How Email Segmentation Increases Customer Lifetime Value

Posted by | January 29, 2015 | Marketing Automation | 4 Comments
customer lifetime value

Do you appreciate personal attention and communication tailored to your interests and lifestyle? So do your customers. Segmenting your emails means sending each individual prospect and customer the right email, at the right time, the way they want to receive it. Whether you are already segmenting your email or are looking to get started, here are some examples of how email segmentation increases customer lifetime value.

All customers are not created equal

Consider an example from a department store: The key attribute used in email segmentation can be as basic as whether a customer is a man or a woman. The gender of the store’s customer is the most relevant attribute and directly impacts open rates and click throughs. An email sent to a female customer regarding a men’s apparel sale will likely not be opened and most likely will end up in the trash, or worse yet, marked as Spam. To maintain relevancy with your audience, it’s imperative to communicate the benefit of doing business with you.

Not only are customers different from an attribute perspective, but they act differently as well. Making special offers or discounts doesn’t work with every customer. Considering offering other benefits or “perks” to valued customers such as VIP events and gifts. By offering benefits that appeal to the customer’s interests and lifestyle, marketers can increase profit margin and [ultimately] customer lifetime value.

Getting started with segmentation

If you are looking to get started with email segmentation and automated campaigns, here’s a brief checklist of what you’ll need to do before pressing “send.”

  1. Gather as much customer data as you can and score it against your ideal customer profile. This includes customer attributes (location, gender, etc.) and actions (products purchased and browsed, features used, etc.). Remember, the more data you have the better you can segment your audience.
  2. Personalize emails with customer-specific data. This is more than just using their first name in the subject line or in the body of the email. Remember, tailor the content of your message to be relevant to the recipient.
  3. Test offers across segments. Try offering your most valued customers non-monetary incentives to continue doing business with you and making sales and discounts available to those who have only purchased from you once. A/B testing within each segment can be helpful when working to determine which offers resonate with which segments.
  4. Review results regularly and make the necessary changes to optimize your current campaigns for profitability. Don’t lose sight of your end goal, to increase customer lifetime value!
  5. Once you determine which campaigns are working, it’s time to step back and let them do their magic. This is the great time saver of marketing automation, campaigns can run without interference while marketers get back to more important strategies and tactics.

So there you have it. Segmentation can not only improve your email marketing results but it can also increase customer lifetime value. Understanding your customers are different is one thing. Marketing to them based upon those differences is another. Take these tips and get started today!

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Lauren Littlefield

Lifecycle Marketing Consultant at Right On Interactive
With over ten years of experience in technology, marketing, public relations and higher education, Lauren joined the Right On team in April 2013. She is a 2013 graduate of the Hamilton County Leadership Academy (Ind.), and a board member of Girls on the Run of Central Indiana. She has previously served as the vice president, programming and the secretary of the Indianapolis Chapter of the American Marketing Association. Lauren earned her BA in Communication from Hanover College. In her free time, she enjoys spending time with her family, running, IndyCar and the Indianapolis Colts.

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