SEGMENTATION Secrets to Reduce Churn & Skyrocket Sales in eCom Email and SMS Marketing - EP4
Jimmy Kim and Chase Diamond break down segmentation for email and SMS marketing using RFM data and five key segments: prospects, lapsed customers, high-value buyers, frequent purchasers, and discount shoppers. Real-time sports campaigns generated six-figure revenue. Avoid over-segmentation, static audiences, and relying on assumptions instead of actual behavioral data.
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I need them to be spending my average $100 in the store. Why am I sending the same offers I would give my $100 customer, the $20 guy?
2024 Super Bowl champion. Obviously they had a great list. It was diehard fans around things that are fanatic sports, very targeted. And we did this for every sporting event and it just printed money.
You create the bucket that is needed today, but if people are making changes, like my segment to that next day should never be the same.
If customers need, let's say, a multivitamin and they for whatever reason drop out, you are doing a disservice to your own brand or to your client's brand. If you don't know RFM, if you don't know segmentation, If you don't know customer lifecycle and marketing, you are causing them to lose high-value customers because otherwise customers wouldn't and shouldn't be leaving if you did your job.
Yo, yo, yo. What's up, Chase?
Hey, man. How are you?
Good, man. Just reading the newsy from this today, man. It's another banger we dropped out today.
Another great one. That was newsletter number 2, right?
Yeah, just number 2, man. One to very many. I hope we can continue increasing the speed of these things. It's a lot of work to put this content together, but grateful for the team, of course.
Yeah, getting a lot of great feedback from people. So we're clearly on the right track, which I feel pumped about. Yeah.
Well, let's kick this thing off. We got a lot to talk about today on segmentation, and we're gonna talk about how to increase engagement and how you use it, and we're gonna talk about all things segmentation, man. So let's do this in 3, 2, 1.
From the open to the click, they're the masters of the flow. Just watch your list grow and your leads turn to go. Did we retain you so far, or do we have to extend it? If you want results, you know you gotta send it. Yeah. You know you gotta send it. Yeah, you know you gotta send it. Yeah, you know you gotta send it.
What is up everyone? Welcome to Send It, where we discuss everything and anything retention marketing, specifically in email and SMS marketing in e-commerce. My name is Jimmy Kim and I'm here with my co-host Chase Diamond. Dude, Chase, big, big news alert. Let's start out with the fun news. We got our first sponsor and usually we wouldn't go crazy here, but this is always very exciting.
Dude, I am so stoked and so appreciative. Can we talk about them?
Yeah, man.
I think We should, let's start it off. So special thanks to our very first podcast sponsor, Apparoo. They help you boost conversions, retention, engagement by helping you effortlessly convert your Shopify store to an app with their mobile app builder.
Yeah, and it's just apparoo.com, right?
Yeah, it's apparoo.com. I'm sure we'll have some special links to get you guys hooked up with something cool, but this is all a little bit new to us right now as we're kind of rolling this out. But yeah, I'm excited, man. I met Abit a couple years ago actually at a trade show. I think I saw them doing it and they were still in that like really early startup phase. And I remember asking him, hey, what are you doing? And they told me something and I was like, Hmm. Another competitor has arisen. You know, with Tapcart being the market leader right now, you know, I know a lot of people have had their challenges and I know it's a great product too, I've heard. But, you know, everyone's always going to have it. It sounds like there might be a great alternative here in the market today.
Yeah, it seems very similar to what you did with Klaviyo, right? Klaviyo was the market leader. They were ripe for disruption. Sendinblue came in and kind of disrupted. And it seems like Appbrew is now doing that to Tapcart. Heard nothing but great teams and kind of talking with their team and kind of the clients already. We've heard really great early feedback.
Yeah, they've got some big clients.
Pretty cool, man.
We'll talk about more And one of these days we'll get him on the pod too, because he's got a lot of theory and talk about how retention works between mobile and email and SMS. And I'd love to hear the point of view and we'll bring him on in a later one. But for now and for today, dude, let's talk about the power of segmentation. We're talking about how to increase it, how it works. We're going to talk about maybe like best segment behavior and we'll even give some best practices. We're going to make this one filled with lots of valuable, juicy content. We want people listening to this multiple times. And I think that's exciting. But before Before we get into there, I wanna start out with something hot off the press. Just like last episode, I figured like we'd do something. So what did we talk about last episode, Chase? It was the branded images, right?
Yes.
Guess what?
What?
You're supposed to say what here.
Yeah, do what?
Apple, Apple has suddenly stepped up and said now they're adding brand verification to their logos of their emails. So on Apple Mail apps, which we haven't, they're gonna announce that you can get something similar to what Gmail announced where you can have your logo and even a blue check mark ultimately, and it's gonna be rolled out later this year. What do you think about that, man?
Pretty cool that Apple's listening to the podcast. They heard last week what was happening with Google and they decided to jump on the train. So I love it.
Yeah, 100%. It was definitely us and Apple listening to our pod. That's, we're gonna go with that. But dude, that's exciting. I think the branding side of things, and though we've not seen any lift, you know what happens when everybody has it? You actually stand out by not having it. So who knows how this is gonna all work out?
Yeah, that's interesting. Well dude, I'm pumped. I can't wait any longer. Can we talk about segmentation?
Yeah dude, let's talk about segmentation. But before we jump into segmentation, because it's a scary word, I think that there's this like rudimentary level understanding And I remember last week we talked about this on the pod. We want to take people to a basic to intermediate understanding today. That's our goal here today in this pod. So let's start off, Chase, with the most general broad question that I know that people who are listening, especially people who may not be very seasoned marketers yet listening to this, or people who aren't really in the weeds, I guess. Let's talk about what is segmentation?
Yeah, I think the easiest way to think about segmentation. So starting with an analogy, you know, if you think about a pie, right, there's the entire pie that you purchase. But when you're at an event or a dinner or whatnot, you have to slice up pieces of the pie for different people. Some people are gonna want a smaller sliver, maybe some of the kids in the group, and then maybe some of the adults might have a big piece or they might go back for seconds, right? So when you think about the pie and those different slivers, segmentation and lists are kind of comparable. So the list is the entire thing. The list is the pie, and the segment basically is the pieces. So it's the slice of the people in your audience or in your group that are relevant. And there's different types of segments, right? So the way in which we build segments depends on a number of things. Things like someone's behavior, things like their demographics, things like their psychographics, and a bunch of others. So the data that we have on our customers or our subscribers, should I say, is what allows us to distinguish between, you know, a buyer versus a non-buyer versus a repeat buyer versus someone that's in a specific group. So long-winded, segmentation is the ability for us to slice and dice lists into meaningful chunks that allow us to add contextual data and therefore contextual messages to kind of what we're going to send out, which makes it a whole lot more relevant. Does that make sense? Anything to add?
No, that was perfect, Ben. I mean, I love the analogy with the pie. It's easy to understand that way, the whole slicing of a pie versus the whole pie and using a lot of characteristics. That totally makes sense.
Yeah.
And with that, kind of to expand on those characteristics, right? So like, I think the 3 primary ones that you and I kind of talk about and think about are one, behavioral, right? So this is based off of user actions. So say someone has purchased in the past, say they've opened an email, clicked an email, right? They viewed a product. So their website activity. So what are the behaviors that someone's taking within an email or within an SMS or on our site? I mean, this is really ideal for us to create experiences that match their interaction, right? If they are viewing a product, go send them a browse abandonment email about that product. You know, if they are, you know, clicking on emails and they're going to the cart, you know, and they're not buying from them, the abandoned cart. So those types of things are a big type of segmentation. The next one is demographic, and most people are familiar with this, but it's characteristics like age, gender, and even location. So this is effective for doing kind of broader audience traits around maybe it's a campaign in the United States to people on the West West Coast right now, kind of in the winter, fall months, it's still pretty warm where I am right now. I'm looking at the weather, it's still 86 degrees. I'm still going to probably be buying t-shirts and flip-flops and sandals. But on the East Coast, right, it's probably starting to get a little bit chillier. Maybe you should start sending campaigns to the people on the East Coast, right? So the demographic based on the location, you should start sending them jackets and hoodies and kind of pants and closed-toed shoes. And then lastly—
Hold on, but you know what, Chase, I'll tell you something on a funny note here. You know, I've been out here in Austin for about a year now, and we're starting to dip into like the 70s, and I actually think it's cold. It's really Messed up.
Yeah. And you were from San Diego, right? Like the best weather in the world.
Yeah. I don't know why I feel like this is cold, but it's funny. I've put on a hoodie in the morning when I'm taking the dogs for a walk because it's cold and it's 70 degrees.
Yeah. Your body just adjusts, right? Like so quickly depending on where you are. And I think that's why these kind of, you know, demographic type segments work so well if you leverage location and some other things. Right. And they're not just ors. You don't leverage location or age or gender. They also can be ands. And if the list is big enough, you know, leveraging ands makes a lot of sense and allows you to go from being like somewhat targeted to being super precise. And then the last one before we kind of talk about, you know, some of the benefits and everything else is what's called psychographic segmentation. And that's basically what are people's interests, values, their lifestyles. And the more that we understand, you know, about each kind of subscriber on a granular level, the more that we can create ultimately messaging that resonates with their personal motivations and their preferences. Because, you know, there's groups in these buckets of these segments that kind of act similar. And there's also people that are going to act very different off the things that we mentioned.
That makes total sense, actually. Yeah. No, I never heard of it that way, but it makes a lot of sense. And I also think that a lot of this can be layered on with like that first-party data, which is like asking the user for information. Like when they opt in, are you a man, female? Are you shopping for a gift? You know, all those questions you ask are all building up this profile ultimately that you can segment against.
Yeah, 100%. And, you know, some of the pitfalls of not using segmentation, I think we should talk about, right? Like the messaging is really generic, lower engagement, higher churn. Can we break down some of the benefits of segmentation for email and SMS?
Yeah, dude, I think talking about the benefits is always great because we've defined what it is and what it does. Now let's talk about benefits. I think that's it. I'll let you kick it off since you're on a kick here. So why don't you kick it off and I'll, I'll give you an idea back as I think about one.
Cool, right? So all the data out there, all the reports out there, it's no surprise that the more segmented you are versus batching and blasting, that's going to lead to higher opens and click rates, right? The more personal your messaging is, the more relevant it's going to come across, and therefore the the higher the likelihood that someone's going to engage. And email really is the best channel to nail the holy grail of the right person, the right message at the right time. Segmentation allows us to deliver on that promise.
Yeah, I love that. You know, the right person, the right time, right message. That's always good. The second thing I'm going to go the other way with it is I can think of is we can reduce unsubscribe rate. You know, the reason people unsubscribe to an email chase is because the content wasn't relevant and they're opting out because the message isn't resonating. They're not in the market, whatever that might be. But, you know, a benefit of segmentation is by understanding, using their data and how their behavior has been, is you can actually avoid messaging the wrong people that are maybe not interested or it's out of cycle ultimately. That's a good one I can think about. What about you? You got another one?
Yeah, 100%. So we talked about more opens, more clicks, less unsubscribes, right? So naturally that's gonna increase our conversions and our revenue, right? The more specific we are, the better the messaging, right? The more likelihood of people clicking and opening and not unsubscribing just gives us higher likelihood of actually converting those people either A, for the first time, or B, as a repeat buyer. So segmentation is going to allow you to do so much more with so much less.
Yeah. And then the last thing that I can think of just to add on to that, as you kind of talk about increasing conversions, you know, what it also does is it lowers the churn of customers, attrition of customers, because if you're giving customers more relevant messaging, more relevant personalization, they will stay on longer because they're resonating and connecting with you ultimately.
Yeah, 100%. And I know you kind of when you started on email, The big thing that you learned was RFM, and I feel like RFM would be super applicable here. Do you mind giving us, you know, the kind of the spiel of RFM?
Yeah, man, I love RFM because everything that I base principles off of when it comes to email and retention in general is very much so. I'll break it down like a, like a newbie first, and then we'll kind of dive into it like examples, but I can give you some ideas. So RFM, it stands for recency, frequency, monetary value, and it's a really powerful way to segment customers for most more effective messaging ultimately, right? So let's, let's break it down. Recency, which is the R, right? This is, how recently customers made a purchase or has not made a purchase, right? This can be recency of how when they made a purchase or if they made a recent opt-in or however they joined your newsletter or your customer list or whatever it might be, right? So example, a customer who's purchased in the last 30 days can be segmented to a new customer group. But then once they're out of that 30-day, they could be into the next segment group, for example, right? That's using recency. So like personalized message might be something like, hey, thank you for your recent purchase, right? Or like, here's how to take care of this new product because you know what they purchased, right? Through that side of things. And then you jump into frequency, which is the RF, right? RF is how often your customer buys. Now, this is tricky because it really depends on your brand ultimately. Some brands, you're going to have something that reoccurs monthly. Some people buy 6 months. Some are frequent buyers. Some are repeat buyers after they've enjoyed the product. I mean, there's so many different reasons why your brand may act differently. But for you to understand what your frequency model for your business is really important so that you can ultimately figure out when to be in front of them. And also start driving value ultimately, right? So like if you think about a personalized message there, it's like, we noticed you've been a loyal customer. As a thank you, here's an exclusive early access to our customers, knowing that they had purchased 6 months ago and the average cycle might be 6 months, for example, right? And then the last one, and this is always my favorite, which is the monetary side. This is the place that I like to spend a lot of time on because I always believe, you know, as much as retention and percentages and all this, my wholehearted belief, Chase, is if you optimize for CLTV, the rest works backwards, meaning like all the things that you got to work on really require optimization of how much a customer spends or the monetary. So a high-value customer, and I've talked about this before, high-value customer is very different than a low-value customer. And to me, if you're not splicing up your customer values, right, I've got a customer who spends an average $20 with me, I need them to be spending my average $100 in the store. Why am I sending the same offers that I would give my $100 customer the $20 guy? You know, this person's a low buyer, so you want to offer them low-value products potentially, or more heavier discount products because you need to get them off the bench and get them to do stuff. Where a high-value spender will feel appreciated and motivated and continue their purchasing when they're offered with cost options that are more applicable to what they might be purchasing in that side of things, right? Does that make sense when you think about it? Like, that data is telling you what the type of buyer they are and not saying it's perfect. But it's the most easiest way to kind of generically go out there and reach and say, hey, if this person spent a lot of money, they're more likely to buy more expensive goods from me. You know what I mean? And then the second part is obviously the goal setting is like, I want to tier my people and I want to take the low people and try to get them to the high level of purchase.
Yes.
Yeah.
So I think we're all clear on like the basics of like what RFM stands for. Can you break down now like, you know, what the, I guess the benefits are and like how implementing RFM can actually lead to like customer retention and boost engagement? Like, so we understand like the definitions, like what does What does that actually next step look like?
Yeah, so when I think about RFM, what does it do? I think it breaks down to 3 things. This is what I think about. So the first thing is enhances customer retention, right? So when you're targeting customers that are at risk or using data, your messaging is so much more personalized because, hey, if someone hasn't purchased in 90 days and we send them a, we miss you, it's been 15% off, you can't send that same message to a customer who's only been gone for 10 days, for example, right? That frequency of timing is gonna help that. The second thing is it also is gonna build loyalty to those frequent buyers. When you start recognizing these buyers are buying over and over, and you're rewarding them by saying, thanks for continuing to buy, here's another gift, here's another discount, here's another loyalty, that ultimately enhances that relationship. So using segmentation allows you to speak to the customer even though they're in a digital aspect in a very broad, like targeted way where you're still going after the data and using those generic data points to be able to drive that enhanced relationship ultimately. And then the next one I think is always engagement. Look, the monetary value will help you create more personalized offers. I think knowing what I said earlier, and I'm not gonna dig into this, but knowing what I told you earlier, if you know what they're spending And you're offering them products based around what they're spending. Well, dude, that is really part of personalization if you think about it. Because if I'm a person who buys $20 products, don't send me $100 products. But if I'm a $100 buyer, don't send me $20 products. It's pretty simple actually. And it's a very clear thing. This is the whole thing where people move up and down on the chain of like price value, but ultimately it comes back to the whole idea of CLTV and using that data to be able to drive that. So that's that. And then third, Ben, I think the third and fourth are all the same. It's like improving your open rates and clicks and reducing your churn ultimately. How you're personalizing that experience based around their data, your chances of improving your opens and clicks because of the relevancy of those messages are there. But it's also going to reduce churn because you know where they are in their journey. Like, hey, these customers are fresh 7-day customers. Maybe they're going through a special set of, you know, educational with small bumps and upsells, or you're taking them with a more like, we've missed you approach when time goes by, right? All of those are just more relevant. Like Chase, if you haven't visited and purchased from a brand, you love the brand Built, for example, right? You're a big Built guy. And if in 60 days they sent you an email and said, man, we missed you, you haven't bought anything, that feels relevant. Even if it's generic, it's still relevant. You know what I mean?
Yeah. Yeah.
So I think those are, those are different things. But here, recap. Recency, customers who have purchased recently or haven't purchased in a while. Frequency is the rate of repeat purchase. And then monetary is the spending volume, right? You take those 3 together and you ultimately be able to curate a strategy around all those little micro segments. That is segmentation at its core. to what we call RFM. Hopefully that made sense, man.
Yeah, for sure. And I kind of got a hot take now actually thinking about that. I think, you know, like marketers are so important, right? I think the reason in which companies lose high-value customers for good products that should be purchased often is probably because marketers are not doing a good job. Marketers suck at marketing, right? Like I really think like if customers need, let's say, a multivitamin and they've been with you for a while and they, for whatever reason, drop out, it's because marketing didn't do its job of keeping them as a customer. So I think my hot take is if you don't know RFM, if you don't know segmentation, If you don't know customer lifecycle and marketing, you are doing a disservice to your own brand or to your client's brand, and you are causing them to lose high-value customers because otherwise the customers wouldn't and shouldn't be leaving if you did your job.
Well, if you think about it in a retail sense, Chase, like if I have Mr. Jones who comes by and buys the most expensive things every Friday, how do I treat Mr. Jones when he walks in that store every Friday? You know, I roll out the red carpet and I want to bring him in. It's the same thing, I think, in a digital effect. And you're absolutely right about it. I always have this weird, and I'll take a second hot take to this, is I believe automation tools have ruined the modern marketer often. And what I mean by that is when I learned RFM chase, I used to download it onto an Excel sheet and then use different pivot tables to lock in the segment. Then I would upload the segment back into my ESP and then send to that segment. So that active strategy, man, was a lot of work, but that was fulfilling to see the end result. But today, because it's so easy, it almost takes— people are taking it for granted almost.
Yeah. People set and forget it. They're just using kind of general triggers. They're not kind of layering and cutting down more specific. It actually, you'd think would the opposite. Like when you were doing it, it was so hard, you would've think that friction would've stopped you and prevented you. Whereas now it's almost too easy that like people kind of just gloss over it.
Yeah, that's exactly what I'm saying. I think it's really interesting how people think about it. But dude, let's talk into it. Like I know I explained RFM, we explained the benefits. Everyone's probably like, okay guys, we get it. Well, let's talk about actual key target segments. 'Cause people ask me all the time, Chase, Chase or Jimmy, they're like, what are the key segments that I should use for e-commerce? Well, let's put 'em out there and tell people what you should be thinking about.
Cool. So one that comes to mind to me, which is gonna be the largest kind of segment that you're going to have is prospects, a.k.a. non-purchasers, non-buyers, right? Just the reality is, you know, if you have a big list, most of the people probably have not bought from you, hopefully yet, right? Or, you know, hopefully they buy from you at some point. And the goal right here on that, really the trigger we're looking at is someone has not made a purchase. And with this, we want to look at a couple of things. We want to make sure that they're engaged. So we want to look at when did they opt in and what has their behavior been? So we talked about in the very beginning the behavioral segments. What are they doing on the website? What are they doing within emails? What are they doing that SMS or what are they not doing, right? So taking all of these factors into kind of consideration and figuring out like, what do we know about this person? And this might be a little bit kind of over people's heads, but like there are kind of some cool things you guys can do to enrich the data that you guys have, whether it's a third-party thing or a first-party thing. And like making sure that you literally tag people's accounts based off of what they're doing. So I know within SendLane, I know within Klaviyo, I know within and, you know, number of ESPs, there are ways in which you can set up links that automatically add properties to someone's profile based on what you're doing. And when I was working with this company called The Chivery that was owned by the media company The Chive, they had so many different SKUs of shirts that like for us, we were trying to categorize, you know, these 100 shirts into comedy or these 100 shirts into sports or these 100 shirts into lifestyle. So we started tagging things like the categories that people clicked and the specific item and then tying those back to a category just so we can understand, okay, based off So based off of behavioral analytics or predictive analytics, this likelihood based off this person's name is they're a male, right? Just based off their demo, a lot of people were male or it was women buying for males. They also clicked on X, Y, and Z category. Okay, so they're a male, they're probably in this age just based off the demographic that we know, and they're clicking on t-shirts around sports. So let's start showing them and trying to figure out based off their location what sports teams they're going to like, right? You're in Texas, you might like the Cowboys, you might like the Texans, you might like whatever, the Astros, right? You might like certain teams based off your location. location. So can we figure out like which teams you like and therefore serve you content based off of that? Does that make sense?
Yeah, no, that makes total sense. I mean, using the behavior and data, especially because as you mentioned it, man, your largest dataset is often your prospect list and it's what people gloat over, but it's ultimately the one that they're probably not maximizing the dollars out of either.
Yeah, 100%. And actually one more specific example. So with that same brand, we always did shirts around like big sporting events. So the Super Bowl, the NBA Finals, the NHL Finals, right? The Stanley Cup, all those types of things. And what we basically would do is we would have the 2 teams that were playing, let's say in the Super Bowl, right? Let's say it's the Cowboys and let's say it's the Raiders, right? We'd have 2 different designs and 2 different emails ready to go. And whatever team won, as soon as we saw the winner, let's say it was the Raiders. I know you, I think you like the Raiders, right?
Yeah, I'm a Raiders fan.
Let's say the Raiders won. We'd have that email queued up to the specific segment ahead of time of everyone that lives in and around Oakland, right? Where they were originally from. Now it might also be Oakland plus, you know, Las Vegas, Nevada. data. And essentially what we would do is as soon as they won, within minutes of that happening, we would send out an email saying like, Jimmy, you know, based off what we know about you, you're probably interested in celebrating the fact that the Raiders just won the Super Bowl. Here's, you know, 3 t-shirts that we thought you're gonna love all about the Raiders being the 2024 Super Bowl champions, right? And dude, these emails would print. Obviously they had a great list, but we were driving tens of thousands of dollars in revenue within minutes of sending that, right?
Yeah.
It's just insane. I think some of those campaigns had done like 6 figures off of like, I don't know, an email that went out to 50,000 or 100,000 people because it was diehard fans around things that are fanatic sports, very targeted, right? And we did this for every sporting event and it just printed money.
I can only imagine. I mean, it makes total sense. And when you get hit with something that's not only emotionally triggering but also timely, man, that's like the one-two punch.
Heck yeah. So that was probably pretty clear on non-buyers, right? The next one is, you know, inactive or lapsed customers. So these are people that had bought previously, but they haven't bought in a long time, right? So when you think about what Jimmy mentioned around RFM, right, like the recency and kind of frequency, right, like these people have bought in the past, but they haven't bought recently at the very least. Maybe they haven't bought frequently either, but these are people that haven't bought in a while. So with these, right, we have to be a little bit more specific. And I think this actually can be more than just email and SMS, but I would definitely hammer them with some emails and SMS with personalized offers, some incentives to get them to open and engage and really kind of just express like what you've been up to, what are the bestsellers, how they can get back involved, kind of what they're missing out on, really driving kind of the psychological elements around like FOMO and kind of scarcity and those types of things. But I also think too, like showing these people retargeting ads on Meta or Google, whatever platform, kind of just following them around like, you know, we miss you. Here's the latest and greatest that we've been up to. Here are the special offers. So because these people have been inactive or lapsed, we're going to try our best hand at email and SMS. We also need to be creative and look at other platforms and track them around the web. I know that sounds creepy, but we need to be kind of in their face around the web to kind of remind them about the company and hopefully get them to reengage and hopefully buy again from you type of a thing.
No, I love that. And, you know, they call— people call this a win-back segment and different things that people might put out there. But ultimately, you're right. Like a customer is way more valuable than a prospect always. And spending the time trying to win them back is always worthwhile when you think about a customer.
Yeah, 100%. And talking about customers, right? Like some of our best customers are what we call high-value customers, right? So these are basically people that you want to continue to nurture and handhold and build a relationship with through the likes of like loyalty programs, you know, hitting them with VIP offers, getting them special campaigns, you know, giving them early access. Maybe you have like a Slack group or a Facebook group or a Discord group, you know, whatever the kids are doing these days with kind of your best people in there that you're kind of Running behind the scenes. They got special access to you. Maybe you're writing them kind of handwritten notes and letters. Maybe you're sending them, you know, mailers, right? Doing different types of things to make sure that these people stay really close to you. So that way you can really maximize kind of their lifetime value with you.
I love that one. You know, when you say like just like high value, I'll throw a segment in there that I love. This is like one that I think is really powerful. I always say frequent buyers. So we're not talking about high value customers. We're talking about people who are buying at high frequency and regardless of how much you're spending, because why I love those people are those are the people that will just keep buying and buying and buying, and they're usually heavily engaged and they want the most exclusive stuff, the early access, the loyalty perks. Those are like their best customers because they don't just buy one thing and they don't buy a lot of it in value. They'll just buy constantly over and over, a t-shirt here, a pair of shoes here, whatever that might be. So that's one of my favorite buyers and a very popular segment in my opinion.
Yeah. And on that note too, like I think like the product launches and collection launches, like these are those buyers like you're saying, right?
Yeah, absolutely.
Anything new and great and the latest and the greatest or anything that was popular that came back in stock, these frequent buyers are going to eat that up. And then lastly, to kind of round out the last segment before we talk about some other types of things, we have our discount shoppers as well, right? People that have either purchased hopefully, or potentially people that are just clicking on discounts but haven't bought yet. Maybe they're waiting for like the best discount. So these are people that are kind of more like, I guess, value shoppers, right? They want to feel like they're getting something special. They want to feel like they're getting the upper hand and getting a deal. So, you know, kind of coming up Black Friday, Cyber Monday, right? The discount shoppers This is where they're coming out of the woodwork like nobody's business. They're gonna buy from you.
That's exactly what I was gonna butt in and say to you. I said Black Friday, Cyber Monday, that is your discount shoppers showing up in full force right now. Definitely, definitely should be aggressive on those people because that's what they're looking for, a deal, right?
This is their buffet, right? Like, this is the buffet where they're coming all out to eat, taking it all.
That's the time. I mean, their card's open the best. I'm a firm believer of that. All right, so we got non-purchasers prospects, right? That's an ideal segment A. Then we've got the inactive and lapsed customers. So these are people who've purchased but have not engaged after a certain bubble. We've got your high-value customers, you got your frequent customers, and you got your discount customers. So I like that. It's like prospects, your inactive customers, and you got 3 segments of your customers: the high-value, the regular buyers, and then the discount shoppers. And you kind of throw them out there, and you've got 5 great segments that you should be operating a business on right now. What do you think? Do you think that's a good 5?
Those are great. Let's talk about some mistakes to avoid now. We talked about the segment.
Yeah, you had to go there, Chase. We had to go to mistakes, man. Well, let's hear it, Chase. I know you've been itching for this. You love— Chase loves being like, we could do this better. So go ahead, Chase, Start it off. Tell us some mistakes.
Segmentation is so important, but some people get too granular. They over-segment, right?
Yeah.
So they are going to basically take an audience that could be good and could be kind of where the juice is worth the squeeze, and then they just go overboard and they just make it like 5 or 50 people. And it's just like the reality that people open enough, click enough, and convert enough on such a small segment, it's just not there, right? We do need some volume. We do need some numbers. And ideally, right, like we're talking about people that have bigger lists or decent-sized lists, right? You want a segment that at minimum has a couple thousand people, right? You know, if you can get into the tens of thousands, great. I know that's not realistic for everyone, but there's no point in sending an email to 100 people in a segment. There just really isn't. That's my personal opinion. Do you agree or disagree with that?
I agree, man. I think email is a volume game, man. It's all about volume. If you don't have volume, it really makes it hard to do anything.
Exactly. So I'd say over-segmentation is a big one. Although you do have to segment, don't, don't miss out on that. Just don't be too granular. Use the 5 that we talked about, you know, 2 minutes ago.
What I always say this on the internet, I say focus on your 80%. Don't try to over-optimize on things. Focus on the 80%. That's good enough. Because in email, especially being a volume game, 80% is more than enough for a good targeting experiment.
100%.
What about the next one, Chase? You want to do one more? You did over-segmentation.
So I think on the opposite of that, I'd be remiss if I didn't say under-segmentation, right? So we don't want to go too granular. You don't want to go too broad. You want to find kind of that happy medium, enough juice where it's worth it kind of to put in the work. Because again, like, you're gonna have to create design, you're gonna have to create copy, you're gonna have to go through the time of running A/B tests. You want it to be, to be worth it, but don't under-segment, right? We talked about the 5 different types of segments. A lot of times the mistake that people make is they just do non-buyers or buyers, right? And it's just not specific enough. Not all buyers are the same. Someone that bought, like we talked about, a high-value item shouldn't be receiving, you know, the cheapest discounted stuff. The cheapest discounted person shouldn't be receiving the highest premium, no discount product. So don't under-segment as well. You have to find that happy medium between sending to enough people versus sending to too many, right? Don't batch and blast. So it's kind of this line You have to find, but the more testing you do, kind of the more you review your data, the more that you understand this, the easier it'll get to find like that equilibrium where you're maximizing recipients without getting too kind of broad. What about you? What do you got for us?
I love that one, by the way, under-segmentation, because I see that happening more often than the over-segmentation. I see both sides, right? I see people going crazy on one side and they're going like 50 different variables and drilling out these small audiences. And then I also see people who are just using the broad Like engaged all 90 days, right? That's under segmentation happening at its core ultimately. So if you're hearing this and you're not even splitting your customers and prospects out, well, that's a problem. And then the third one, I guess, and to me a third mistake that I can think of is people ignoring behavioral data. And you know, like people are focused on all this data, their product purchase, but sometimes they don't look at the depthness of what you can actually get on data. Obviously opens and clicks, that's pretty obvious, but like purchase history, their behavior and browsing activity, you know, what they've done, like did they recently added a product to a cart or didn't add a product to a cart?
Like these little are really important.
And that leads me to number 4. Number 4 is the one thing that drives me crazy about people with segmentation that they do is they pick the static setting and they don't let the thing be dynamic.
Yes.
And what, what you fail at with that is very simple. You create the bucket that is needed today. But if people are making changes, like if I send this email out today and I send it to this segment, my segment to that next day should never be the same because people purchased, hopefully people made action and I'm following them up in different funnels. So we shouldn't be using the same thing, but failing to update their segmentation by using a static audience and just carrying it out for days and days drives me wild. It should be always dynamic when you can, when you have the option, unless it's a very specific reason it needs to be static.
Man, that's such a great one where like I do that like naturally and intuitively, but I've never thought necessarily about doing that. So I gotta imagine that's probably like slipping people's mind kind of over their head where it's like, oh wow, like that's such an easy mistake to make. So that's a great one.
Yeah. You got another one for us? We've done, we've done about 4. Let's, let's do like 10 of these. of these.
Okay. Yeah, I got a couple more. So I got one and then we'll kind of go back and forth, I guess. So, okay. The next one for me is over-relying on discounts for segmented campaigns, right? So when we're going to hone in and we're going to target specific people, we don't need to use a discount in every single email. We just don't, right? I think a lot of people are like, I don't know what to send. I don't know what campaigns to send. Flash sale, right? And then every email ends up being like a flash sale, right? And the more that we use flash sales, the more that we're training our non-buyers and our buyers, frankly, to look out for discounts, right? And it's like, we're just going to erode profit margins. Where therefore, like, once you get into the solution and kind of the habit of always sending discounts, like you are therefore a discount brand. And the only way that you can drive the people that bought before on a discount is to get them again with a discount in the future, right? So making kind of things that are personalized, early access, recommending products based off what you know about them, sending really value-driven content, getting these people to engage and inherently they're going to buy, right? Like if you have a good product and it's not like thousands of dollars, like you don't need a discount necessarily, a $50 product or a $25 product or $100 product. You can get people just based off building trust and and showing them that you are the best provider on the market above and beyond just relying on discounts.
And the reality is, man, like how much of a discount are you giving? $20 off of $20, $10, $7. If you can't overcome that with some good old nurturing and marketing, I feel like that's like just core 101 of being a good marketer, right?
100%.
Yeah. All right, here I got a number 6 of a mistake I've seen. People don't go back after they've created their segment. And what I mean by that is people will go and create their segments, but they won't check the effectiveness or they'll muddy that segment by adding it with 8 other sends all at the same time and audiences. Send it out and they have no idea if the segment worked or not and they just continuously go after it. So my mistake that I see often is people are not, they're not iterating or optimizing around those segmentations. That's another one. Got another one, Chase?
And building on that, right? Like I guess the 7th tip technically would be when people are just building kind of segments based off assumptions, not the data, right? So if they're not reviewing the data that you're talking about, they're just continuing to go off their gut and you have no indication of whether your gut's right or wrong. Sometimes you're gonna be right, but a lot of times you're gonna be wrong. A lot of times I've as to like what people tell you what they want versus the actual behaviors that they take, right, and do are very different. Everyone says in a survey, oh yeah, I would buy this thing or I would buy this product if you launched it or released it. But the people that actually mean it are the ones that take out their wallets and swipe their credit cards, right? So don't segment off assumptions. Look at the data like Jimmy's talking about. Go back and study or else there was no point to do the testing in the first place.
I love that one. That one's such a simple one. Assume, right? Stop assuming stuff. Use the data, right? All right, here's another one we think about. I see often is like people segment and send personalized. So they'll go off and segment. Here's the best way I say it. They'll go off and segment, they'll do all the right things, right? And then when it gets to the core of the messaging, they'll send the same message to those people. And I'm like, what was the whole point of this exercise ultimately? Why are you neglecting the segment by engagement level that you created? Don't send the same message to those who are your high-value customers that you're sending to your most inactive customers expecting to have same results. You know, you know what I mean?
Yeah. And doubling down on that, right? Like the same type of thing thing, like people ignore lifetime value and segmentation. So literally the masterclass that you gave on RFM and that we gave on segmentation, people throw that out the window and ignore that entirely. And they miss out on identifying who their MVPs are. Like, who are—
Yeah.
The most valuable people to you? Who are the most valuable customers to you? And you need to do everything you can to retain them. And that kind of goes back to the hot take that we were saying, like marketers mess everything up, right? Like don't take a great customer and screw them over because you just had a lack of effort or lack of care or oversight. Treat them well and make sure that you take into account Dude, I love that one.
You know how much I love CLTV. I think that that's like such an underrated topic that people don't talk about enough, especially in retention. Like, that should be a number that people— I always look at repeat rate of the customer, right? Customer repeat rate. And I look at CLTV. Like, those are the 2 things that I care most when I try to figure out how well the retention program's working, because it tells you everything. How good's the product? How good's the marketing? What's the improvement area, right? Like, if it's a good product, and I'm sure you've seen this, Chase, it's— you got a good product, but good you're not converting people. product, it doesn't matter how good or bad your email marketing is, you'll make sales because the product is really good. I see that. And then a little tweak will make it great. But if you have a really bad product and your retention's struggling, it's probably not the retention, it's probably the product. And it's just definitely something that I think about when I hear customer value as being a thought process behind that.
Heck yeah.
All right, last one, number 10. I'm gonna think about one last one. I think I'm gonna take that same take of that whole one-size-fits-all segment, right? I kind of mentioned it, but too many people in this market, and this is gonna be, you know, maybe if anyone's listening to this, this may offend people, but too many people people in this market are taking the 90-day select all in the entire account, 90-day engage window and blasting that out. That one-size segment is like money being thrown away left and right. That little bit of effort that you might've spent duplicating those emails to 3 different emails and changing some subject lines and some copy, that is a lot of money that you're leaving on the table. Any thoughts on that one?
That's a great one, man. That was a great one to send it home. And no, I completely, completely agree with you. Like, bro, this was a masterclass on segments. This was a good one.
I hope people are watching to this point and Yeah, I'm excited because, you know, for me, this stuff is like naturally in my head. And one of the things that I've learned, and you've known this, Chase, but we think things because we've learned them over the years and decades of working online. And you don't realize how hard this is for a lot of people to understand. And when you start talking about segmentation, dude, that's the word that next to deliverability, segmentation is the next word that people's eyes glaze over.
Yeah, they hear it and then they're like, oh, I don't know. And they kind of give up. So don't worry, Don't we're gonna break it down. give up.
Watch this video.
Don't give up. Learn it. Be a master at it. If this is how you tweak, imagining adding another 5% of retention revenue to your bottom line of your business. And if you're doing $1 million, that's meaningful. If you're doing $10 million, it starts adding up. Doing $100 million, that's a lot of money to add 5% to your business at $100 million.
Huge.
Yeah. Well, dude, I think that's a wrap. We're at the top of the hour. You know, we've gone longer than we expected, but dude, that's a wrap. If you enjoyed this podcast, guys, and you've enjoyed today, make sure you like, subscribe, and leave us a rating on your favorite podcast platform. You can follow the show on X, LinkedIn, YouTube, IG, TikTok. We're everywhere ultimately. But the first thing I do is I encourage you to join our newsletter. It's at ecomemailmarketer.com. We'll drop it in the show notes or all around here. It'll probably flash on the screen here, but make sure you sign up and join our newsletter. We've done 2 now. It's been a hit. People are telling us it's great. They're learning stuff. This is the things that we want to do. And you can also follow us on social. Chase, where can they follow you on social?
I'm on most all platforms. Just search for my name. Chase Diamond, no A in Diamond. Find me on pretty much every social.
Let me ask you, Chase, when did you pick up this whole like diamond, no A in diamond? Is this like a family saying?
Talking to doctors, banks, everyone, no one can understand or spell it. So I've probably been saying it for a few years now. Like I have to probably use it at least once or twice a week outside of this podcast.
So that's hilarious. Yeah, I think it's always funny when you say that, but I figured it was like a family saying at this point. Cool. And I'm found mostly everywhere on LinkedIn and X today. Those are the 2 places that you'll find me and I post and talk about Attention marketing quite often. So come find us if you're enjoying this pod and come follow us on social media. And we're excited about all right next week, Chase. Next episode, we just lit it up. We might we might as well keep getting nerdy here. So next episode I've got on the agenda here is we're gonna talk about the science of copywriting. We're gonna talk about how to drive more opens and conversions through the art of copy. And copy, I know, is special to you. It's always been special to me because it's I think it's the first art I learned when it came to marketing online. How about you, man? What do What do you think about copy?
Yeah, words, copy, the most important things that you could have. Obviously design is important, but what you say— and by the way, this isn't going to just help you with e-commerce emails, this is going to help you with writing social content, everything, with your personal emails, you know, with anything you do. The better that you can write, the better that you can speak, the more opportunities you're going to have. So tune in, we're going to break it all down.
Yeah, I'm excited, man. I'm gonna go search for some examples to break down a little bit because I like this whole screen sharing thing. I watched back that last pod and I was like, we do a good job explaining some good stuff visually too. So it's always good, man. And the YouTube shows it because people are following us. So thanks, Chase, dude. Thanks again. Great pod as always. We'll catch you on the next one. See you guys later.
From the open to the click, they're the masters of the flow. Just watch your list grow and your leads turn to go. Did we retain you so far or do we have to extend it? If you want results, you know you gotta send it. Yeah, you know you gotta send it. Yeah, you know you gotta send it. Yeah, you know you gotta send it.
