6 Ways to Segment Customers (Other than RFM)

1) Email Activity- (Last Opened Email)

Understand how recently a customer has opened an opt-in email from you. For example, Mary Jane is a lapsed customer that you are not planning to mail until you see that she just opened an email last month and she is engaged again with the brand.

2) Promotional History Flags - (Mailed Last 30, 60, or 90 days)

It can be difficult to execute contact strategies because customers are migrating in and out of segments. As a brand, you may make a decision that you want to contact even your most lapsed customers once a quarter. If you add flags to your backend or promotional history, you can just select those names from an older segment that have not been mailed in the last 60 or 90 days.

3) Source of Acquisition- (This is something you hear from me a lot!)

Defining customers as web only does not tell us a whole lot, especially how responsive they are likely to be to the catalog. Understanding that a customer is a catalog-driven web customer or a pure web only drive from a program like non-branded paid search or affiliates is critical to optimizing contacts and costs. It also requires storing matchback data on your database.

4) Product Category- (Might seem obvious to some of you but it is still rarely used)

We most often see product categories included in the segmentation for apparel companies where differentiating shoe or accessories buyers is important, but it also has implications for general merchandise, children’s, gift, and home décor and furnishings.

5) Sale/Discount/Free Shipping Buyers- (These are large segments of customers for most retailers now)

Try testing different segments based on their type of purchase- full price, free shipping, discount, sale, etc. You may find that certain segments of buyers are more responsive to different contact frequencies/messages.

6) Presence of Opt in Email (Critical for optimizing catalog/email contacts)

Similar to the promotional history flags, adding a flag to your backend for presence of opt in email can also help you decide who to mail and who not to mail when you are cutting back circulation, especially to marginal segments. If customers will hear from you anyways, there is less risk in reducing catalog contacts (though it should be tested first!).