GUEST AUTHOR DATA SEGMENTATION

Blue sky . . .
Segmentation is the process of categorising contacts into different groups, so relevant marketing can then be targeted to each group.
Relevant marketing can then be solid segmentation they can Do you wake up every morning targeted to each group. understand and put to use thinking: How happy I am to In order to categorise have chosen the DM industry to simply and effectively. They customers into different need to start from the ground work in? segments we are going to apply up and implementation of Do you regularly get that scoring techniques. advanced modelling and social Eureka! moment and leap out networking is either blue sky of bed itching to get to the What data to use? office to try out something new? thinking . . . or just a little out of When profiling, all data should reach. It is these businesses I certainly do! be considered. The more data that I am going to address And I never cease to be you have, the better the profile those with the toe on the first amazed at the cleverness of will be. rung of the ladder. direct marketing folks and the However, analysing many This is do-it-at-home beautifully intricate ways that variables quickly calls for segmentation for those we can embed policies to deliver number-crunching software to without advanced modelling real communications to an do this. This is a pen and paper, tools. To provide a little eager public. or Excel exercise, therefore, in more focus, I will address At the moment, I am all of a the first model, we are going to businesses with customer and twitter about the opportunities keep it simple and score transactional data. that social networking could transactional information. offer my company. We wish to market a To maximise profitability Providing they are played financial product to those most Firstly, we need to establish the right, the possibilities of PR, likely to buy, but we do not want objectives. In this article, we will brand awareness as well as maximum sales; we want consider just one objective: We direct sales are huge. minimum costs against have a new financial title and For example, for retail; the maximum return. want to generate the power of a Twitter reporting a There is a simple gain maximum profit. huge discount at a favourite calculation of cost against Before we look at how to shop is endorsement marketing revenue that we can do, but produce a model that we could at its best. And for publishers; first we need to find our most use, it is worth reminding the value of Facebook leaders likely buyers. ourselves that segmentation is propounding the merits of a the process of categorising particular book. Best buyers contacts into different groups, But the question that Below is a simple model to apply whereby members of each concerns me for this article is a segmentation code to overall group are similar to each other, how much focus should we give best buyers: but dissimilar to other groups. this strand of marketing when considering our segmentation strategy? Group Segment Code The answer will be Group 1 Hottest contacts entirely dependant on your type of business Bought more than once in 0-12 months 1a and the profiling and Bought once in 0-12 months, at least once 12-24 months 1b segmentation strategies Bought once 0-12 months 1c already in place. Back in the real world, I often find Group 2 Active contacts myself ushering Bought more than once 12-24 months 2a newcomers into the Bought once in 12-24 months, at least once 12-36 months 2b direct marketing world Bought once 12-24 months 2c and creating their first Single Customer View from a diverse range of Group 3 Warm contacts spreadsheets, fulfilment Bought more than once 24-36 months 3a systems and web feeds. Bought once in 24-36 months 3b In these cases, the Bought once only 24-36 months 3b client needs some good,

or bare earth?
Simple significance scoring Let us not forget that we are selling a financial title and being in the hottest group is not enough to find the most likely buyers. We need to select all our finance buyers and use techniques to show us what is significant about other customer attributes and behaviour. Let us start by considering job title. controllers our best job category, who have not bought a financial title from us. Dismiss the variable if the selection count is less than one per cent. These are outliers and can skew results. Advertising manager has crept into our top selection but, with a count of only one, it is not reliable and should be excluded.
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IAN RUTHERFORD explains how to take the first steps into analysing your data without the use of software tools.

purchased and Industry type and combined the best scores into three groups of likelihood to respond. We should also go back to including categories from our earlier scoring exercise of hotwarm customers. Our best prospects will come from the overlap between hottest contacts and Significance Group 1.

question of moving to advanced tools that carry out much deeper analysis, scoring and clustering. So, how do we integrate simple or advanced segmentation with social networking? Well, that will have to be explored in another article. Happy segmenting!

Job title analysis Financial Product Buyers

Selection count: 1,710 Database count: 56,287

Most significant

Ian Rutherford is managing director, Wyvern.

Least significant

The grid above is self explanatory, but it may help to know that significance score is the selection percentage divided by the database percentage. All scores over 100 are significant and scores under 100 are insignificant.
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Those in red are much more prevalent in our selection than in the database as a whole. We could apply a significance code to these groups: Sig Group A. Over 150 ... ...Most significance Sig Group B. 120 149 ... ...Next best significance Sig Group C. 100 119 ... ...Lowest significance

Now, using the same target selection repeat the scoring with other variables and apply the same significance group code A-C. Then gather together the results from all three reports in a matrix and create groups to communicate to. In the example below, we have analysed job title, product

In conclusion There we have it starting from a bare earth position we have built up two simple, but effective systems to segment your data that dont need costly software, or a statistician to implement. Thereafter, it is a

G The report also identifies further customers who are of interest to us the report shows there are 943 financial

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