Segmentation

What is Segmentation?

Like profiling, segmentation is another good tool to use if you want to focus on a certain sector or sectors of your audience when getting your group's message across through direct mail campaigns.

While profiling is where your group can ask questions to find similar characteristics among those on its database or contact list, segmentation goes a step further.

Segmenting a list would see your group or organisation divide up the contents of your database into smaller chunks, and treat each as a separate audience in itself when it comes to your direct mailing.

For example:
  • Regular donors, once-a-year donors, lapsed donors.
  • Current members, last year's members who haven't renewed, lapsed members from more than three years ago.
  • Those who have volunteered at more than six group events in the past year, those who have volunteered for less than six group events in the past year.

These "bite-size chunks" would be made up of people on your database or contact list who share a certain characteristic or characteristics.

These characteristics may have been discovered while performing some profiling on your database, or could be something pre-defined you want to look into.


Why Segmentation and the Benefits of Segmentation

For community groups – the main aim of segmentation is to "divide and conquer".

Segmentation puts walls or barriers around certain sections of your group's database in order to organise it, divide it and make it easier to use.

By dividing your list into sections, you can better target those in each section with slightly different or even quite unique mail-out campaigns.

This should lead to:
  • More focussed direct mail-outs for each segment.
  • A saving of time and money because you can send out fewer, better targeted direct mail-out packages and can expect a better response in return.
  • Better relationships with those on your list, as your more targeted direct mail-outs will seem more personal and closer to home for recipients.
  • A better response to your mail-outs because, through segmentation, they are more relevant to each segment of people.



Types of Segmentation

Segmentation doesn't have to be fancy, nor does it have to divide your list in obscure sectors – in fact, it is probably better if it does not.

Your group can base the segmentation of its list around all sorts of categories, including:

  • Geographic - location of contacts' home or work address.
  • Demographic – Segmenting by age, gender, nationality or occupation.
  • Geo-demographic – Dividing your list by considering both geographic and demographic factors: for example – "Men aged between 18 and 24 who live in Sydney".
  • Psychographic – Division along lines of personal values, interests, hobbies and the like.
  • Interests/Identity – Segments dependent on what interests each particular contact on your list, or who they are. For example:
    • Members, sponsors, donors are identity segments.
    • Calls for donations, function attendance or working bees could be classed as interests segments.
  • Contact frequency/Date last contacted – How often you contact each person, or when you last contacted them. For example:
    • Monthly, six-monthly or annually are contact frequency segments (very useful for a not-for-profit working with donors).
    • Two weeks ago, two months ago, last year are "date last contacted" segments (again, handy for not-for-profits working with donors).

COLD/WARM/HOT LISTS

Segmentation can also see your list divided into hot lists (such as people who have given to your group before or recently, or who are current members), warm lists (those who have given in the past, or are lapsed members) or cold lists (people you have only very distant dealings with, or have not dealt with previously).

By doing this, you can slightly alter your direct mail-out depending on the segment you are targeting. For more information on these lists, the upcoming Hot Lists, Warm Lists, Cold Lists help sheet will be able to help.


DONOR SEGMENTATION

For not-for-profits, donors can be segmented according to size of donation, frequency of donation or date of last donation made. Again, your direct mail letter to each segment would differ slightly.


Segments Should…

  • Be big enough to allow for cost-effective and relevant direct marketing. It is no use having a segment made up of three people, for example.
  • Have key differences with other segments. If segments are too similar, segmentation will be a waste of time.
  • Be able to be evaluated. Mail-outs to each segment should be able to be assessed and rated separately
  • Be stable. It is no use having segments which switch and alter – or whose contents are always changing – as it is impossible to develop a mail-out campaign for them or assess the success of such a campaign.
  • Be able to be targeted. It is no use having a segment of your list which cannot be properly targeted through a direct mail-out, or have a mail-out adapted to suit it.
For more information on how to successfully segment your list, refer to the How do you Segment Your Database or Contact List help sheet, available at the Media & Marketing Centre on the Our Community website.



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