Segmentation allows you to tailor your messages directly to the needs of different types of customers, ensuring that they’re receiving content or offers that are relevant and engaging which can trigger a higher chance of a conversion.
Understanding Mailing List Segmentation
Mailing list segmentation is the process of dividing contacts on a mailing list into smaller groups based on similar characteristics or behaviors. This enables marketers to send more targeted marketing to each group with more relevant messaging.
By doing so, marketers can increase the effectiveness of their email campaigns, resulting in higher open and click-through rates. For direct mail marketing, this can help increase response rates, whatever the call-to-action is.
Benefits of Segmenting Your Mailing List
Mailing list segmentation provides a number of benefits to direct mail and email marketers. By segmenting your mailing list, you can:
- Target specific customer groups with relevant messages
- Improve engagement and conversions by providing content that is tailored to customers’ interests
- Save time and money by eliminating unnecessary emails or print material
- Monitor how different segments are responding to your marketing to use for future segmentation
Types of Mailing List Segmentation
There are several ways to segment a mailing list. The most common types include demographic, psychographic, geographic, and behavioral segmentation. However, based on your specific business and the type of marketing you plan on sending, you can segment your list using other parameters as well.
Here’s a deeper explanation of the different types of segmentation:
Demographic segmentation involves dividing customers into groups based on age, gender, income level, or other demographic characteristics:
- Age segmenting is usually used when you have an offer specifically geared to a specific age group. For example, sending a marketing piece for a swimming pool or a BBQ to only the segment of your mailing list that is 30-55 in age.
- Gender segmenting is popular with companies that sell products or services that are dedicated to men or women. For example, a company selling beauty products will most likely want to sell to women.
- Income level segmentation would be applicable when sending offers for high price items. For example, a luxury car company would likely send its marketing to high-income earners. On the flip side, a discount clothing company might want to avoid that segment.
- Other demographic characteristics could include marital status, education, whether the recipient has children, etc.
Psychographic segmentation organizes contacts based on their values, interests, lifestyle choices, and attitudes:
- Values could include their religious affiliation, political affiliation, donation history, and more. For example, the Republican party would want to mail to those who’ve historically supported the GOP.
- Interests, lifestyle choices, and attitudes can include virtually anything and the best way to segment a list would be to look at similar interests with regard to your product. For example, someone marketing a product for hunting would probably want to segment anyone who has shown an interest in the outdoors, nature, fishing, camping, etc.
- Geographic segmentation divides the mailing list by location or region. For example, if your marketing call-to-action is to visit a specific location, you want to select only the segment of your list that resides within a close radius to that location.
Behavioral segmentation divides contacts based on how they interact with marketing—such as opens and clicks for e-mail.
For both e-mail and traditional direct mail, segmenting out previous buyers is extremely valuable as anyone who has already made a purchase with you has a higher likelihood of buying with you again.
Factors to Consider When Segmenting Your Mailing List
With regards to email marketing, segmenting your list can be optimal because there’s the little cost compared to direct mail (where print and postage minimums could impede segmenting to a small level). So, when segmenting your email list, you can make as many segments as you, please.
Just remember that you should have a specific offer that is going to each segment. The change in the offer could simply be a tracking code change or it could be a full-blown creative change.
You can also randomly split your list to try different creatives to a random split of your mailing list. This random A/B split testing is a great way to track specific offers to equal segments of your list.
For direct mail marketing, depending on your mail quantity, you might only want to test a few segments. Print and postage costs usually go up on a per-piece level with fewer quantities, hence why you should keep the segmentation minimal. You also won’t be able to track metrics like clicks and opens, so your response could be the number of orders returned, calls taken, website visits, or whichever metric matches to your call to action.
The key point here is to ensure you track your response for each segment. You’ll want to see how well each offer or creative does to each part of your list so that you can use the data to further hone your marketing.
Collecting Data for Segmentation
For your own internal house list, the best way to collect data is through customer surveys. Ask questions that will provide valuable answers. Some will be simple like birthdate, location, marital status, and gender. Others might be more probing like interests, religious affiliations, education, etc.
As said before, one of the most valuable segments is your current buyers. This data should be readily available to you. You can also segment out active buyers or expired buyers if you have a subscription-style product.
When renting mailing lists or renting creative space on other email lists, you may be given an opportunity to select specific segments for an extra fee. These are aptly called “selects” and while it can increase the cost of your campaign, it can also reduce wasting your marketing messages on demographics that are obviously uninterested.
By segmenting your mailing list, you can maximize the effectiveness of your email or direct mail marketing efforts and ensure that each customer is receiving messages tailored to their specific needs and interests. If done right, this can lead to increased engagement with your brand and higher conversion rates. Let the experts at North American Media guide you with your next direct marketing campaign. Click here to contact us today.
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