How to Segment a Direct Mail Audience
By Paul Bobnak | February 3, 2021
Direct mail segmentation is a crucial step in creating campaigns that are more relevant to your audience. It depends on data, which guides how your mail is planned, produced, mailed, and acted on.
Data richly deserves its 40% share (as formulated by the late direct-marketing guru Ed Mayer) of the success of a direct marketing effort. With direct mail segmentation, your data can help you deliver more of what your customers want.
When you want to drive revenue growth or need to improve your mailing campaigns’ ROI, you must overcome obstacles in your data. Accurate, reliable, and up-to-date data – as described in this data guide – enables you to make well-informed business decisions.
One way to succeed is by looking at your segmentation strategy and seeing if there are improvements that you can make. Instead of putting broad-based audiences on blast, you can focus on more narrowly-defined groups. Reach out to these audience segments with the right message at the right time.
Why should you segment your data?
Here are a few good reasons.
1. Find your right audience
With a mass mailing, you send the same direct mail package to everyone, with the same offers, the same text, and the same pictures on it.
You also get a bulk mail discount out of it, so not too bad, right?
But it also means that you’re not really targeting an audience. “Everyone” is not your audience. Ideally, your mail campaign should only be going to specific groups of people who have something in common, and, therefore, would potentially be interested in your product or service. You just have to figure out who they are.
2. Improve the customer experience
Based on their segmentation factor, parts of your audience have different expectations of your brand, and different requirements of how their preferences, needs, and wants can be met. Your mail can create, and then build on, how your customer experiences your brand. With insights about your customer’s or prospect’s segment, you can use copy and images on your mail piece that are more likely to get their attention than a static piece, and then build their interest.
3. Lay the groundwork for more precise targeting
With your direct mail, you have the option of highlighting those aspects that separate one grouping from another, whether you use copy or other creative elements, such as images, graphics, formats, etc. Analyzing the results of your campaigns can help you discover or develop insights for future mail about what works for which audiences.
4. Save time and money
Let’s cut to the chase. In any direct mail marketing campaign, you have expenses to consider, like planning and development, printing, and postage.
When you align your product or service marketing by targeting specific segments, you’ll improve your campaign ROI.
Here’s a good example.
Picture yourself as a retailer who sells all kinds of electronics online and in brick-and-mortar stores. You usually mail a few pieces with a broad product focus to your entire data file. But now, you decide to break down your database into customers that buy headphones vs. ones that buy tablets. With that information, your direct mail campaigns can center on those products that match the preferences of your audience segments.
Greater relevance means more retention, more sales, and more customer loyalty. Remember to order your segments from highest to lowest priority based on what you know about each one and how mailing to them will best fit your goals. Targeting the segments with the most potential first will generate returns that you can invest back into the marketing budget to apply to other segments.
4 Ways to Segment Your Direct Mail Audience
Many possibilities exist to segment a customer file. To be successful in the marketplace, your direct mail marketing should try different variables, either alone or in combinations to see what serves your audience best.
- Geographic, which uses the customer’s or prospect’s address to target prospects, can drive response. In its simplest form, geomarketing selects by state, city, zip code, or by street or neighborhood. You can focus on customers living within a certain radius of a retail location if that’s what your mail is promoting, or a particular want or need is shared by people in a specific area.
- Demographic includes a wide variety of variables, such as gender, age, ethnicity, income, occupation, and education level. With the segmentation of your buyers and prospects, you can understand how your product or service can be targeted depending on their wants and needs. Just be sure to have the most current data and adjust your mail as needed.
- Behavior is one of the most reliable segmentation factors because it reflects what your customers or prospects have done. One way to incorporate behavior is to list your customers using the RFM (Recency, Frequency, Monetary) model. Your best customers have bought the most recently, buy most frequently, and spend the most money. Ranking them by quintiles (groups of 20%) lets you prioritize what customers should get more of your attention, especially with data-driven offers and direct mail to keep them coming back.
- Psychographics looks at attitudes and values as well as interests, and more broadly, lifestyle, that all form personality. With this deeper dive data, you can connect customers and prospects with products and services that match well.
Wrapping it up
Customer-centric direct mail segmentation drives value and engages prospects in a meaningful and relevant way.
If you need help, the data management experts at mailing.com have years of experience working on complex campaigns using direct mail demographics of all kinds. We can help you put together a complete and cost-effective direct mail campaign to accomplish your goals quickly.
Drop us a line or call us! We’d love to show you how you can put segmented direct mail to work in your next campaign.