Segmentation in theory and practice

In theory, four simple steps will lead to increased response rates:

  1. Select the target group
    By selecting one or more characteristics for segmentation, you ensure that all the members of the target group have ‘something in common’.
  2. Customise the message
    That ‘something in common’ then becomes the focus for the offer. You can now customise the body copy of your message.
  3. Focused promotions bring higher response rates
    Because the target group is clearly-defined, the result will be a proportionally higher response rate.
  4. Relevance adds up-lift
    Because the message is customised to ensure high relevance, there may well be an additional uplift in actual responses.

In practice, you’ll get greater effectiveness – but a smaller volume of successes.

Suppose you can actually identify the ideal ‘Pareto segment’ – a characteristic that identifies the 20% of the contacts who account for 80% of the positive results. What then?

  • Since the target group is just 20% of its previous size, the successful responses will certainly represent a higher percentage rate.
  • But the fact remains: the quantity of successful responses will still be down by 20%.

At this point you may be asking yourself “so why bother?”

The answer is that you don’t do segmentation to gain a larger quantity of responses from a single offer.

You do segmentation to optimise the total quantity of responses that you get from multiple offers.

 

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