Episode 7: Segmentation Series Part 1 – Intro to Scaling Personalization

Episode 7: Segmentation Series Part 1 – Intro to Scaling Personalization

Chris defines segmentation and explores its place in marketing automation.


In our seventh episode, Director of Education Chris Davis introduces segmentation and highlights the various ways you can group contacts in ActiveCampaign. Our segmentation tools can personalize your marketing to an unprecedented degree, but first, you need to know how to use them. Check out this edition of The ActiveCampaign Podcast to learn what segmentation is, why it matters, and how to practice it in our platform.
Chris Davis: Welcome to another episode of the ActiveCampaign podcast. In this episode we’re talking [00:00:30] about becoming more personalized and effective with your marketing. The goal, the gold, I should say, in achieving that is one word called segmentation. This episode, I’m gonna help you understand what segmentation is, why it matters in your marketing, and then I’m gonna give you some strategies and frameworks on how to segment effectively. [00:01:00] I’m excited about this podcast because it’s the first of a series, which is our first series that we’re doing at ActiveCampaign as a podcast and this one is, like I said, is going to give you an overview and a deeper understanding of segmentation. The further the sequential podcast that will be coming out after this will deep dive into specific strategies and those strategies are segmenting [00:01:30] by tag, segmenting by list, and segmenting by custom field. So we’re gonna go over all of it, this episode.
Let’s start with defining what segmentation is, all right? Segmentation is the act of grouping your contacts by either attribute or action. The process of grouping your contract, contracts, your contacts by attribute or action. [00:02:00] Attributes are things that are a part of them. A attribute could be me saying everybody who’s a male, you go over here in my contact database. Everybody who’s a female, you go over here. That’s an attribute. Attributes are interest. I could be interested in shoes or I could be interested in shirts. These are all attributes that I can be segmented on, or you can segment me or group me [00:02:30] by actions. One is greater than the other, can you guess which one? I give you some time. Yep, absolutely, you guessed it right. I know you guessed it right, because all of you listeners are very intelligent marketers. In segmenting by action is the strongest form of segmentation that you could perform in marketing. The official term of it is behavioral based marketing and when we talk about behavioral based marketing, it’s the process of [00:03:00] not only listening to what your contacts are telling you they want, in the form of a form submission, blog, comment, support ticket. These are actions that they speak with their mouth, per se, in the form of typing. But we’re not limited to that in behavior based marketing.
Were also monitoring what they’re doing. One way of listening to somebody is what they say, but another way is [00:03:30] by what they do. We all know actions speak louder than words. The ability to monitor the actions that people take on their customer journey is what puts you in the winning seat when it comes to segmentation. The entire purpose of segmentation is to get more personal with your marketing. Nobody likes broadcasting. In fact, [00:04:00] if you think about it, if you’re a store owner, let’s say a store owner like Walmart that has multiple products, retail store that has multiple products and people are in various isles. What do you think is more effective? If you get on the intercom and say, “Today, buy two, get one free, all men’s jeans. Buy two, get one free. Attention everybody, buy two, get one free.” Or, what do you think [00:04:30] if you went to the specific isle and there were five people in the men’s section looking at jeans and you go and you tell them, “Hey, if you buy two of these, you’ll get one free.” One, is this mass communication to everybody, hoping that all the people in the store flood to this isle. The other one is meeting people where they’re at and making the offer that they’re already contemplating. [00:05:00] Which one do you think will be more effective?
Well, I’ll tell you. Meeting people where they’re at when they’ve already expressed interest will 100% of the time be more effective. To understand that we combat this idea that, I just need to tell everybody about my message. I need to tell everybody about my product. I need to tell everybody about my business. The old adage in marketing says, if everybody is your customer, nobody’s your customer. Even [00:05:30] within your target audience, your target market, you still need to understand the unique attributes and interests and actions of each contact on your database to affectively sell to them. So don’t try to get as many people as possible in the door and try to sell to them over the intercom. Get as many people to the jean isle, so that [00:06:00] you can meet them in that jean isle and help them with a decision they were already contemplating on making. That’s the power of segmentation and in that, we see that broadcast messaging is the laziest and most ineffective form of messaging you can do in your marketing. I’m going to say it again, the bold statement alert. Broadcast messaging is the laziest [00:06:30] and most ineffective type of messaging you can send in your business.
This is why there are so many reasons, and I’ll get into them later, that you should be sending segmented emails but more importantly is we are humans and we desire to be treated as such. You can go all the way to the prison system, and when people get numbers, they no longer have names. They’re like A12504. It dehumanizes [00:07:00] you. Nobody wants to be dehumanized. So when you send a broad message to everybody that’s, “Hi first name, I just wanted to let you know about everything that’s going on.” People don’t appreciate that. Instead, if you speak to me specific to what I’ve either done or what I said I want to hear from you, it will go a long way in your marketing, because now [00:07:30] you’re building real relationship with me. In that vein, I would say, and this is what we teach here at ActiveCampaign, that every form of communication you send should be targeted. I don’t care if it’s just you saying I’m sending this message all to men and you’re gonna copy the same email, change a couple lines, and send it to females. Make sure you’re targeting your messages [00:08:00] as much as possible.
It takes more effort, that’s why I said broadcast messages are lazy. How easy is it to just log into your account, check every single list, and just send a message. “Hey, Black Friday sale. End of the year sale. New years sale.” How easy is that? But it’s not as effective as sending targeted messaging. This entire podcast is dedicated to build [00:08:30] the case that from this point on you are in the know, and if you continue to operate sending these broad messages to your database and your deliverability fails and drops, your unsubscribe rates skyrockets, your conversion rate from lead to customer plummets, you can no longer play ignorant, nor can you blame your platform. You have come to the knowledge of the light [00:09:00] of understanding what segmentation is, and as we continue to listen, I’ll make my case even further on why it matters and how to do it. But in order to send your targeted messaging, you need a platform that makes that easily possible.
When I talk about a platform, I’m not talking about a platform that can only track the actions that you take on their assets. [00:09:30] There’s platforms out there that claim marketing automation and they can only track website visits on their landing pages. They can only track web link clicks on links you create within their platform. They can’t go beyond what they can create and that’s where one of the big differentiators for us at ActiveCampaign is using our web tracking script as long as [00:10:00] you own the asset, guess what? We can track behavior. Not only can we track behavior, we can segment on behavior and not only can we segment on behavior, we can segment automatically on behavior. Case in point. Somebody visits your sales page five times, but guess what? Your sales page isn’t on your website so it’s yourbusiness.com but your sales pages on yourbusiness.salespage.com. [00:10:30] The owner of the software who’s hosting the sales page, has your cart, but you’re a savvy marketer, you’re an ActiveCampaign user, and you put our web tracking in the header. Now, you can successfully track when they’re on your website and they click checkout, and they go to another domain, you’re tracking that.
So now you’re seeing, oh you hit my sales page once. If somebody on your database hits [00:11:00] your sales page five times, you can send an internal notification. You can do perform some action that says, “Listen this person is highly interested, but they probably have questions that they’re not getting answered on that page, so let’s reach out to them.” This is why you need a platform that can track all activity on all assets that you own, because it positions you to be more targeted with your messaging through segmentation. [00:11:30] The goal, the primary goal of segmentation is this, this is when you have achieved the pinnacle of segmentation is when you’re speaking to an entire group, your entire custom contact database, and each person feels like an individual. I’m not saying that they don’t know they’re part of just thousands of people that you’re sending to. But when they receive your messaging, [00:12:00] they feel like an individual. It feels personalized beyond just using their first name. That is where we see that scaling personalization is the greatest benefit of segmentation. Say that one more time, scaling personalization is the greatest benefit of segmentation, because the more personal you get in your marketing, [00:12:30] the better your results are going to be.
I’ve got some data to back it up, and here’s why it matters. Broadly speaking, all your numbers will rise. All the numbers that should go up, will go up with more personalized marketing through segmentation and all the numbers that should go down, will go down using segmentation. Here’s some data for you that will help [00:13:00] put things into perspective. MarketingSherpa, as of their 2012 email marketing benchmark report states that 32% of marketers say segmenting their email database is one of their organizations’ top objectives in the next 12 months. Furthermore, 50% of marketers say that they have a great need to improve email database segmentation. This is from MarketingSherpa [00:13:30] and you can use that as a key to understand that business owners are starting to be … They’re starting to enter into the knowledge of understanding the importance of segmentation. No longer is it acceptable to them to send the same message to everybody. Some more results here that, these are reported by MailChimp and they have some interesting numbers. They have global results of [00:14:00] a 94% higher click through rate from over non-segmented email sends. Just by segmenting your sending, you will receive a 94% boost up over sending broadcast emails.
When we talk about segmenting by merge field, merge field [00:14:30] is when some contact submits their information, like first name and then you use that data in your email communication. That’s what a merge field is across platforms in email marketing and marketing automation. However, on ActiveCampaign we have personalization tags and our personalization tags go a step further, because they can be used in more technical senses, I’m not going to get into the technicalities [00:15:00] here, but they could do things like auto populate fields. Give you a form progressive profiling so that your leads don’t always have to start from scratch for information that you already own on that contact. But segmenting by a merge field, a 53% higher click through rate than non-segmented campaigns. 53%. Your [00:15:30] unique opens, nearly 10%. Remember, I said the numbers that should go down, go down. 7.32% lower unsubscribe rates than non-segmented campaigns. I can go on for days on the reasons why you should segment. This is just some data.
DMA’s national e-client email survey [00:16:00] of 2014, a 760% increase in email revenue came from segmented emails in 2013. Up 55% in 2012. 38% of marketers segment for six plus audiences, 11% don’t segment at all. That’s as of 2014, [00:16:30] so if you’re not segmenting your database, you’re in that minority of the 11% that clearly don’t have any clue what they’re doing. 56% of client marketers plan to increase their budget allocation to email in 2014. What am I saying with all this? I’m saying two things. One is, [00:17:00] businesses continue to adapt the effectiveness of email. They’re continuing to do that. In doing that, they’re also understanding that segmented email sending practices are the best means of getting high performing emails. Getting the biggest return on their investment when they’re [00:17:30] sending emails. It goes beyond sending emails. I mean, we’re talking about emails because we do email marketing very well at ActiveCampaign as well as marketing automation. One of the few that handle both really well, but we even understand that it’s more than email. We know that there’s multiple means of communicating with your [00:18:00] contact database. We’re fully aware of this and this is why within our platform, you have multiple ways. Whether it’s internally sending a notification to call somebody, or sending an email.
There are a lot of ways that we provide for you to reach out, as well as segment your leads, your contacts. Let’s talk about how to do [00:18:30] it. How do you do segmentation effectively, and that’s what this series is all about. Right now, I just wanted to come out and make a claim that segmentation, if you’re not doing it, you’re on the outside here. And this is not one of those areas where you want to be an outsider. You want to be on the inside of high-performing marketing and it only happens through personalization. Personalization through segmentation. [00:19:00] Let me give you an overview on how to do it and we’re gonna be breaking down this framework in the podcasts to come. Don’t feel like, “Aw man, you just kind of glossed over that. Give me more, give me more.” Trust me, more is on the way. But I just want to lay the foundation, give you a basic understanding of segmentation and the approach to do it.
So when we talked about how to do segmentation, think of a funnel, an upside pyramid, [00:19:30] that is split into three sections. The top section is your broadest form of messaging. This is, perhaps you are grouping people by customer and prospect. The broadest form you can get. That’s where your lists exists. Lists are the broadest form of segmentation you can achieve. [00:20:00] In saying that, if you’ve got multiple list, if all you’re using are lists to segment your contact database, let me put it like nicely and say, you’re behind. Just put it like that. There’s a race going on and you’re not winning, if all you have at your disposal are lists. Or if all you choose to use are lists. It’s the broadest. You’re not going to be able to get as targeted [00:20:30] as you want using just lists. List have a place, I’m not discounting them saying you don’t need them. They have a place but just understand, they’re the broadest means of segmentation.
Let’s go down the funnel one step, remember this a three-part funnel, so we’re right in the middle. Right in the middle is where tags exist. Tags is your first level of more targeted marketing and the reason being [00:21:00] is because tags can be applied and they can be applied and removed based on multiple criteria. In fact, and we’ll get into this and in the tags version of this segmentation series, tags are a … They represent a set of a condition or a set of conditions. So whenever you see a tag, there’s conditions behind [00:21:30] it. That tag … Tags can become very powerful because one tag can resemble or can represent an entire set of conditions. Instead of reading four and five conditions, you look at one tag, and you say, “Oh, since they have this tag, I know they meet those conditions.” That’s where the power of tags come in. In fact, tags are so powerful that there are marketing automation platforms out there that their only [00:22:00] means of segmentation is tags. That’s it. That is their primary means of segmentation.
I’m not knocking them. I think it’s a limited approach, because tags are not the end-all with segmentation. You can get a lot done, don’t get me wrong, but they are definitely not the only means of segmentation. So if there’s a platform that’s heavily engaged in [00:22:30] using tags for segmentation and that’s it, well just know that there’s gonna be some limitations. You’re probably gonna have to be more creative in some of your segmentation and this is where a lot of users, a lot of small business users have a learning curve. It takes them longer to adapt how to use a platform [00:23:00] when it can only do segmentation one way. That’s why I’m thankful, of course, ActiveCampaign every single means that I’m outlining, we’re able to do. Broadest, lists, more targeted, tags and the most targeted is what? Come on. You know it, you’ve been listening. Yes, exactly. Custom fields.
Custom fields are the most target where I would say tags represent [00:23:30] conditions. They tell a story. That’s what I would say about tags. Tags tell a story. When you see a tag, there’s something behind that tag. When you understand what it stands for, what that tag stands for, it’s almost like symbolic. What does that tag stand for? That tag stands for somebody who’s opened my emails and clicked links. That’s what that tag is. We want to [00:24:00] keep track of those people because when we run a promo, we want to make sure we hit them first, because every engaged. Custom fields are almost … I like in custom fields to the DNA of your contact. Things that don’t easily change. Can it be changed? Yes, but not easily. Things like your gender. These are my males over here, these are my females over here. Can it change? Yes. Can it change [00:24:30] easily? No, but it can. Custom fields aren’t permanent, but they’re as close to permanent data that you’re going to get on a contacts record. Some more examples are shoe size, especially for adults, your shoe size probably isn’t going to change that … It’s not going to fluctuate that much.
When you’re shopping at e-commerce [00:25:00] store, what are you interested in? Maybe they bought a shirt. Their shirt size is medium. Now unless they experience massive weight gain or weight loss, that’s not going to change easily. That is the difference between the layers, the levels of segmentation. Your broadest is lists, you’re more targeted is tags, and your most targeted is custom fields. [00:25:30] In this series, remember, we’re gonna cover all of them and provide strategies for you, so you can leverage them effectively. I’m not just gonna talk about tags, I’ll give you a tagging strategy. I’m not gonna just talk about custom fields, I’ll help you understand when to use them and which ones to use in which cases. I’ll give you a list strategy. If you’re one of those people that says, “Should I use one list or multiple list?” I’ll give you a segmentation [00:26:00] by list strategy. At the end of the day, you know what your marketing is gonna look like? A mixture. A well mixed version of using all three. You need all three. You can’t throw one out. You need all three. They all play a part in segmenting your database for personalization.
Remember, the key is to segment by behavior. [00:26:30] Preferably automatically. Speaking of which, there are some resources that you will find in the link below. I shouldn’t say the link below. Below this podcast, in the description of this podcast. If you don’t see it, the URL is activecampaign.com/podcastepisode-7 and you’ll be able to get a synopsis of this entire podcast, as well as additional resources that [00:27:00] you can take and consume at your time to help understand exactly how to get more targeted in your marketing through personalization achieved through segmentation. Until next time, stop sending those broadcast emails if you are, and if you’re not, keep on sending those targeted emails. I’ll see you in the next episode.
If you enjoyed today’s episode on segmentation, there’s more to come. [00:27:30] As I mentioned, this is the first installment of three more to come where we’re going to do a deep dive into leveraging segmentation to become more personalized in your marketing, and I’m going to provide you strategies of each one. You don’t want to miss out on this series, let alone any of our podcasts, so make sure you subscribe, we’re in iTunes, GooglePlay, Stitcher, whatever podcasting application you’re using on your mobile or desktop device, make [00:28:00] sure that you subscribe. If you’re enjoying this content, please leave a review. Rate us five stars and let me know exactly how this podcast is helping your business grow. Remember this is the small business podcast to help propel and scale your business using marketing automation. Thanks for listening.

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