As marketer I’ve grown in my appreciation for the value of segmenting the contacts that are added to my email lists. In fact, just last week I created a very sophisticated email list segmentation framework for Member Master to ensure that my membership websites can accommodate the sales funnel and user customization that I know will give me the highest conversions.
After completing that integration, I thought it would be useful to offer some background on why it’s so important, and how you can approach list segmentation in your business.
My first encounter with segmentation came as I marketed a product to owners of SUVs back in the mid 1990s. I discovered that there are companies whose entire business model is to maintain large lists of individuals, addresses, phone numbers and so on along with a type of meta information, such as where they shop and what car they drive. They even claimed to tell me that I could target owners of a specific model SUV within a zip code region. Wow.
In internet marketing, segmentation takes many forms, including targeted search traffic, strategic joint ventures and, quite importantly, segmenting your own email lists. The most successful marketers manage their email lists in such a way that they can send different messaging to each lead, prospect and customer.
Desired benefits of segmentation
Profit should be the focus behind segmenting your email list. When done properly, segmentation can allow you to craft messages and offers that are most likely to be accepted by a group of people.
Many of the best sales people will tell you that every pitch is individual. While that’s not possible (strictly speaking) in direct marketing where an offer is being presented to thousands or even millions of people, the aim is to get ever closer to a customized pitch for each prospect.
Technology is becoming more and more sophisticated in its ability to deliver unique, personalized messages to each person on your list, which gets you closer and closer to the individual pitch that sales professionals know closes more sales.
At the same time, you run the risk that you’re messaging becomes unnatural and contrived. Just because technology allows you to insert customized variables, such as name, email address, dates and so on, doesn’t mean that it will enhance your message.
Always run your messaging through your ‘real person’ filter. By that I mean that technology should enable communication, not define it. Don’t do something just because you can, make sure that it ends up looking like something that one real person would actually send to another person.
As we look at the spectrum of uses of technology, there are extreme cases. Some marketers put everyone that ever showed interest in their product on a single list. Whether they buy one offer or another, they stay put on that one single list. Other marketers create labyrinthine frameworks that infer interest based on every click in an email, thereby changing the future messaging for that individual.
Neither extreme strikes me as being effective. In the simplistic single list case there are many missed opportunities where individualized messaging might better resonate with a group. In the second case there is an assumed intimacy that rarely exists between a marketer and a group. In other words, it’s difficult to verify that what you assume an individual is thinking when he clicks one thing and not another is accurate.
Problems with multivariate testing
Which brings me to the vagaries of multivariate testing. In it’s simplest form, testing takes on an A/B question. Two options are presented to large populations and whichever form, A or B, produces the highest response is considered the winner. Typically an A/B test will involve the change of a subject line or an image with all other elements remaining fixed.
On the other hand, if you attempt to test a simple combination of Headline and image, assuming you have two of each, you now have four possible combinations. With four possibilities, the number of people that see each one shrinks. Smaller groups make the results statistically more difficult to distinguish. As a result, the more intricate your triage process the more opportunity for error.
The good news is that most autoresponder services provide built in mechanisms for sorting through your lists and communicating in both broad and specific ways. When you’re evaluating email services, make sure that the type of segmentation you want is easily accommodated with the solution you choose.
Email list segmentation is an integral part of effective marketing. Finding the proper balance of segmentation and ensuring that your criteria for sorting an individual into one group as opposed to another are effective will require finesse and careful attention. In every case, the outcome is almost certain to be market dependent and so for each new market approached you should expect a settling time to find an effective groove.
As I mentioned, my reason for writing this article is that I just finished extending one of the better membership frameworks available for WordPress to accommodate segmentation. Segmenting visitors, from free members from premium members is a key component to building an effective sales funnel and retention strategy for any membership website.