The best-of-breed marketers understand that every contact that they have in their database cannot be treated in the same way.
Segmentation has been one of the most celebrated features of marketing automation, as it allows marketers to organize the data into different groups and send relevant content based on defined parameters.
Segmentation has advanced to dynamic lists in the present times. While static segmentation does not change, dynamic segmentation refers to the approach by which a marketing automation platform moves a subscriber or customer to a segment that applies to them according to their actions.
Static lists include contacts in your database from the time you created a list. As the name suggests, they remain static if there is no manual intervention. Usually, a mass upload or an email tool helps create these lists. Sources can either be tradeshows, offline registrations, or online methods that are not integrated into your website.
Dynamic segmentation, on the other hand, assimilates appropriate data according to which prospects are added in the segments or moved to different lists. Rather than creating new segments over again, dynamic segmentation enables you to keep customer information updated with the latest data.
It is all about targeting subscribers by taking a cue from their behavior and engagement level. This includes advanced segmentation criteria like customer lifetime value, buyer persona, and propensity models, all of which we will talk about later.
Dynamic lists allow you to understand user preferences better and send more relevant content that would boost engagement level. It will not only impart a pleasant experience to the readers but also enhance your email campaign performance.
See how Nordstrom sets a nice example of sending different emails to different segments.
As subscribers can resonate well with the emails sent to dynamic lists, the open rate will naturally be higher and so will be the click-through rate. This will improve sender reputation and email deliverability with a low bounce rate.
With more and more people reading your email, it becomes easier to yield higher conversions and ROI.
The key here is to slice segmented lists into smaller groups and target them according to their interests. Let’s say you have a list of subscribers from the USA. You can break this list further into female and male subscribers from the USA.
That said, let’s move on to explore valuable tips to use dynamic segmentation to its maximum potential.
Simply put, marketing automation is software that moves a subscriber, prospect or customer to a relevant segment according to their actions or the action you want them to take. It involves communicating with users based on their interests and engagement levels.
Marketing automation software records metrics such as:
Time spent on your website or app
Functions they used
Signups for free trials
You can obtain details like the subscriber’s name, email address, and geographical location through the sign-up form. Furthermore, you can get access to purchase interests and other subscriber preferences as they move along the sales funnel.
These software programs let you view real-time data in addition to the charts and graphs that allow you to decide how to invest resources right and amp up the sales.
Basic segmentation starts with understanding subscriber preferences so that you don’t have to blast a generic email to all the subscribers.
Demographics and psychographics are the most worthwhile parameters for effective email marketing. Demographic information includes basic information such as age, gender, and geographic location. Psychographics, on the other hand, include behaviors that consider lifestyle choices and their usual reaction to things in life.
The best question to ask yourself is “What would make the subscriber click?” so that you can place him or her in the correct segment.
Another parameter to consider while segmenting is subscriber behavior. This includes purchase history, what kind of emails they open, app usage history, etc. Also, take note of how they interact with your emails and how often they click or take an expected action.
Some advanced segmentation parameters are customer lifetime value, buyer persona, and propensity models.
This includes recording purchase history and product prices. Once you have the lifetime value of your customers, you can focus on the ones with the highest buying potential. These are technically the people who give you the greatest return on your investment. Additionally, you can remove customers with low buying potential.
Your subscribers have different personalities and behavior. For instance, if your customers reduce their buying frequency, you should try to figure out the factors that might have impacted it. Check their previous interactions and then write a message to suit their behavior.
Propensity models take help in statistical modeling to predict customer purchasing behavior. These behaviors might consider customers’ likelihood to use offers, determine risks in case they unsubscribe and their reaction to cross-sell or upsell.
Dynamic segmentation moves people into relevant lists throughout their buyer’s journey automatically.
Here’s how it can help you.
SaaS owners often promote trial signups to build confidence in the subscribers’ minds and persuade them to buy their premium version. Trial versions allow users to try out a product or service and make up their mind whether it is the right choice for them.
According to Kissmetrics, segmentation can help you increase trial signup conversions as the marketing team will be able to recognize potential leads and filter out the rest.
Suppose a prospective client has subscribed to an online program or crash course, you might have to take more action to encourage the purchase. In such cases, marketing automation will come handy as you will be able to send messages pertaining to the subscriber’s level of engagement.
Automation allows you to tag the user profiles based on their actions and behavior. It also enables the identification of customers who are not likely to purchase a premium service. Consequently, you can apply the 80/20 rule and pay attention to customers who have shown interest in your services by contacting you, asking you questions, or following you on social media.
The most crucial step is to recognize potential customers and nurture them appropriately. Failing to do so will not yield conversions and put all your efforts in vain.
Data onboarding is another step that marketing automation is used for. This strategy helps to add information automatically without asking any other questions. Rather than having an exhaustive form with several questions, you can add data points strategically over time.
This will let you understand your customers better and deliver more targeted and tailored messages to them. Marketing automation, in combination with data onboarding, can facilitate updating the CRM software automatically, which in turn allows you to personalize your services with respect to the profiles.
The strategy of dynamic segmentation not only increases brand loyalty but also encourages existing customers to visit your website again. It also helps reduce churn rate and retain more customers. Thanks to marketing automation, you can slice and dice a database into smaller groups and focus on customers who are most likely to cancel their subscription or stop using services in the days to come.
For marketers who are not yet collecting data on the reasons for people leaving, it is a good idea to ask for their feedback. Alternatively, you should also evaluate their journey with your brand. Look for patterns in their app usage, the time they signed up or the segment they belong to. It will help you figure out some red flags when someone is about to cancel their subscription.
It is quite possible that you might not have the right assumption every time, but you can estimate it with an 80/20 model and have a list of actions that causes subscribers to cancel a subscription 80% of the time. By making use of dynamic segmentation, you can dynamically add users who have taken such actions in a “high risk” segment.
The safest bet is to start with basic segmentation like age, sex, and geographical location and then move on to advanced segmentation. Carry out detailed research on your target audience so that you can do it more effectively and build a perfect email strategy in the long run.
Kevin George is Head of Marketing at Email Uplers, one of the fastest growing custom email design and coding companies, and specializes in crafting professional email templates, PSD to HTML email conversion and free HTML email templates. He loves gadgets, bikes, jazz and eats and breathes email marketing. He enjoys sharing his insights and thoughts on email marketing best practices on his blog.