The Importance of Database Segmentation

By Andy Henwood

Defining and segmenting your target market is a critical step when formulating your business plan, so why don’t we spend the same time, energy and investment in segmenting our online databases?

You’re probably wondering why?

Sending out blanket GDPR compliant emails to all of your customers can be useful for things like alerts, newsletters and important business updates that you’d like your whole audience to see, but it isn’t the only answer for your digital marketing. The more specific you can get when targeting your marketing campaigns, the more positive your results will be.

Most website and email marketing platforms collect huge amounts of data initially from prospects, and eventually customers, usually via webforms (quotes, newsletters, competitions etc.) and treat them as a single database for mass emailing. A ‘one size fits all’ approach but you’ve received these emails, right? And binned them because they are of no interest. Sound familiar?

When your online customers or prospects interact with your Digital Channels (websites, social media pages, blogs, paid advertising etc.) they leave a trail of their activity. Using this trail to identify important online actions, gaining a clearer picture of who those prospects or customers are, allows you to analyse their needs and wants. These online actions can be included to the user’s data record for more personalised and more meaningful communications in your email and marketing material. When your customers receive these more targeted messages rather than blanket messages, the opening rate will increase and improve their advocacy towards your brand.

So how do you achieve this?

By analysing how they interact with your website: Which pages on your site do they visit? How much time do they spend there? How do they interact with your calls to action? Which site they were visiting before coming to your site? And where they went next after visiting your website? Because if the online user is searching your competitor’s site before or after your site, you need to capitalise on that activity!

By examining how they interact with your products or services: What have they purchased? What have they not purchased? Have they abandoned your shopping cart? Have they purchased before? Did they not complete your quote form? These actions all point to a particular level of interest and directs your next communication with that customer!

By researching where they come from geographically, the industry they work in, their gender and age etc. assists in building a more targeted profile of the customers you want, or in some cases – don’t want, to attract!

So how would this work for you? Here’s a couple of examples:

With database segmentation, you can set up a rule to automatically send out an email to people who have added items to their shopping basket, but not purchased them, 2 days after they have left their shopping basket. This gives customers who didn’t complete their purchase a second chance to come back to the site and complete their purchase. These customers could also be ‘re-targeted’ using paid adverts reminding them of what they were considering purchasing. A great example of this is the ads you get served up when you’re researching your next holiday.

You can identify repeat customers and incentivise them to ‘spread the word’ of your services or products on, for example, social media. Alternatively, you can identify customers who repeat visit your site but never purchase your products or services online and incentivise them differently to gain that action.

Here’s how to start automatically segmenting your data:

The most onerous part of segmenting your database is the time it takes to collect, search, filter and store the different actions attributable to each segmentation. The combination and permutations of segmentations is infinite and creating complex multiple ‘user groups’ is time consuming.

But the good news is there are tools to help you with this:

Email software such as MailChimp, Dotmiler or Pure 360 (and there are many more) allows segmentation based of the customers interaction with emails such as Opened Email, Non-Opened, Forwarded, Completed Forms, Site Visit etc. These can then be used to form basic segmentation groups based on these actions. These actions can then trigger an auto-response email

Website CMS (Content Management System) platforms, such as Kentico or Sitecore. These systems have inbuilt capability which allows you to track online actions and then segment them into the ‘user groups’ defined by what’s commercially important to your organisation.

All-in-one CRM platforms such as Salesforce, Microsoft Dynamics or Adobe. These platforms integrate both the website CMS and email actions. Allowing you to capture complex data across multiple channels (i.e. websites, social media and email) and then segmenting this into your defined user groups. They also have built in marketing automation (email, telesales) based on the rules you want to apply. These are complex systems and do need in depth knowledge of how to use them – and they do come at a cost!

Behaviour-based database segmentation is what digital marketing excels in. The more specific and less intrusive your marketing is, the more positive your response will be. The average open rate for marketing emails sits at around 22%, whereas context-based auto-emails have an open rate of closer to 50%. Setting up behaviour-based marketing emails can increase your open rates by finding critical ‘tipping point’ between a blanket marketing email and a context-based auto-email.

Is your business ready to get started?

Defining and actioning database segmentation sounds onerous, resource-heavy and time-consuming, but having a segmentation strategy and the tools to implement it will save future time resource and expense. Once up and running the results will be quick to see and the commercial impact (ROI) identifiable.

Database segmentation makes it easy for you to get the most out of your online marketing by cutting out a lot of the grey area. The main advantages are that you can measure exactly what works and what doesn’t, whilst maximising your ROI and increasing your profits but ultimately, you get one step further in delighting your customers by giving them exactly what they want – or in the case of useless blanket emails from some companies – what they don’t!