Join Trish Witkowski for an in-depth discussion in this video Market segmentation methods, part of Learning Direct Mail Strategy.
We're going to be talking about the different strategies you can use to divvy up your lists into smaller groups that are more likely to be interested in what you have to offer. There are four methods you can use, and we're going to discuss the reasons for using each one of them. The first of the four is called geographic segmentation. And geographic segmentation is exactly what it sounds like. It's based on location. So that could be region, city, state, province, postal code, even mailing route or neighborhood. The second approach is based on measurable statistics and who you're marketing to has a lot to do with whether you're going to choose demographic or firmographic segmentation.
Demographic segmentation is for people, so it's based on age, gender, income, ethnicity, even things like marital status or whether you have kids or not. If you're marketing in a B-to-B scenario, or business to business, you may use something called firmographic segmentation. So what demographics are to people firmographics are to organizations. So that's measuring based on employee count, revenue size, industry, their number of locations. Even things like trends over time.
The third segmentation approach is called psychographic segmentation. And psychographic segmentation is a bit more advanced. It combines the science of psychology with demographics to better understand the consumer. So this form of segmentation enhances the demographic information by adding filters based on lifestyle, personality, values. For example, pet loving city dwellers over 30, or scrapbookers between the ages of 40 and 60. The final approach is called sales stage segmentation, and it's really important. It's something you need to think about no matter what other form of market segmentation you choose to use.
The reason it's important is because sales stage segmentation takes into account what sales stage you're in, where you are in the sales pipeline. So, are you marketing to prospects, customers, loyal customers, former customers, and even are they active or inactive? And what I mean by that is, are the people on the list people who were customers in the past but maybe you haven't had a purchase in a long time? Well then they'd be considered inactive. Or are they somebody that purchases from you all the time, active? So you need to think of it kind of in terms of dating.
Marketing is like dating. I know it sounds kind of funny, but it's a relationship. So you wouldn't go on a blind date to the nicest restaurant in town, and spend hundreds of dollars on a meal when you don't even know each other, right? Well, marketing's the same way. If you're marketing to a prospect who doesn't know you, you're not going to send the most expensive high-end piece when you don't even know if you're compatible, if they're even going to be a customer, right? So you might send a more efficient low-cost format like a postcard mailer or something and you send a few of those and start to build that relationship.
They start to get familiar with you and what you offer. Maybe they turn into a customer. Once they turn into a customer, maybe you send them a folded self mailer or an envelope mailer. Once they become a loyal customer then you really pull out all the stops, right? Because you've got the confidence to do so. So, let where you are in the relationship the goals of the campaign, and the nature of your business help guide you in determining the segmentation method that works the best for you.
- Defining the mailing list
- Keeping your mailing list up to date
- Creating the offer
- Formatting strategies
- Using special packaging like varnishes, stamps, and stickers
- Leveraging technology, such as variable data printing
- Adding an Intelligent Mail barcode
- Green mail strategies
- Tracking and measuring results from your direct mail campaign