve accumulated over the years or you have just rented a list, list segmentation can provide you valuable insight into your customers’ behavior or preferences that should not be overlooked. The question is: how can you, as the business owner, accomplish this without breaking the bank? It’s easy.
Quick glossary:
List segmentation — the process of dividing your customer list or database into logical buying groups.
Targeted messaging — the process of creating messaging that specifically resonates with a person or group. For example, adding images of scantily clad women to emails being sent to men or images of muscle-bound men to emails being sent to women.
Targeted landing page — a web page with content specifically targeting or engaging the visitor.
Analytics — the process of tracking, monitoring, and tallying the number customer reactions to a particular campaign.
Gathering lists
By way of example, let’s take a look at the fictional car dealership, Rocket Auto.
Rocket Auto has a customer list of previous buyers. They’re fortunate because in the buying process most customers completed a credit application that is chock full of valuable marketing data, such as age, gender, marital status, income level, and more.
There’s a second list: Rocket Auto asks every shopper to complete a buyer-profile card. For customers who do not actually buy, this is used as a follow-up tool. The profile card has a lot of the same information as would be found in a credit application, in fact, even more. When they survey customers, they also ask questions about the type of car for which they are shopping: is this a primary car, a secondary car, a luxury car, a car for the kid, and the like. This helps the salesperson keep an eye out for an appropriate vehicle if the customer leaves without making a purchase.
Segmenting a list
What Rocket Auto is lacking is the understanding of how to use this data, so let’s take a look at one possibility.
The first part of the list segmentation is already done for them: buyers and shoppers (those who did not buy).
We’ll start with a campaign design. For their first foray into list segmentation, they will offer a buying credit of $2500 for which they will create two versions:
- Thank you for your business. (Thank You version, going to buyers.)
- Come see our new inventory. (New Inventory version, going to shoppers.)
The second segmentation effort will divide the two lists into logical buying groups. They’ll segment by gender, age, and income — it breaks down like this:
Group A: Men who earn less than $50k
21-40
41-55
55+
Group B: Women who earn less than $50k
21-40
41-55
55+
Group C: Men who earn more than $50k
21-40
41-55
55+
Group D: Women who earn more than $50k
21-40
41-55
55+
Group E: Men who earn more than $100k
21-40
41-55
55+
Group F: Women who earn more than $100k
21-40
41-55
55+
When we divide both lists as shown above, this makes a total of 24 versions: Thank You group A – F and New Inventory group A – F. While this may sound like a lot, Rocket Auto knows that targeting their messaging will improve their response rates. If Rocket Auto gains even two new customers because the message was appropriate for, and engaging to, the recipient, spending that extra time up front will have been well worth the effort.
Messaging and call to action
To appeal to these disparate buying groups, Rocket Auto will change the graphics and the headline on each of the 24 emails, but the messaging will remain essentially the same.
Graphics are a very important part of any email, so Rocket Auto is giving careful thought to the type of graphic that will appeal to each segment.
Note: There are lots of stock-image suppliers, such as BigStock, iStock, PhotoLibrary, and more, and all provide images as inexpensively as $1 each. With prices such as this, it’s very affordable to create custom messaging for each group.
The most-popular emails these days are those that combine text and imagery. This is an HTML format or an HTML table format with sliced images — and usually requires the help of a professional.
Note: HTML formats are not a requirement, you can send a purely text email, but you may be risking a few response-rate percentage points just to save on the cost of a designer.
In each email Rocket Auto is including a call to action (CTA). In these emails the CTA will be, “Click here to print a voucher for $2500 off your next purchase.”
Select an email service
Rocket Auto uses Constant Contact (a web-based email system) to upload each of the list segments separately (naming them in way that they can easily figure out who is who). With the lists imported, Rocket Auto then uploads the 24 emails and connects each to the appropriate list. A few quick previews and they are ready to send.
Rocket Auto chose Constant Contact® because it has a really great analytics system. Once each email has been sent, they will be able to track who opened their email, who clicked on links, who unsubscribed, and more. (We’ll come back to this in a moment.)
Note: There are other email services such as Mail Chimp, Eloqua, and Exact Target, but for ease of use and features, my choice is Constant Contact. If you have a small list, you may not need a service, and in that case, I recommend DirectMail or MaxBulk Mailer.
Targeted landing pages
There are a number of marketing professionals that find no value in creating targeted landing pages, but I could not disagree more. A targeted landing page serves a number of purposes, but consider this: If Rocket Auto sends out 24 emails to a total of 25,000 people (the combined count of the two lists), and they send all visitors to their home page — even with great analytics software — they will have to manually figure out from which list each visitor came.
For tracking analytics, it’s far easier to create targeted landing pages and the custom messaging of each page will produce better results. By matching the design of the page to the email message, a targeted landing page and makes the visitor feel as though they’ve come to the right place.
A visitor should not have to wander around the home page trying to figure out what link to click to find the voucher. Also, if Rocket Auto put the voucher on their home page, any visitor would be able to print it. This would skew results and Rocket Auto would not know how successful their email campaign had been.
Rocket Auto’s targeted landing pages should use the same images, the same basic design, and the same content as their email. However, since a landing page provides so much more real estate, there is plenty of room to define offer details, add links to other pages within the site (called deep links), add links to other sites, create registration forms, and much more.
Add it all up
In doing the math, we now have two lists, 12 segments each (resulting in 24 emails), and 24 targeted landing pages. (You can gain even more if your email provides more than one link for the customer and each of those links also goes to a targeted landing page…but, I digress.)
With the list segmentation, emails designed, and targeted landing pages posted Rocket Auto is ready to send. The only thing left to do is sit back and wait for results.
When Rocket Auto logs into their Constant Contact dashboard (the administrative page of their account), results are displayed instantly and updated dynamically. Through the dashboard they are able to monitor:
- How many have been sent (so far)
- How many have bounced (and why)
- How many of customers reported this email as spam
- How many customers have opted out (asked not to receive future emails)
- How many have been opened
- How many have been forwarded
- How many times a link has been clicked
- Who clicked each link
Having uploaded each group into a separate email list, Rocket Auto has this information for each segment of both the Thank You list and of the New Inventory list. With a quick scan, and because Constant Contact provides an overview that enables the user to compare the results of multiple mailings against each other, Rocket Auto can easily see that male buyers between the ages of 41 – 55 and who make more than $100k, produced the best result in both campaigns and clicked through 45% of the time.
With that said, let’s go have a look at their targeted landing page results.
Target landing page analytics
Rocket Auto can track the analytics of a web page in the same way that Constant Contact tracked the analytics of an email. This is done using Google® Analytics, a free service from Google.
When Rocket Auto signed up for a Google Analytics account, they were provided a unique identifying code and a dashboard for tracking results. This dashboard looks very much like the dashboard of Constant Contact and provides the same results, and much, much more. With Google Analytics, Rocket Auto can monitor:
- Number of visitors to each page
- How long the visitor stayed on each page
- Bounce rate (number of visitors who came to the site and left without visiting another page)
- Total number of pages that were visited
- Average number of pages that each visitor saw
- What percentage of visitors are new to the site
- From where in the world the traffic originated
- What search phrases were used to find the page
- And more
To use Google Analytics, Rocket Auto’s web-page designer embedded the unique code at the bottom of each of the targeted landing pages. Then, each time that page is displayed the tracking system will monitor all of the user’s actions. Google Analytics will even time how long the user stays on the page, and this can be important information.
If Rocket Auto send their visitors a link to a page that is laden with text, but the analytics show that the average user is spending less than five seconds on the page, Rocket Auto can assume that the visitor is not reading the message. On the other hand, if their average user spends 4.5 minutes on the page, it looks as though the messaging resonates with the visitor and they are spending the time to read it.
Putting it all together
At the campaign’s end, Rocket Auto has learned a great deal, such as:
- 4.6% of the recipients went to the landing page and printed the voucher
- 22% had brought the voucher in within one week,
- 45% of those who redeemed the voucher were men over 41
- 68% of the men who redeemed the voucher earned more than $100k per year
Here’s something else: Due to the segmenting effort they put in, Rocket Auto now has a clean list of men in that age group and of that income bracket that have received emails (whether or not they clicked, they did not opt out), which leaves them open to receiving additional offers. Rocket Auto is already queuing up a new sports-car campaign targeted specifically at these men.
What the campaign taught Rocket Auto overall is that spending marketing dollars on buyers that are under $40 and make less than $50k produced nearly no results. It’s pretty safe to bet that since they are buyers (they already made a recent purchase) with a limited income, they simply don’t have the money to add a second vehicle, even with a $2500 voucher. Perhaps they should wait for a year or two before sending them offers to save on their next vehicle.
Segmenting your list combined with targeted marketing and analytics will make you a better marketer. Sometimes the segments aren’t effective with a particular messaging. You might need to send several offers to the same segments in order to ferret out the real details about your customer, but no one needs a scientific study to tell them that messaging on a topic that they find interesting is more effective that bulk mail meant for the masses.