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Leap Ahead of the Competition with Segmentation & Personalisation

 May 14, 2020

By  Will

Leap Ahead of the Competition with Segmentation & Personalisation

Segmentation is super important for any business, and is step towards communicating with your customers on a more individual basis. As you’ll find out in this article, getting basic segments in place is really easy, your ESP probably has the functionality, but if you push the right data in you can create your own as well.

Outside of marketing communications, segmentation is also really useful for telling you who your most valuable customers are, allowing you to target more of your advertising spend at those segments.

Personalisation takes things a step further, and involves speaking to your customers on a 1-to-1 basis. But it’s not just about addressing them by their first name at the top of an email, it takes into account all the factors that engage with an individual. Product recommendations, timing of the email, or even changing the navigation options to their favourite categories.

Data is king, and the companies who use it properly will make huge leaps ahead of those who don’t.


What is Segmentation?

Segmentation is where you want to send a message to a group of customers who share similar characteristics. For example you might want to send to all Male customers, or UK customers, or customers who bought in the last 7 days, or Male customers in the UK who bought a t-shirt in the last 7 days.

By creating a segment with these filters, you’ll create a list of customers.

Omniconvert actually do a fantastic job of this with their newsletter optin by getting you to tell them exactly what segment to put you in.

This is where personalisation then comes in. Personalisation is about giving each individual the best possible experience for them. You know from the above example that we’re looking at UK customers, so most people expect to pay in £. However, you might find that you have customers who have specifically selected $ as their currency (maybe they’re an American in the UK and chose to pay with their American card).

Then, you know from the data that Charlie solely buys blue t-shirts, Eric only buys V-necks, and Pete has only ever bought 1 t-shirt from you.

Personalising the email would probably involve showing Charlie loads of blue t-shirts, shirts, jumpers, Eric gets offered the latest v-neck t-shirts, and because we don’t know so much about Pete we can offer him a wider variety, and see if his next purchase gives us better insight.


Why Should I Segment?

Segmentation helps you understand your customer base. If you’ve got customers from all over the world, and sell a huge variety of products ranging in price from $10-$10,000, how on Earth can you communicate with your customers properly if you’re not segmenting them?

What do you put in your emails if you think your customers spend on average $1,500 when in fact you’ve got thousands spending $50-100 and dozens spending $8,000-10,000.

To give you a real world example, at Furniture Village I could be buying a sofa for over £5,000, or I could be buying a few cushions for the sofa I already have.

By segmenting the list you could see that I’ve bought cushions. Furniture Village would know I haven't bought a sofa from them, but the cushions I have bought imply I have one. So they could tease me, try to sell me a sofa anyway, or they could say well why don’t we try selling him an armchair, or some other accessories first.

The point is, by segmenting, you can use explicit information to communicate with someone using the data you can imply from that.

You can segment on Demographic data such as gender, age, income, marital status, family size etc. Or Geographic data; which country or city they’re in, are the rural or urban. You can also use psychographics which looks into social class, and personality traits, and finally there are behavioural segments, such as frequent buyers, low value buyers, high value buyers etc.

Plenty of opportunities, but of course, it depends what your business does, and how established it is, and if you’re new to segmentation just keep it simple. Some basic segments such as recent buyer, (using the furniture example again) it could be sofa buyers and non-sofa buyers, frequent buyer, and newsletter-only.


How Can I Segment?

Well, fortunately most ESPs have built in functionality for this. It’s very easy to create the demographic and behaviour based segments in tools such as Klaviyo, because you push the data to it. Every customer who buys from you immediately has their details pushed into Klaviyo and you can use pre-set segments to run automated campaigns, or when you’re setting up your ad-hoc campaigns.

Another way you can segment is using tools like Omniconvert, which can give you an unbelievable amount of in-depth insight into your customer base. If you really want to take your segmentation to the next level then RFM is the way way to do it.

RFM if you’re not aware, is Recency, Frequency, Monetary. So basically you’re segmenting your customers on how recently they made their last purchase, how frequently they purchase, and how much they spend with you compared to other customers.

RFM allows you to find the most valuable customers, mid range customers, new customers, and customers who are not likely to come back on their own, and you can then use this data to personalise the experiences for each of those groups for the best possible communications.

Not only is this data fantastic for personalising communications better, but you can also create marketing audiences from this list to plug into the likes of Facebook, and find more customers just like them. 


What About Personalisation?

So we’ve covered segmentation, but what about personalisation?

Once you’ve got your segments sorted, you want to look into how you can tailor each individual person's experience in the best way possible.

The place most people start is with {first_name}, which yes, technically is personalisation, but it’s such a bare minimum it's not even worth mentioning in a strategy...when considering the body of an email at least. In the subject line go for it, it actually works really well in my experience, and few brands use it. 


What Should I Personalise?

There are no set rules on what you can and cannot personalise, but look for the middle ground. Just personalising first name isn’t enough, and using £ instead of $ is just expected. At the same time, telling someone the product they dreamt up last night is suddenly available just for them is a bit creepy. You get what I mean right? There’s a certain level of personalisation which just becomes a bit too much.

An incredible 72% of consumers say they’ll only engage with personalised messaging, while 91% say they’re more likely to shop with brands that provide personalised offers and recommendations.

So, what are some good examples? Well, not Amazon apparently.

As mentioned earlier, use previous purchase behaviour to personalise future emails. 

At Readly we’d let people know everytime a new issue of a magazine they were reading came out, we’d also let them know when similar magazines came onto the platform.

At Ubeeqo (Europcar group), we’d let people know if the car they like to use is available, with a suggested booking which was similar to bookings they’d made before.

At Gamesys we’d run promotions on specific slot machines, and use a customer's favourite game creative more in emails.

It doesn’t have to be a huge amount of effort and work, and you don’t have to build huge complex algorithms to populate dynamic content tiles.

Let’s say you run a video game site. Someone comes along and buys an Xbox. Great. You could get away with using that as the only piece of data you use for personalisation. This person has an Xbox, so when showing games in emails, use the Xbox creative, not the Playstation. You could take this one step further and identify 1-2 key game categories they purchase, and so recommend horror and action games to them instead of strategy or sport. 

Just don’t be too specific with your categories as you risk limiting your options too much. Targeting someone only with third-person shooters with a Sci-Fi theme and has a co-op function would severely limit your ability to provide options.

As Adam Kitchen from Magnet Monster mentioned on my Podcast, Customers Who Click,  ‘people will open the message if it's personal and relatable to the information they’re looking for’.


How Do I Get Started?

If you’re relatively new to this, keep it simple. Take a step back, look at your customer base and come up with a handful of key segments you think are worth separating out, just 3-4 is plenty.

Then look into the personalisation, can you set up some tags for favourite categories, give them information about their local store, get their name in the subject line (it grabs way more attention than in the body), if you’re B2B or just more service related you can personalise the sender name of an email so that it looks like it’s come from someones account manager.

It’s really not that difficult to get the basics in place, just don’t worry about what other companies are doing, and don’t get overwhelmed by analysis paralysis and the wealth of opportunities that are out there for personalisation.


If you want a no-BS chat about segmentation & personalisation just book a call and I’ll help you get on the right track.

Will


Will is a Customer Journey Marketing consultant, specialising in CRO, CRM and Customer Experience. Will has over 7 years experience working across a range of consumer facing businesses and has worked for huge brands such as MyVoucherCodes, Europcar, JackpotJoy, Virgin Games and Virgin Bet.

W,Laurenson

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