Monday, March 31, 2008

Case Study Monday - Another Segmentation Story!

We have lots of experience using segmentation in the direct marketing world. But, we love to see other channels embrace the strategy. Lyris, a provider of e-mail marketing campaign tools has released a white paper that reviews how online marketers are (or should be) embracing segmentation as a great way to boost e-mail campaign results.

From the paper:
"In case you didn’t get the memo, batch-and-blast email marketing is out. Sending out a single email message to every address in your database whenever you wanted is so 20th Century now!"
Ah, we couldn't agree more.

We're happy to share these success stories that illustrate the power of employing a segmentation strategy, directly from the Lyris white paper.

Real-World Examples: and Frederick’s of Hollywood, the leading online retailer of high-end diamond and gemstone jewelry and a Lyris customer, has about a million subscribers in its email-marketing program. With numbers like those, and given the intensely personal and individual relationship its customers have with their jewelry, a single email message sent to the entire database was not going to deliver the results the company needed.

Under its previous vendor, could create only two segments: those who had purchased and those who had not. Using Lyris’ segmentation function, however, the company can create personalized emails based on what each customer tells the company he or she most wants to receive.

By being able to add any kind of variable – product, lifecycle position, whatever! – to any customer record, can create a relevant segment based on that variable and build a targeted campaign around it. Using segmentation and other functions in Lyris ListManager, was able to report a 10% increase in average sale and triple the number and variety of email campaigns – proving once and for all that diamonds really are a girl’s best friend.

Frederick’s of Hollywood taps into women’s other love, for silk and lingerie. Here’s how the lingerie retailer, through its online division, uses segmentation to drive more sales from current customers:

Frederick’s of Hollywood maintains two mailing lists, one for prospects who subscribe to company mailings but haven’t bought yet, and one for customers. The company uses purchase history data to create segments of buyers who are interested in non-lingerie products such as shoes and swimwear.

As long as you have a reliable web analytics program embedded with your list-management software, you can use a similar technique to cross-sell customers who have purchased one kind of product to explore an expanded product line or to upsell them to products of higher quality.

So, there you have it--examples of how to use segmentation both through up-sell and cross-sell strategies. Think about the data that you collect on your customers and prospects. And, consider external data that is available that you might append to your customer list. Opportunities for clever messaging and new offers abound when you embrace the segmentation concept.

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