How to segment your customer list

Have you heard that you should “segment” your customers before marketing to them?

Ever wondered what that means, much less how you’d do that?

We’re going to talk about that today in simple terms, but before we do that, you might be wondering …

Why should I segment my customers?

Good question.

You want to segment your marketing is to achieve something called “Message-to-market match“.

Let me explain with an example. Let’s say your company sells women’s underwear.

Would you advertise the same underwear in the same way with the same photos and the same messaging to each of these groups?

  • Single women
  • Pregnant women
  • Newlyweds
  • Moms of girls approaching puberty
  • Dads of girls approaching puberty
  • 50-plus women
  • 80-plus women
  • Women under 5′ 6″ tall
  • “Plus sized” women
  • “Tiny” women
  • Very curvy women
  • Not-so-curvy women
  • Women who have survived breast cancer
  • Significant others

I’ll assume you answered “No”.

Message-to-market match” means your message is refined for a specific group of recipients so that it’s welcome and in-context, rather than annoying and out of left field.

A lack of message-to-market match is why people tune out ads and pitch so much mail – the message isn’t truly for them. If it happens enough times, everything you send them is ignored. Ouch.

Like the recycling bin

When recycling different materials, the processes required to break down cardboard (shredding, pulping, etc) will differ from the process that prepares glass, plastic or animal manure for reuse.

Think of your messages in the same way. If the message a customer receives doesn’t make any sense because it’s out of context, it’s like recycling something with the wrong process. The money, time and energy invested in creating and delivering the wrong message will be wasted. Worse yet, the wrong message can alienate your customer and/or make your business look clueless.

Ever received an offer “for new customers only” from a business that you’ve worked with for months or years? How does that make you feel?

You might think a generic piece of news is received the same way by everyone – when in fact that news might excite some customers and annoy the rest. The time spent considering this and segmenting your announcement can save a lot of pain.

Your First Oil Change

Look at the groups listed for the underwear business. That’s customer segmentation.

If you sent “The Single Dad’s guide to helping your daughter pick out her first bra” to the entire customer list, how many would think “This is exactly what I need”? Only the single dads group. Most others would hit delete, unsubscribe, click the “Spam” button or just think you’re not too swift.

The smart folks sending the “first bra” piece would break it down further by sending a different guide to the moms than they send to the dads.

Need a simpler version? Chevy vs. Ford vs. Dodge. Harley vs. every other bike. You shouldn’t have the same conversation with these groups, even if you sell something common to all of them, like motor oil.

Think that list is broken down too much? Don’t. I just scratched the surface.

Why people think they can’t segment

– They don’t have or “get” technology.

Whether you use a yellow pad or a fancy customer relationship management (CRM) system, you can make this work. If not, consider a better way to keep track of things.

Long before computers, savvy business people would sort customers into the “blue pile, red pile, yellow pile” before putting together a marketing piece. No technology is no excuse.

– Their media doesn’t offer segmenting.

What if your chosen media doesn’t provide a way to target a specific segment? They don’t deliver special Yellow Page books to single people, retired people, CPAs or car dealers – so how do you segment your message?

You can segment those media buys by message since many vendors are unable to deliver a different book, newspaper, magazine or radio/TV ad to different types of customer – which should also improve ad ROI.

You might be getting pressure from internet-savvy staff (or vendors) to drop old-school media. If it works now (do you know?), dropping them makes no sense.

– They don’t have a customer list

Start creating one today, even if it’s on a yellow pad. Figure out what differences are important to you and record them.

Help! What’s wrong with my mailing?

Yesterday we talked about the details about the envelope and letter we sent to request Brunch with Santa donations and to sell tickets.

There were (in my opinion) a lot of things right with it. BUT…what was wrong with it?

Keep in mind it is perfectly normal to find things that are wrong with a mailing you just dropped at the post office. There’s a big lesson there: We didn’t wait to mail it until it was perfect. You just can’t do that.

If you wait until your campaign is perfect, you’ll never mail it because it’ll never be perfect. It’s like waiting until the perfect time to have a baby – there’s no such thing.

That said, there is always room for improvement. Maybe there’s a better way to state it rather than “what’s wrong?” is “How can I make the envelope and the letter even better?”

Slice em and dice em

One thing that I advise customers (and readers) to do is segment your mailing. Some might look at the letter sent to chamber members and think that I did – but that really isn’t the case.

The people on this particular mailing list fall into a couple of distinct groups: blue collar services (construction, auto body, auto repair, custom logging, trucking), white collar services (attorneys, accountants, bankers, computer consultants, real estate sales, graphic artists), hospitality businesses (restaurants, caterers, hotels, motels, bed and breakfast inns) and traditional retailers (clothing, food, auto parts, tires, coffee, etc).

What changes would segmentation bring?

If I broke that list down into the four segments I mentioned, it would allow me to make several important changes. I didn’t do so this year simply because of time pressure.

For blue collar service businesses: I would likely use slightly different verbiage that is more in tune with their businesses and would have made a more specific ask. Like the others below, the ask would be for items or services that are most likely to get the business a new customer. In their language, specific to their needs.

For white collar service businesses: I’d use some different verbiage, a different ask – more specific to the services they offer and keeping in mind that I want a donation that helps them get a new customer – and some slightly different psychology. Again, the language used would be in tune with these kinds of businesses.

For the hospitality businesses: Again, specific language to their business. In fact, I would likely split this group into food-related and non-food-related because of the differences in what I would like to get in donations, differences in industry language and COGS. For the food biz, I’m trying to create an opportunity for them to make an impression that brings new customers to their restaurant or catering service. That happened this year as well – I didn’t simply ask for a donation. I offered them an opportunity to promote their business with the best they could bring to the table. Positioning is important.

Other thoughts

I would like to have a bit more automation in place to deal with generating specific responses, logging auction assets and so forth. I’ll be working on that throughout 2009. While that automation will be somewhat specific to the Brunch, it is designed to work with any campaign – and with multiple media. It might become a system that you can buy.

A blue collar vs white collar mental image

Speaking of blue collar and white collar services, I’m reminded of an interesting way that Ford Automotive’s Social Media guy Scott Monty described the difference between white collar workers and blue collar workers: “people who shower *before* they go to work” and “people who shower *after* they go to work”. Paints a pretty clear picture, doesn’t it? You can follow Scott on Twitter.

[audio:http://www.rescuemarketing.com/podcast/WhatsWrongWithMyMailing.mp3]