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Why data segmentation is much cooler than it sounds, and crucial for successful direct mail marketing

01 October, 2019 Why data segmentation is much cooler than it sounds, and crucial for successful direct mail marketing
Find out how to segment data usefully and make more sales as a result

Data segmentation.

Doesn’t exactly roll off the tongue, does it?

But in this day and age, it’s just about the best thing that happened to marketers, and you really should be taking advantage of it.

Because being tangible and arriving through the letterbox doesn’t have to be the only thing that makes direct mail stand out.

See, you can apply the same principles that email marketers use to personalise their content to your own direct mail campaign.

And there are plenty of ways to segment data into useful groups to market to. Let’s start by talking about the most common.

Demographic

The big one. Using demographic data, you can segment your direct mailing list by, well, pretty much anything.

Some choose age or occupation, others gender, some even plump for house value or number of dependents. Whichever demographics you use, they’ll come in very handy.

Here’s an example. Know that loads of your customers work in education? Send them offers synced with the school year. Sell them books at the start of the holidays, or classroom supplies at the start of the school year.

Geographic

If you’re creating a personalised direct mail campaign, location is a good place to start.

Segment your prospect and customer lists by postcode, city or county or get really creative by referencing geographic markers close-by to recipients.

 Interests

When your mailbox is mostly made up of bills, something different that appeals to a consumer’s personal interests, values and hobbies can really stand out.

Base your mailing list on interests and you’ll give yourself a shot at making a personal connection and standing out from the pile.

Special events

This is a good one. We’re talking things like birthdays and anniversaries.

With that data to hand, you’ve got an easy way to make a connection with someone and give them the feel-good factor as you do it.

Send them a special deal or a gift to nurture the relationship, or even celebrate the anniversary of the customer’s first purchase with your brand. Show them that you don’t just value their business, but you care about their personal life too.

Behaviour

You know those emails you get to remind you that you’ve left items in your basket, or to let you know that an item on your wishlist has gone into a sale? That’ll have been triggered by your behaviour data.

And behaviour data isn’t only useful for email marketers; direct mail marketers can take advantage and increase conversions too.

Purchase history

Purchase history is equally useful in personalising messages. From targeting consumers with online ads to emailing them recommended products based on a previous purchase, there are plenty of ways to influence the next buy.

And you can do the same with direct mail, targeting return customers.

Last interaction

Customers often use a variety of different channels to interact with a brand. Maybe they follow you on Twitter. Maybe they subscribe to your newsletter. Maybe they read your blog from time to time.

Use data from your last interaction with them to avoid sending them the same message twice.

You could create a segmented list for brand new customers to keep your interactions with them relevant to where they fall in your sales funnel.

Get to grips with segmentation

Now you know a bit about the possibilities, let’s talk about the practicalities with a hypothetical data set.

Let’s use a second-hand car sales business for an example. We’ll call it CarFam. CarFam’s a national enterprise with numerous branches throughout the UK.

It has various presences online but no site where customers can actually click to buy a car. Instead, the site shows the cars CarFam has in stock and encourages people to swing by and look at them in person.

It’s a decent strategy that allows salespeople to cross-sell even if the car they were initially interested in isn’t right for them or has already been sold.

But CarFam isn’t a household brand name (bet that surprised you), so the website only gets hits when specific online search criteria are met.

They want more website traffic and more footfall in the branches. (Sound familiar?)

That’s why they’ve approached Flow to run a mailing campaign and ask the question, “What should we do?”

And basically, it all comes down to segmentation.

To create more traffic we have to segment CarFam’s data and identify customer needs.

So we’ll start by breaking down the data geographically. We’ll take initial results from each branch and examine them to identify volumes of footfall and sales, and where the customer spread lay.

Armed with that info, we’ll designate a catchment area to each branch. In this example, CarFam has branches near to major cities in most counties. Normally, we’d simply allocate a county to each branch. But some of CarFam’s branches are small with limited stock, or are two counties away from the nearest branch.

So we need to create a system that helps promote interbranch support and ensures customers aren’t lost due to lack of stock in view.

The solution is to group small branches with their nearest big branch and allocate a catchment area for the entire group. All the groups will incorporate adjacent unoccupied counties if their size and transit proximity allow.

That means salespeople can refer customers to the larger branch or offer to bring a car from one branch to another. And that will help CarFam avoid losing sales.

This geographic modelling allows Flow to work out what volume of customers are in each new area. We can determine the number of customers potentially available in each new area too.

The benefit?

Maximised sales opportunities, improved branch relations, speedier logistics.

From a direct mail point of view, you’ve broken down the target audience into two categories in each sector: lookers and buyers. And we’ll take that into account when targeting a mailer, with a different set of approaches for each category. We’ll come back to that.

The next step is to look at the demographics within the data.

Who’s buying the cars? Who’s looking but not buying?

Using this data, you can assess why cars are or aren’t selling, and to whom.

We’ll just look at a couple of demographics categories because, let’s face it, this is a mammoth area.

With cars you can automatically assume three things.

If people are looking, they want a car. They drive or are going to be driving soon. And they’re willing to spend time finding the right car.

All positive key points to note, and something you need to remember when you start writing copy for your direct mailer. More on that later too.

So how does this help?

Well, you’ve already got two target audience in just one of those three points. People who need transport and people who want a car that looks good.

The second point is also useful. “Do you drive?” or “do you have a driving licence?” are questions often asked by insurance companies. So you can break down data by one of both of those simple questions too.

And the third point? If people are willing to spend their free time looking for the right car, they will look at your offerings. But if your offerings are bad, they’ll consider you a time waster.

Bit of a double-edged sword, right?

Thing is, you can use it to your advantage. Focus your marketing correctly with a postcard or a letter sent within a period of use to them. Offer to bring a car they’re interested into the nearest showroom on a day that suits them. Ask them to call or email to request a particular car.

Promote action and show you care about what matters to the consumer at the same time. Win win.

Anyway, back to demographics. For CarFam, we’d list the demographics as follows (this is the short version):

  • Licence: with and without
  • Employed
  • Stay-at-home parent
  • Has children aged <16 and number of
  • Has children aged 16+ and number of
  • Male/female
  • Income levels (10k+, 30k+, 50k+ etc.)

Let’s start at the top of the list and look at how each category becomes useful from a marketing perspective.

As you read, think about how you could apply the same categories and similar approaches in your own marketing.

Licences

If you write the copy cleverly, you can capture both audiences in one go. But it’s easier to take two different approaches.

First-time drivers are likely to be after a small, sensible car or, for some, the childhood dream hot rod.

Realistically, CarFam sell more of the former to new drivers because they have a bigger selection of that type of car. The higher end cars are riskier, so they simply stock less.

So a flyer could proposition the reader with the two options and ask which they’d prefer. Doing so generates a choice while honestly steering them in the direction of the types of cars available at CarFam.

Employed

People in employment are more likely to buy a car on the spot, either directly or by a credit agreement (for which you generally need an income). That’s why you’d want to target them too.

Stay-at-home parent (or carer)

People in this demographic group are often at home to care for others. So you’d target them with a vehicle that accommodates and is suitable for infants. You might consider the disabled and the elderly too when writing a campaign for this group too.

Has children

When you’re addressing people with dependents under 16, you can pretty safely assume that there’s a usage requirement there, and the consumer doesn’t simply want a car to cruise around in.

It’s a bit different for people with children aged 16+. See, they could well have dependents who’ll be in the market to get their first car.

So with this demographic, you’ve got the opportunity to appeal to both the parents and the children and get the ball rolling with your brand for other future purchases.

Male/female

Gender is actually making less and less of a difference to marketing in many retail and service areas. But it’s still useful to consider when addressing a potential customer.

Work out what might appeal better to either and focus on that.

Income level

It’s simple. You’d target particular vehicles more accurately at the people more likely to have the budget to actually buy them.

Obviously there are tons of demographics that you can use in your next marketing campaign. And they don’t just work for second-hand car sales.

The most important thing is to simply find a link between consumer data and your product and service, and focus on that.

If we revisit the segments we talked about earlier, you’ll see you can do the same thing there too.

Interests

What interests might people have that relate to your own offering?

For CarFam, you might focus on people who go to car meets or are members of car clubs.

Think outside the box too. For example, people with certain hobbies might require decent boot space so you could try advertising estate cars and 4x4s to them.

Special events

17th & 40th birthdays are great times to advertise to people. One is now old enough to drive and the other might be looking for a change in their lives. Advertising them new sportier car because the kids have left home might feel clichéd but it often does the trick.

Behaviour

If a customer contacts you off the back of an offer in a mailer, they’re likely to respond the same way next time – if the timing is right.

It doesn’t matter if they’ve ignored all your emails (or vice versa).

Just note how and when the customer responds, and what they’re responding to. And focus on that approach for that customer!

Purchase history

Has a customer bought two similar products from you in the past (two Volvos, say)? You might want to keep marketing other similar stuff to them.

Last interaction

Whatever you’re selling, if you can say to a customer, “Hey, I remember you. Last time we chatted you were looking for…”, they’ll feel a greater familiarity with your brand.

Even if the last interaction was online, you should be able to reference that. Keep data on any previous enquiries or walk-ins and use it to approach people in the way they’re most comfortable.

You’ll save yourself from repeating the same old messages every time and you’ll build a relationship with your customer as you do it.

Hopefully you’ve read this blog with your own marketing in mind and have some new ideas to bring to your business. As always, feel free to get in touch to ask any questions or find out more.

And if you’d like us to blog about another useful subject, tell us!

We’re always here to help.

 

 

 

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