By Crystal Silvas

All online retailers should be leveraging the power of the consumer information available to them. Marketing by creating segments allows advertisers to focus their campaigns on certain subsets of potential customers that are “most likely” to purchase certain offers.

If done correctly, this helps insure the highest ROI. However, it does depend on what is being sold because there are differences in what to consider when defining market segments.

According to Jeff Rosenzweig, senior manager of CRM and e-mail marketing at Travelocity, “It is key to define your life cycle stages and objectives and then design your communication strategy accordingly. Inspire, convert, cross-sell, get feedback and inspire others with it.”

Travelocity employs behavioral segmenting for its customers using such attributes as shopping and booking behavior, subscriptions, geography, psychographic interests and hobbies. Demographics like socio-economic status, marital status and presence of children also come into play.

Rosenzweig says that segmentation allows for more relevant ads, and relevance can drive up to a twenty-fold increase in performance. “Be compelling and personalize,” he said.

EDining Advantage helps clients gather information about people who have eaten at their restaurants. When customers visit certain restaurants they are asked to fill out cards with information such as name, e-mail address and birthday. The cards are then sent to EDA in postage-paid mailers and are processed. Each customer is segmented by restaurant and is sent offers via e-mail.

According to Jason Smith, founder and CEO of eDining Advantage, “A forward-to-a-friend button can increases traffic to a site and to the restaurants themselves.”

Smith also said that seventy-eight percent of prospects look forward to receiving any type of e-mail from a business they frequent and ninety percent of AOL consumers expressed a strong desire to receive discounts and special offers from businesses.

Columbia Sportswear Co. started its e-mail program in 2003 and sent the same general e-mails to its entire database.

“Our company philosophy was everyone is interested in everything,” said Daria Colner, Internet marketing manager for Columbia Sportswear Company.

The company was seeing an open rate of about eighteen to twenty-seven percent and a click-through rate of about four to fifteen percent.

“We were not as successful as we could be,” Colner said.

That was when Columbia decided to develop a better approach to get click-through and open rates up through segmentation.

The company created seven categories based on identified customer profiles. As a result, the open rate is now fifty-two to sixty-nine percent and the click-through rate is nineteen to twenty-three percent. Jenny Craig also uses segmentation to discern which offers should be sent to what prospects.

“We focus on inactive clients most of all, as it is easier to win a client back then it is to attract new ones,” said Robyn Davidoff, director of integrated marketing for Jenny Craig.
The weight-loss company uses personalization and segment-based messages and offers, and phone numbers at the bottom of each e-mail are segmented in order to track which campaign a prospect is calling in regard to.

“Test subject lines. Create two or three subject lines and send out a small percentage with each subject line,” Davidoff said. “The one that works best should be sent out with the remainder of the names.”