Behavioral customer segmentation is fairly similar to what we just talked about in Phase 1 and Phase 2 segmentation; however, instead of simply looking at how many purchases someone has made, you might be looking at where they live, or what categories or products they tend to buy, as well as predictive fields such as predicted order date or replenishment date.
There are a number of key campaigns that you should be running that are powered by behavioral data. Let's take a look at some of them. Depending on the level of access you have to your data, these can be set up as triggered or one off emails.
You know your product catalog better than anyone else, so it stands to reason there are some clear cross-sell or upsell opportunities based on the products certain customers are purchasing.
One of our clients, BrewUK, a leading provider of wine and beer making kits in the UK, uses cross-sell emails to introduce their customers to a wider range of products. For example, the email on the right is sent 15 days after a customer purchases a product containing the word "extract". These emails have an average open rate of 41.9% and a click rate of 6.7%. While BrewUK has these set up as triggered campaigns, you can create static lists on a monthly basis to do a one off cross-sell campaign if you are unable to access data on a nightly basis, automatically. With cross sell campaigns you should use the following rule set:
If you're a retailer with consumable products, don't underestimate the power of a well-timed replenishment email. Replenishment emails are, unfortunately, the most effective when you are able to trigger them based on each individuals purchasing behavior. If you have to pull data, you may want to wait on replenishment until you have a solution in place, or you can do a one off campaign with the understanding that you might be losing some customers to competitors because you were unable to get in front of them just before they ran out. With that said, you can create a replenishment campaign with a few different sets of rules:
The variables for rule 2 (in both Set 1 and Set 2) should be based on the average product usage rates. It's important to note that Windsor Circle pulls data on each individual customer's buying habits to create a unique timing for each customer. If a customer has purchased from you more than 2 times, they will receive replenishment reminders based on their product order history; however, if a customer has purchased from you less than 3 times, the email will be triggered off the aggregate replenishment date based on all customers who have purchased that product.
Product education emails are another subset of email that you can send to help build a solid relationship with your customers, and, in general, we do see more conversions from these less "sales-y" emails. It's important to note, that these work best as triggered, automated emails, so if you're doing data pulls from your eCommerce platform to get data, you may want to hold off on creating a post purchase product education series. Here are the rules:
The second rule is necessary to ensure that your customers are not receiving these educational emails without having the product in hand. A good rule of thumb is to base the number of days before this email is triggered on average shipping times. Pegasus Lighting implemented product education emails and is seeing 14% click rates and a boost in conversions. Hear from Chris Johnson, Pegasus Lighting's President and CEO, in this short video.
The last campaign where segmentation is going to be important is for one off promotions - these are separate from your weekly emails. At any given time there are certain sales or promos you're running outside of your weekly newsletters. For these, it's important to segment based on criteria, such as location, gender, products purchased (or not purchased), and categories, which is where the Customer Segmentation Worksheet comes in handy. You can use this handout to plan out your segments.