How to Segment your Database or Contact List

The help sheet Relating to Contacts – Segmentation looked at what segmentation was, as well as examining its benefits to a community group or organisation's direct mail-out campaigns.

Segmentation is a tool that helps your group or organisation divide up the contents of your database into smaller chunks (Who is financial? Who gave to last appeal? Who gave more than $50?), and then treat each as a separate audience in itself when it comes to your direct mailing.

These chunks are made up of people on your database or contact list who share a certain characteristic or characteristics.

The main aim of segmentation is to "divide and conquer" – by dividing up your database into segments, you can more easily target and "conquer" them through more focussed, more relevant direct mail-outs that appeal more personally to them.

Not only does this save your community group time, but it can also save money and increase the response rates to your mail-outs. Anything that can help to increase the response rate can help to save you money.

To bring segmentation into focus for community groups and organisations, this Help Sheet contains some useful examples of effective segmentation, and also some further tips on how best to segment your database or contact list.


Some Examples of Effective Segmentation

EXAMPLE 1:

A not-for-profit group wishes to focus its direct mail-out campaign on attracting donations. It could look at segmenting its list in a number of ways:
  • Frequency of donation – Frequent compared to infrequent.
    • Your group could then concentrate on the infrequent givers for the direct mail-out and try and re-energise and re-activate them with a targeted campaign.
  • Size of donation – Large compared to small (or over a certain amount compared to under a certain amount).
    • Your group's campaign could be different for each segment with a different angle (Give $50 and help two children learn to read) as against (Give $1000 and help keep 40 children at school). It allows you to try different approaches depending on their giving history.
  • When last donated - Recent compared to not-so-recent.
    • Your mail out could target lapsed or forgotten donors rather than focussing on the ones who have just given – who could feel a bit put out if targeted by a direct mail-out so soon after donating.

EXAMPLE 2:


Your sporting club could be on a mission to boost its membership numbers. In doing so, it could segment its database into the three basic categories of "hot list","warm list" and "cold list".
  • The hot list would be current members, who your club would ask to renew their membership next year.
  • The warm list could be those who have bought memberships in the past three years, or who are supporters and constant attendees at matches and are known to your club but who don't have memberships.
  • The cold list could be those who have never bought a membership, despite being known to loosely support your club and/or occasionally attend matches;
The wording and emphasis of your mail-outs would then alter slightly depending on the segment you were targeting - or across each of the different segments you were targeting.


Things to Remember When Segmenting

Four key things to remember when defining segments are:
  • Make them the right size. Too large and they are not manageable or your group will be unable to focus its messages. Too small and they will not be worth the time and effort of focussing a direct mail-out on.
    • Smaller segments can be useful if your campaign is very highly targeted, or response rates from this segment are quite high.
  • Make them specific. Generally speaking, the more specific the segment, the better results it will produce.
  • Have enough of them to suit your requirements. Don't have too many, or too few.
  • Make them unique, identifiable and different from each other.

Ensure there is a discernable link between the segments your group defines and the focus or subject of your mail-out. In other words, think about the ultimate purpose of your upcoming direct mail-out, and make sure that your segmentation work is relevant to it.

It is no use sorting your donors into segments depending on when they last gave if your mail-out is going to concentrate on those who have given larger amounts to your group. If you do this, your segmentation is irrelevant to your mail-out focus.


Which segment do you put them in?

What do you do when someone in your database doesn't fit easily into a particular segment, or may in fact fit into more than one?

The answer is up to your group - use your discretion and see which of the segments this person's characteristics best match. If they seem to firt more into one segment than another, put them there.


Using This Information

Effective segmentation is an important step towards more effective direct mail-outs.

Once you have segmented your list, you have built a platform to launch a more effective mail-out campaign:
  • You can focus your direct mail outs to one segment, or to each segment, targeting them specifically through tailored messages to get a higher or better level of response.
  • You can also use some testing of mail-out contents, styles and approaches to see which gains the best response in each segment.

For more information on targeting your direct mail-out, as well as testing, refer to the help sheets:
All of which are available at the Media & Marketing Centre on the Our Community website.