Customer segmentation is exactly what it sounds like. It is the act of dividing your customers into cohorts based on any number of criteria. Unfortunately, customer segmentation can be difficult if you don't have the right tools available to you.
Why all the hubbub around customer segmentation? Narrowing the focus of your marketing campaigns and ensuring you're sending the right content can help you increase email open and click rates, boost conversions, and better engage your audience. In fact, our friends at MailChimp found that segmented messages see a 13% higher open rate and a 52% higher click rate, when compared to average engagement rates of non-segmented, promotional emails.
We've all been there, pulling data from the back end into a .csv file, manually segmenting the list, uploading it into your ESP, and doing this on a steady, on-going basis. Obviously, this is not the most scalable process, and I'll bet that you would rather be doing just about anything else. So, just to quickly clarify, when we are talking about customer segmentation, we are not talking about this manual process, we are talking about using software and tools to do the heavy lifting for you. When it comes to customer segmentation, many ESPs allow you to segment on a few pieces of criteria. The most important part of customer segmentation is understanding what data you need in order to be effective and having that data in a readily available format.
When we talk about customer segmentation, you can apply it to many different types of campaigns. At this point, your content calendar should be set for the year, so it's important to understand which customer segments should receive each promotion. To that end, we've put together a worksheet you can use to help guide the process.
You can use this worksheet to map out what criteria you want to use for each marketing campaign. Looking for segment examples? Make sure to check out the following resources or download the customer segmentation guide.
Next, we'll walk through how to set up a simple segmented newsletter. If you have less than 50% retained customers (3+ purchases), start with phase 1 segmentation, if you have over 50% retained customers, feel free to move onto phase 2 segmentation.