Customer segmentation is one of the most powerful tools for retailers. But there are significant challenges marketers need to overcome before they can feel confident they’ve built out a solid segmentation program. The marketing teams that we work with often describe a balance they must strike on three fronts, between customer demands, creative bandwidth, and merchandise needs.
Creative teams are often stretched thin, and finding the resources to write and design the additional, high-quality emails needed to ramp up customer segmentation can be a struggle. Merchandise teams often make their own demands on marketers’ campaigns, while each customer has feelings of their own as to what they want to buy.
We’ve heard this challenge described as threading the needle, and recently hosted a webinar where our co-founder Corey Pierson talked through some of the ways leading retailers can pull off that marketing feat.
In theory, what the customer wants is the most powerful motivating force for marketers. As a marketer you know that some customers are interested in certain product categories and others are interested in other product categories and you want to send each segment the most relevant content. One common (and very effective) segmentation method is sorting by predicted lifetime value (or customer spend). Understanding who your best, better, and top 1% (platinum) customers are will help inform specific product recommendations.
See more on how leading teams are using Average Order Value (AOV) and predictive persona analysis to segment customers by their wants and personalize emails accordingly.
However, customer needs are not the only factor that needs to be taken into account. Having enough great creative is often a big challenge when teams look to increase personalization. Where before they were sending one email, teams are tasked with sending two or more versions to cater to specific customer demands.
See how Backcountry uses modular content to decrease the creative lift required for dynamic email segmentation.
Finally there’s the merchandising needs. Sometimes, for a brand that’s selling their own goods it’s an internal merch team saying “we really need to push a certain category right now.” For other companies that sell a variety of brands it’s contingent upon what’s on clearance or perhaps there is a co-op deal in place with one of those external brands.
Learn how one retailer was able to use predictive product affinity to uncover customers in their database who are likely to want a particular item that needed to be pushed by marketing.
Watch the replay and get the deck below
Corey goes into greater detail on the relative importance of email vs. other channels, how good a/b testing fundamentals are the backbone of great segmentation, along with an in-depth question and answer session. You will also hear from Borderfree’s Sr. Director of Client Strategy and Operations, Mike Griffin who discusses how retailers sell in multiple international markets can use segmentation to great effect.