Segmenting customers and prospects hinges on collecting and integrating click behavior and other data.
Marketing segmentation groups your customers or prospects base into segments of customers with similar needs and behaviors. Once you have defined key segments, you can tailor product offerings, marketing strategies, and sales approach to meet the specific requirements of the segment.
However, many B2B companies don't segment at all. Often, B2B companies copy segments that seem to work for competitors, but don't allocate sufficient resources to define the right segments.
Some companies believe that segmentation reduces the number of available prospects when there are so many potential buyers outside of these segments. However, this view discounts the opportunity cost of working to convert lower-value prospects with much lower conversion rates than the high-value customers within target segments.
Developing an effective segmentation strategy has proven to be the key to maturing your e-mail program and growing your revenues. However, it seems that B2C customer segmentation always receives the attention.
This column aims to change that with a discussion of B2B e-mail segmentation strategies that can help you grow customer engagement, leads, and revenues.
Getting started with segmentation in e-mail is easy. Begin with the data you have and then develop a plan to integrate more and more data into your e-mail program.
Strategy 1: Utilize E-mail Click Behavior
Start with click data from your e-mail service provider. On average, subscribers who click will click on one to one and a half links per e-mail message. Identifying which specific link or links they click on will give you an excellent indication of what they are interested in or whether they are "in-market."
Then, classify your links into categories:
This can be as simple as identifying which links indicate they are close to the sale ("buy now") and identifying which links indicate the subscriber needs more time and information to make the purchase ("learn more").
More sophisticated segmentation strategies categorize links by product type, service-related offerings, or likely product/service attachments to gather insight into which subscribers are eligible for a follow-up contact.
Strategy 2: Leverage Website Analytics
Next, leverage website behavioral data from your Web analytics partner. Offerings from major Web analytic service providers, such as Adobe's Omniture, IBM's Coremetrics, and Webtrends, can provide you with actionable subscriber data, such as what product category or page the subscriber last browsed, abandoned, and/or purchased.
This data can be used to segment your ongoing e-mail programs and develop highly relevant triggered lifecycle programs. For example, if a subscriber has recently browsed Web pages related to a highly specialized digital printing solution but hasn't yet inquired about it, you can promote a case study about your solution to that subscriber using dynamic content in your newsletter.
In addition, you can trigger a lead nurture program to address key product features and help your sales organization address significant barriers and milestones in the sales process.
Consider these triggered follow-up program ideas:
Strategy 3: Integrate Past Purchase Data
Integrating past purchase data is an effective strategy but can also be technically complicated. This data is often housed in multiple sources at your company, and it does not offer you a holistic view of your customer or prospect.
One of the first strategies is to focus on recency, frequency, and monetary value (RFM) of your customer's purchases by product line. You may concentrate on one, two, or all three of these elements for segmentation.
Recent customers are the most likely to buy again for low-involvement purchases or are eligible for accessory attaché or cross-sell messages when it is a considered purchase.
Frequent purchasers are likely highly loyal and are eligible for upsell messaging. High monetary value customers are likely some of your best potential long-term customers. Design programs to retain them.
Good planning is necessary to take past-purchase segmentation to the next level. Once you have a good handle on the best predicting variables for good customers, you can develop a data warehouse to help you analyze your customer and prospect base for the propensity either to buy, to buy again, or to defect.
The Last Word
A good segmentation strategy is the best way to mature your e-mail program and quickly grow your high-quality leads and revenue. Once you have identified the key segments that you plan to address, your next step is to identify how the content should differ for each segment.
This combination of effective segmentation and good use of dynamic content allows you to deliver highly relevant content with your subscribers while keeping the content production process manageable.
When you succeed at this, you will realize the increased engagement and satisfaction from your e-mail subscribers that leads to more sales and revenue.
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Mike Hotz is a senior strategic consultant for Responsys, working with clients to design, develop, and execute cross-channel digital marketing strategies that contribute to their cross-channel digital marketing success. As an industry veteran, Mike has worked in e-mail marketing since 1998, designing, building, and executing e-mail and multichannel direct marketing strategies focusing on increasing customer engagement, nurturing leads, supporting sales organizations, and driving revenue for companies such as CDW, OfficeMax, Grant Thornton, and Digitalwork.com.
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