Republished from Infusionsoft Blog May 20, 2016
Dear <name>,
Remember my awesome product? It’s still for sale. Click here to buy!
How many of these emails do you receive every week? OK, now think about how many of those bland email offers you actually act on. Probably not too many. But think about how you feel when you get those offers from companies from whom you’ve already purchased.
It seems like after you become someone’s customer the emails they send should take a different tone, doesn’t it? Which is exactly why you should email your customers different things than you email your prospects.
Segmenting your email lists is an excellent way to simultaneously reach a large number of prospects while sending a more personalized message than “You can buy our things!” And just like you segment your prospects, you should segment your customers.
Did you hear a little record scratch just then? It’s OK if you did. Let’s walk it back and first examine just what segmentation is and why it’s basically the best thing since bacon, and then we’ll have a chat about the advantages of customer segmentation.
What is customer segmentation?
Customer segmentation—aka list segmentation—is the act of intentionally subdividing your email list into any number of smaller lists that are determined by, well, whatever you want. It’s all about reaching the right people at the right time on the right channel and intentionally showing care to nurture the existing relationship.
Why is dividing your lists the best thing since bacon?
People love things with a personalized touch—in fact, 86 percent of consumers say that personalization plays a role in their purchasing decisions. And we don’t want that personalization to go away as soon as someone gives you their money—that’s just the beginning of what will be a beautiful friendship.
How to use segment customers the smart way
Here’s the great thing about emailing customers: Since they’ve already given you some money, there’s already a relationship. You don’t have to try to start anything from scratch—they know who you are. Here are some ways to use customer segmentation to get even more results.
Segment by sentiment
The unfortunate reality of business is that some customers just aren’t super happy, and that’s OK; you can fix that. But you probably want to talk to them differently than you talk to people who are happy as clams. For instance, if you’re looking for advocates to help you spread good news like a product launch or to refer a friend, you probably don’t want to ask that of people who have negative sentiments about your business.
So if you segment by customers who are happy, neutral, and dissatisfied, you can send an email asking for referrals to the happy customers. In an email for dissatisfied customers, you might include a link to make an appointment for a free training or support call.
Segment by persona
Perhaps you segment your leads by buying persona, which is an excellent segmenting strategy. Whether you do or not, segmenting your customers by persona is still a clever way to make sure you’re shaping your message for the right audience.
If you have an offer you want to send to all your customers but want to maximize its impact, shaping that same offer slightly differently for each persona can help your success rate. Let’s say you want to offer a free webinar. You might know that one persona always wants more time in the day, so you’d position your webinar as one that will help them be more productive. If another of your personas is always worried about losing time, you might emphasize that the same webinar will save them hours every week. Same webinar, different message, more results.
Segment by RFM
RFM stands for Recency, Frequency, and Monetary, and you can analyze for this by looking at how recently someone purchased, how many purchases they make over their lifetime and the total dollar amount of those purchases. RFM is based on the idea that 80 percent of our business comes from 20 percent of your customers, and you want to maximize that—so long as you aren’t aggressively targeting that 20 percent that they get fed up with you.
For instance, if you had a restaurant and people came back an average of every 45 days, you could come up with a targeted email campaign to try to lower that to 30 days. Or if you see that you have a customer who’s spent, say, $5,000 with your business since their first purchase, you can come up with a loyalty reward. Sort of like airline rewards programs—those who fly the most miles in a year get way better treatment than the plebes who only fly occasionally, but it keeps people dedicated to one airline in order to get those perks.
If you want to score your mailing list for RFM, you need to look at three things:
- Date of their last purchase
- Number of transactions within a set period of time (usually a year)
- The total or average sales attributed to the customer
By sending specific emails to those you segment by RFM, you can target your messaging to loyalty and perks and get more interaction than you would with customers who aren’t as engaged. Want to get them more engaged? That’s where segmenting by persona (above) can help.
Segment for amplification
If you have a social or ad campaign and you want to attract eyeballs, send out an email to your most engaged customers asking them to view and share. You can even ask them to be like a stealth street team and get them to recruit more subscribers (daily newsletter The Skimm does something similar with Skimm’bassadors, who spread the word about The Skimm by wearing swag, organizing events, and giving feedback; in return, they get their birthday mentioned in the morning newsletter). This works best with the most engaged group of your customer list, and can help freshen up your email content as well as getting more attention for your campaigns. #win
Segment by lead source
An excellent—and even shrewd—way to segment to resonate with your email list is to segment by lead source. This is sort of a “hidden” way to segment: By tracking your lead sources, you can determine where they are when you reach them and how they like to be talked to. For example, what if you sent out a coupon in the paper? That’s right, not over the World Wide Web, but in a physical newspaper. Say you chose five local publications and noticed that 80 percent of your respondents came through only two of those publications. Then you know where your target audience is, what they read, and what they respond to.
You can also do this a bit more overtly, for instance creating a special email list for customers who originated from a certain trade show or event. You can really personalize your message when you know where they’ve come from.
Let your customers self-segment
Customers can self-segment if you have a preferences hub for your email. So if customers can log in and tell you what kinds of email content they’re interested in receiving from you, you can deliberately create exactly the kind of content they want to get more response.
You could also ask customers to self-segment: Send an email with two to 10 links in it, and ask people to choose the topics they’re interested in learning more about. Based on their clicks, you can place them in specific nurture campaigns or tag them with a specific interest for future education.
The segmenting caveat
Segmenting for customers or leads can be a really exciting rabbit hole to follow—it’s really hard not to get thrilled about giving people exactly what they want. But since there are so many different ways to segment, be careful not to fall into the trap of creating a bloated database. Segment too many ways, and ultimately your segments will become useless. So it’s vital to determine the most valuable ways for your business to segment, and pursuing those vigilantly.
Ellis Friedman
Ellis has spent a lot of her adult life chest-deep in small business adventures, especially the year she spent opening the Beijing branch of a Shanghai-based air purifier and lifestyle business. Most of her experience stems from her diverse media background in film, magazine publishing, blogging, and photography, but she’s also a published author and Infusionsoft’s blog manager. Ellis has an idiosyncratic fondness for grammar, style, and sarcasm, and fills most of her time away from the keyboard tasting scotch whisky, traveling abroad, and hiking.