Drip Marketing, Marketing Automation, ActiveCampaign, Zoho

14 Ways To Segment Your Customer Database – Part 2

By on Jan 26, 2009 in Drip Marketing | 2 comments

Curioso elemento el tiempoHere are the last 7 ways to segment your database. (Go here if you missed Part 1.) There are many more than 14 ways, but these will get you started. Niches lead to riches. The more niche markets you discover in your database, the more compelling your messages are when you talk to customers.

  1. Email Click Thru’s – Code your database with the results of your email marketing efforts. Prospects who click thru on hyperlinks in your messages are more valuable prospects than those who don’t. (Swiftpage is one of the few email service providers that gives you contact-centric results over time, as opposed to campaign-centric results. It’s like having a complete picture instead of individual puzzle pieces.) Clickers are more engaged with your information.
  2. Geography / Territory / Time Zone – When capturing opt-in leads from your website, sometimes all you get is a name and email address. While you don’t want to ask for too much info on an opt-in form, at least ask for some geo-identifier, such as a state or area code. While you could program an IP address to fill this in for you, many times you’ll get the IP address of the ISP, not the prospect. Geo coding allows you to personalize promotions. For example, I like to omit my St. Louis list from distribution for some of my communications.
  3. RFM – This classic direct marketing segmentation routine still works. RFM stands for recency. Recent buyers (customers who purchased in the past 30-, 60-, or 90-days are significantly more likely to buy again than a customer who hasn’t purchased in 6 months or more. This is why you get a boatload of catalogs when you buy via mail order and why you’re emailed every minute (!) when you purchase online. Frequency. Buyers who purchase frequently are our bread and butter. They should be flagged. If we can sell them one more time per year, we add signficant profit to the bottom line. Monetary. Customers who spend the most with us should go to the top of our customer care program. All other initiatives should encourage other customers to rise to that level.
  4. Pareto’s Principle of 80/20 – Pull a report of all customers who bought something from you last year along with how much they spent. Calculate 80% of the total sales for the year and determine which customers contributed that amount. These are your “A” customers. Now keep going till you identify the next 10%. These are “B” customers. Identify the next 10% and mark them “C” customers. Make everyone left a “D”. Now ignore the Cs and Ds and focus on the As and Bs.
  5. Buyers by Product – Customers are notorious for only knowing about some of our products and services. Use this segmentation for cross-selling customers on your company’s other items.
  6. Sales Stage – Most companies have a sales process that is the basis for forecasting sales for management. When a prospect gets stuck in the same stage for awhile, he may not be ready to move forward. In fact, he may have actually slipped backward. Rather than having a salesperson drive him crazy with “are you ready yet?” follow up calls, divert this prospect to a nurture marketing path.
  7. Lost Business – As good a salesperson as you are, you probably didn’t close every sales opportunity you had in the pipeline last year. Code the ones you lost. Follow up to see how the vendor of choice is treating them.

Now that you’ve got 14 different ways to slice and dice your database, you’re ready to find out how to talk to each niche. Next week I’ll show you how to use your segmented database to have more meaningful conversations.

P.S. Can you think of any niche markets I missed? Please leave me a comment with your ideas.

    2 Comments

    • Thanks for the mention. Database segmentation truly is the secret sauce in successful database marketing. People know this intuitively, but often overlook it in practice. – Lori

      Lori Feldman

      February 19, 2011

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