Borderfree : The Three Pillars of Email Segmentation: Merchandise, Customer Demand and Creative

The Three Pillars of Email Segmentation: Merchandise, Customer Demand and Creative

When it comes to segmenting your current and potential customers in your email marketing campaigns, are you doing enough?

Although as many as 15% of companies' ecommerce sales may come through emails, nearly three quarters of companies report that they aren't segment marketing as much as they could because they lack the insight, automation or creative bandwidth to create multiple email versions (according to polls from Custora, a predictive marketing platform software. But luckily, by paying attention to three pillars of segmentation-Merchandise, Customer Demands and Creative-companies can balance the demands of targeted marketing with the chance to better drive sales by showing customers what they really want.

Moving Merchandise

Certain email campaigns may be driven by a need to move specific merchandise. For brands selling their own goods, internal merchandising teams may direct marketing to push a certain product category; companies that sell other brands may need to align with clearance sales or co-op deals promising to put certain products in the spotlight. In either case, segmentation will help marketers move merchandise more effectively.

One approach is to segment customers by product affinity, which enables brands to identify customers who have already purchased a specific brand or product category, to identify potential customers using predictive analytics that look at past purchases and browsing history. With this information, retailers can customize emails to those customers most likely to buy the brand.

Another approach that is useful for international retailers is to target merchandise-specific campaigns based on a customer's location. Smart marketers will use location data to build campaigns around local product preferences, local holidays or even weather. For example, a promotion on winter coats that targets US and UK customers in December would miss the mark for Australian customers. Knowing when merchandise will resonate is critical to the success of your international campaigns.

Catering to Customers

Successful customer segmentation depends on your ability to define your customer base using certain personas. This may be based on the precise type of products they tend to buy-such as pants, dresses or accessories-or the price point of brands they prefer, from high-end to everyday, accessible brands, or even whether they only buy during a sale. Even average order volume (AOV), or basket size, can be an effective persona segmentation strategy, for companies that sell a wide variety of price points.

Understanding opportunities to cluster your customers based on their heterogeneity [JR1] can help you tailor product SKUs to certain customers to increase conversion rates. Internationally, personas can be created around item preferences in a region or country, or even preferences for discounts on shipping or duties, which may be more valuable to certain customers in certain regions than others.

Creative That Converts

Finally, in order to maximize the efficiency and effectiveness of your campaigns, developing a system for your creative, so emails can be easily customized to address your segmented customers is critical. The best way to handle this is to build a set of templates that modularize emails, swapping SKUs based on your segments.

Knowing in advance which parts of your emails will be mixed-and-matched, with images sliced in and out based on segmentation, will help you maintain aesthetic appeal and the brand goals you're working to cultivate. This may require additional creative-for instance, your hero image may be static, but a smaller image may contain a zoom-in on a watch for customers who buy accessories, or a pair of designer jeans for customers who prefer jeans and a higher price point. Planning in advance will help you deliver any necessary creative, and testing after the campaign will help you determine if your investment in the creative provided a sizable sales lift.

When it comes to the creative for international segmentation, again, cultural awareness is key. Image swapping can help you focus on items that resonate, and image-driven campaigns can even help you overcome language barriers and the need for full-scale translation. Seize the opportunity to not only tailor emails to what you know will sell in a given country, but to direct that country's consumers toward items they may not have considered. Furniture may sell well in Brazil, but that country's customers might appreciate opportunities to buy items that are easier and less costly to ship.

Together, merchandise, customer demands and creative can and should work in tandem to help you segment your marketing emails-at home and abroad-to put the right products in front of the right customers, at the right time.