Taking List Segmentation to the Next Level

For marketers eager to boost their email marketing results, list segmentation has become the leading strategic approach. The more data you can collect about prospects’ tastes and behavior and the better you can apply that information to targeted marketing, the better your results.

As the key trends and predictions for 2013 show, segmentation is high on many experts’ lists as the area to which email marketers should focus attention. At the same time, the art of segmentation is advancing as marketers develop more sophisticated approaches, including the use of predictive analytics and the harnessing of big data for more refined targeting.

Summing up the results of a Lyris’s recently released “2012 Digital Optimizer Report,” Emarketer.com found that, “For email marketers, segmenting consumers based on their characteristics-and targeting accordingly-is not only a top goal, but one which they have begun to master.”

Lyris’s survey was based on U.S. digital marketers with monthly volumes of at least 50,000 emails. Asked what techniques they used when engaging in these email campaigns, 85% cited list segmentation and targeting. List segmentation also was considered the most successful technique, with 80%-nearly all those who used targeting-reporting the tactic as effective.

The use of “static” demographics was found to be way ahead of other methods used by marketers to segment their lists. On the other hand, marketers were not heavily segmenting based on past consumer behavior, such as purchase history or email performance metrics. Lyris saw marketers lagging in the use of these types of “dynamic” behavior to segment and target, noting that information such as type of purchase, website activity, and amount of purchase “are more effective list strategies because they are behavioral in nature.”

Lyris questioned whether marketers had the tools and expertise to effectively segment lists using dynamic data based on consumer behavior. As eMarketer notes, harnessing “Big Data” is a well-established priority in the digital marketing space, and one that poses as many challenges as opportunities.

An Aberdeen Group study entitled “Divide & Conquer: Using Predictive Analytics to Segment, Target and Optimize Marketing” also found that customer segmentation and targeted offers were the leading strategies cited by a majority of marketers to improve their results. The study also pointed to the collection and application of big data as key directions going forward.

The tough economic environment is putting pressure on marketers to differentiate their offerings, the study found. To segment prospects, marketers are building unique customer profiles and buyer personas to support targeted marketing. Top-tier marketers, which the study called Leaders, are able to differentiate themselves via a superior ability to customize the offers they make to individuals.

Leaders also harness and utilize more data-including social media data, emails, instant messaging transcripts, call-center transcripts, wikis, and more-to predict behavior. Leaders apply behavioral scoring to customer data to improve their results, and also excel in the ability to use insights gained from predictive analytics to enhance customer experiences.

The ability of Leaders to gain deeper understanding of prospects and customers, target marketing offers more precisely, and deploy the skills at their disposal more wisely, all contribute to significant differences in performance, the study found.

As these studies and the insights of experts show, leading-edge email marketers are taking segmentation and targeting to the next level through the use of the latest trailblazing techniques, including dynamic behavioral data, big data, and predictive analytics.

Big Data, which includes the ocean of social media data available, and more, is proving to be a valuable source for obtaining information for more sophisticated segmentation and targeting. Social media monitoring, behavioral tracking, and demographic appending all are ways of gaining more useful information for segmenting and targeting prospects and customers.