Don’t knock it ‘til you try it.
Let’s start with the basics. What is segmentation anyway?
If you’ve never heard the term “spray and pray”, let’s break it down: spray and pray is targeting as many of people as possible and hoping for the best. In sales, it’s robo-dialing, cold-calling with a standard script, and knocking on every door; and of course, all the while, hoping for the best.
Sometimes the strategy of spray and pray works, but mostly it does not.
Segmentation is akin to bespoke tailoring; it’s not for everyone, but it’s for you – to be clear, it’s not kind of sort of for you, it’s really, really for you. In sales, it’s parallel to the highly specialized consultant that knows what you need to make your life easier.
Sending out messages to a segmented audience is part of a comprehensive marketing strategy that’s proven to bring in repeat purchases; spray and pray on the other hand, is not.
The benefits of segmentation
So why does customer segmentation matter? Let’s start with the lowest hanging fruit – the primary way retailers encourage customers opting out of their marketing lists is by contacting them. It may sound counterintuitive – what’s the point of growing a contact list of your target market if you lose some of them every time you reach out via a text message campaign?
But that’s exactly what happens; which is why segmentation is so important. By breaking your target audience into groups of customers with different motivations and purchase behaviors, you actually decrease opt-out rates and increase customer retention.
Not only that, but utilizing customer segmentation is the cornerstone of a strong customer engagement strategy. Customers who receive text message marketing that’s relevant to them are more likely to purchase from you, and even purchase more.
So how does segmentation work in a digital marketing plan?
Customer segmentations can only be available when platforms invest in powerful integrations. In order for it to be a seamless experience for retailers and brands, their marketing platform needs to comb through their point of sales system and organize tens of thousands of customers – sometimes across dozens of retail locations. Then, all customers need to be catalogued according to their age, location, purchase behavior, frequency of visits, and even customer interests.
Then, retailers need to be able to sort through these customers, who are changing in real time according to their latest purchase behavior, and pinpoint which filters they want to target.
Lastly, a retailer or brand’s marketing platform needs to appropriately apply the retailers filters accurately; making sure the same customer doesn’t show up on a list multiple times (thereby receiving multiple text messages or emails).
The power of filters
Email and text marketing can become expensive. Especially as text and email marketing list sizes increase as your business footprint grows. That’s why retail marketing strategies that include segmentation are the most cost effective and efficient. Without automated customer segmentation, your text and email frequency could be daily, with little value and great cost to retailers.
If you run a bookstore, why would you waste marketing dollars to send an email about an upcoming mystery novel sale to your entire email list? Especially if you know that only 10% of your customers have ever purchased a mystery novel from you?
Statistically, the people that have bought a mystery novel from you are the ones who are most likely to purchase another. This group is what we consider a target-rich environment. Your best marketing idea to drive traffic to your mystery novel sale is to focus your marketing efforts on them.
Time your messages
Timing is everything, and strategic marketing plans take timing into consideration. One of our goals at Stemless is to turn your first-time customers into repeats. It’s one of the most economic, efficient, and sustainably long-term conversion ideas you have available. You’ve done the heavy lifting in getting a first-time customer to check out your retail business or retail store and make a purchase.
Most retailers are unaware that repeat customers add 65% more goods to their cart than first time visitors? Return customers are good for your bottom line.
With Stemless you have the opportunity to segment your customers into new users and returning users. You can also filter your customer list based on how recent their last visit to see you was.
And lastly, segmentation timing gives you the ability to target those dreaded fade-aways – the customers who were regulars, but who haven’t been into see you in months. We even have automations constructed around fade-aways because of how valuable and sensitive this customer group is.
Different age groups purchase different mixes of products or services. Whether you have a physical store or an online site, it’s not immediately clear which age groups prefer which products (or brands). That’s where Stemless comes in: we show you how your marketing campaigns performed broken down by age group and brand, so you can get a better idea about which customers buy which products.
By giving our retailers real-time data about how their campaigns performed across different age groups, you’ll have the ability to target the right age groups with the right products in the future.
Focus on consumer spend
Let’s consider two different customer groups: On one hand, you may have customers that come in every day and buy about $5-$10 worth of product daily. On the other hand, you may have other customers that come in once or twice a month and spend upwards of $1000/month with you. These two customer groups are not the same.
It’s important to ensure that your marketing efforts accurately consider the habits and needs of the two different groups. Otherwise, you run the risk of reminding your regulars to come in or your big spenders to spend more with you.
Consider a credit card that you spend quite a lot with monthly sending you an advertisement to open your first card with them. Not only does the advertisement not make sense, it can be insulting to you as a customer that the credit card company you spend thousands with annually doesn’t even know you.
Filters on filters on filters – stack them up!
While all of the filters you have access to with Stemless are powerful in their own right, they’re exponentially more valuable when layered upon one another. Imagine being able to sell a premium insurance product to those that are 40+ in age and are in your top 10% of revenue generators.
Since you know that as a retailer, this group is among your most profitable and valuable, you may invest in marketing to them with special swag or gifts that you wouldn’t want to give to your bottom 10% of revenue contributors.
No two retailers are the same, which is why we never want you to send out a single email with the same subject line to all your customers. That kind of spray and pray strategy just doesn’t make sense: it’s expensive, time consuming, and has a high opt out rate.
Stemless’ automated segmentations with real-time data
Using powerful integrations, real-time customer segmentation, and seamless automations, Stemless puts all your customer data at your fingertips in a way that’s actionable and effective. Stemless de-dupes customer records, accurately filters customer groups based on the criteria retailers input, and sends out time-specific messages so you don’t have to.
To learn more about how Stemless can work for your, check us out here