Editor’s note: We provide advanced email marketing workshops for Klaviyo customers throughout the year to teach topics from list growth and management to automated email series to the state of the industry. The following video and transcript are an excerpt from Agata’s presentation on advanced segmentation from our New York City Workshop. Her presentation also covered documenting your email strategy, an easy operational framework for targeted marketing, and a great email segmentation customer case study.
For advanced email segmentation, we’ve got our focus on behavioral data. We’re looking at two different types of behavior for email targeting – interactions and purchases – and we’re going look at these dimensions of recency, frequency and monetary value. You combine those things together, and here are your building blocks.
There are four main categories that these different variables combine into:
- Core Marketing Audience
- Win-Backs – people who represent your best chance for winning back
- Use Caution – potential win-backs you just want to treat fairly cautiously, and
- Avoid – a segment that you should avoid entirely.
I’m going to break down each of these.
Core marketing audience
About 75% of your time is probably going to be spent here, working with people that fit these different categories.
The reason that I’ve broken them out into these different categories is because, very broadly speaking, people who fit into each of these buckets typically correlate to different business goals. And those business goals, typically, correlate with different types of marketing strategies.
For instance, your first group here: people who have bought recently, they buy frequently, and they’re buying at above an average order value. These are your High Rollers. You absolutely want everybody in this category. You definitely want to retain these people. You want to know who they are, and you also want to leverage them. You know that you have this segment of your audience here that is so invested in your brand.
One of the things that you can start thinking about is “hey, how do I get more referrals out of these people? How do I get more views out of these people? How do I get them sharing what I’m doing on social media?” Because they are your VIPs – your High Rollers.
On the left here, I’m talking about the kind of business goal that you have. And on the right here I’m talking a little bit about some of the different strategies that you might deploy to help you with that goal.
Even if you don’t have a formal rewards program, or a formal loyalty program, you might look at this segment and say, “well, I’m gonna start letting them know about new product launch ahead of time. I’m gonna give them exclusivity and give them some sneak peaks because I want to treat them as if they’re special.” They are special. They’ve told me that they’re spending a lot of money with me, they’re doing it often, and they’re coming back and doing it, and they’ve done it recently.
The next group here are your Brand Enthusiasts. They are also people who are taking action recently, or buying recently, buying frequently, but they’re not spending as much as your High Rollers. So your goal there for that group is to increase their average order value. You want to look at them and say, “hey, are there related products that I could potentially put in front of you? Are there volume based discounts that I can use just to encourage you to start spending a little bit more per order?
Potential high rollers & potential enthusiasts
This next level is talking about your Potential High Rollers and your Potential Enthusiasts. These are people who have taken those purchase actions recently, and they spent either a lot or not spent so much, but they haven’t done it frequently.
In the case of your Potential High Rollers, now you’re looking at trying to influence frequency. So you want to really push things like product replenishment, to really give people reasons to come back. And you can tease some perks.
Again, you don’t necessarily need a formal loyalty program or a formal rewards program. You can start teasing some things that say, “hey, buying this product three times gets you access to Y,” for instance. But all of your messaging and all of your focus for this population should be “hey, let me see what I can do to get them to come back more often,” versus your Potential Enthusiasts, where you’ve got a little bit of a decision. You can either get people to come back again, or you can get them to spend more per order.
This is something that’s worth testing. Typically speaking, depending on what your product is – for example, if it’s a high ticket product – then it might be easier to try to encourage people to come back and do it more frequently. If it’s a more low to mid-range ticket item, then you can start looking at some strategies to try and get people to just add a little bit more to any individual session.
Nearly theres and waiting for wows
Then your last group here for your core marketing audience. This group is based on interactions. You’ve got people who are Nearly There – people who are engaging with you recently, and they’re doing it frequently. This is the group that you want to nudge over the line to purchase. They’re almost there. They’ve given you all of the signals. They just haven’t actually taken that leap.
With this group – because they’re giving you all of those indicators that say, “hey, you know, I’m really interested in buying” – this is not necessarily a group that you want to go out there with your best discount (your 50% off). Chances are they’ve probably come across a discount like that before. It didn’t really get them over the line. So these are the folks you really want to focus more on looking at some of the value of your product. Or try teasing a fear of missing out (FOMO), giving them some some urgency around things only being available for a limited period of time, for instance.
As opposed to your last category that I’ve called the Waiting For Wows. These are the folks who have not yet begun engaging frequently, but they have done something recently. These are the folks that you might really want to push your best offer to, just to see if you can get over the line because they’re a little less engaged. They’re not quite as close to taking that action as the near Nearly Theres.
Next category is your Win-Backs. This is where I suggest, generally speaking, spending about 20% of your time. This is the group of people who are lapsed buyers. At one point they were buying frequently, and they either spent high average order value on any given session, or low average order value on any given session.
Lapsed high rollers
Your Lapsed High Rollers are the folks that you have the best chance of bringing back. If you’re going to start looking at doing win-back flows or win-back campaigns, you want to go all-in to get them back. Really focus on new and improved offers, things related to what they bought in the past, telling them what’s changed in your business, and giving them some special perks.
Then you’ve got your Lapsed Enthusiasts and at this point they’re probably a little less engaged with you if you’re using average order value as a signal for engagement. You can try a lot of the same strategies with these folks. With this group, your fundamental goal is to win them back, to get them buying again. But you want to start being a little cautious.
That’s a good lead into this next group that’s titled entirely the Use Caution group. These are people who have not given you as many indicators in the past that they were really committed to your brand and what you were selling.
One hit wonders, passing throughs, and false starts
They’re people who are lapsed buyers, but they never bought frequently in the first place, and they may have spent a lot of money when they purchased. But they very well might be One Hit Wonders. They might be people who are just “one and dones”. Every business has these people.
What I’m suggesting with these folks and the other two categories is when you start looking at strategies to win them back, you do it in batches. You’ve really got to focus on batch testing, because you want to protect your signal reputation, and protect your deliverability. You don’t want to go all-in with all of these folks at the same time, because it’s very likely that they’re not going to be super engaged with you.
This is a good point to remind everyone:
What I’m talking about here is a way of splitting up your database. It’s giving you those core building blocks. You’re not going to be sending every campaign to all of these segments as individual segments every time.
You would never walk out of the room here and say, “hey, yeah, I want to take people who we lost or didn’t buy frequently, but who spent a lot at one point in time, and just give them a very general win-back email – just go all out and see if they’re gonna respond to it.” You have to marry that with a “hmm, what else do I know about these people? What did they actually buy in the past? Do I have any other products or categories that I can link up to that? What do I know about them?” We’re gonna talk about that a little bit in the next section – how you stitch all of this together.
Our last category are people who never bought at all, and at one point they were interacting with the brand frequently. They were responding to our marketing messages, but that hasn’t happened recently.
This is your test group. I’m suggesting that you test in batches of decreasing size. So 50% for your One Hit Wonders, 25% for your Just Passing Throughs, and 10% for your False Starts.
Set a minimum, minimum, minimum, minimum email criteria for this group in order to expand on any of these tests:
- make sure that your spam complaint rate is under 0.08%,
- make sure your unsubscribe rate is under 3%, and
- your open rate is over 10%.
If you guys haven’t pieced this together, be aware that working with this population is actually more time intensive. It’s going to require a little bit more planning, a little bit more on execution, and it’s most likely for less return.
Where to start
When you’re first starting out and really thinking about how you’re going to adopt segmentation, and how you’re going to approach your marketing planning – you’re gonna be spending most of your time with the Core Audience population.
As you start getting into a regular groove, you’re gonna start really thinking about how you can expand on what you’re doing on the Win-Back side of things. Once you start looking for that next incremental lift to try to figure out “what am I doing now? I really nailed what I’m doing with my core marketing audience. I’m in a regular cadence there. I’ve got a couple of win-backs figured out for the folks that are most likely to come back now, and might expand that a little bit, and see if I can start going after this population too.”
So it’s something that builds over time. Potential Win-backs is not the place that you want to necessarily start today. Unless you’re already doing everything else that I’m talking about with your Core Marketing Audience and with your most-likely-to-be-won-back population.
Avoid this segment
Last thing is the red zone – the category to avoid. These are people who signed up for your list once upon a time. They never engaged with you frequently, and they have not done it recently. Stuff like sweepstakes and conversion wheel and using those kind of mechanisms to acquire names can see you start building up this population pretty fast over time.
These are the folks that you want to make sure you are avoiding. They can never actually take that action. You haven’t gotten them to engage. They are the people who are going to damage your reputation with ISPs over time.
Building supercharged segmentation
This is your landscape that you’re working with. These are the building blocks. Hopefully they make a little bit more sense than they did when I first started this. Supercharged segmentation is about taking those building blocks and then executing against them with a deliberate plan – segmentation is about execution. You still need that goal and you need that strategy.
To see Agata’s entire presentation and related resources visit the Klaviyo Help Center’s 9 Rules of Effective Segmentation page.Back to Blog Home