Breaking down a company’s customer base into segments and sub-segments can help direct marketers develop campaigns that are more compelling to their audiences.
“We started e-mail marketing in 1998, where we sent one e-mail, mostly text even though we are an art company, to every address we could get our hands on,” said Mitesh Patel, director of software and technology for Art.com, at eTail 2004 in Fort Lauderdale, FL. “Over time we learned from our experiences and we’ve come a long way and we continue to learn.”
One lesson learned was the importance of segmentation. The company’s segmentation efforts, however, went beyond demographics. Patel said he and his company wanted to find out as much as they could about their customers.
“What have they bought from us? How large are their orders? What promotions did they react to positively in the past? What coupon codes did they use and where did they get those coupon codes? Did they open previous e-mails. What links in the e-mails did they click on? What did they do when they came to our site? Patel said.
Not only does e-mail help Art.com attract new customers, it helps to convert them. It helps to retain and enhance relationships with existing customers.
“And the analysis of campaign results not only helps us improve future campaigns and messaging, but more importantly helps us to determine new products – the latest products and promotions that our various customer segments are interested in and will react to,” Patel said.
Additional analysis can help the company rank customer segments further according to importance – including their tendency to buy art and a customer’s lifetime value.
“Once we learned the importance of segmentation, we learned that that’s not enough – it goes deeper than that. There are multiple levels within these segments,” Patel said, adding that sharing his company’s segments and sub-segments won’t matter to other companies.
“For your industry, for your business, you really have to determine the customer segments on your own and what messages and promotions resonate best with those segments. Once you understand these segments, you can find what products are important to those segments. Different promotions do have a different impact to different customer segments,” Patel said.
“The overall goal is to make the learning and buying experience for the consumers as pleasant for everyone and cater effectively to their needs as much as we can. They have different tastes and that’s what you have to cater to,” he added.
