Improving targeting and segmentation approaches to boost conversion

A review of the popularity and effectiveness of different CRO approaches

Segmentation and targeting are so important to delivering relevant marketing messages which boost conversion, yet the research suggests that many digital marketers are leaving money on the table because they are not serious enough about segmentation and targeting. In this article, I'll describe research we commissioned to understand the effectiveness of different approaches for segmentation and targeting as part of CRO. I noticed that another recent study has shown a similar situation in the US where 76% of marketing execs say they don't target with Behavioural targeting data according to a Razorfish study.

After 25 years in data-driven marketing, I’m biased, but the facts speak for themselves. The graph below is from the RedEye Whitepaper 'The 7 best ways to improve website conversion and sales for larger e-commerce businesses'.

It shows that for website conversion segmentation is more highly rated compared with, say copy optimisation but much less frequently used.

Email marketing segmentation and targeting

MarketingSherpa research shows a similar pattern for email marketing. The graph below shows the target audience to be the most effective thing to test, yet it is tested much less frequently than, say, subject lines. Email marketers test the easy things rather than more  effective factors such as better targeting.  

Direct mail

The entry in Wikipedia for 'direct marketing' shows the same effect for direct mail:   Success of any Direct Marketing campaign, in terms of number of times the desired response may vary between the best vs. the worst of the following parameters, depends on:

• Targeting or list: best targeting yields up to 6 times the response, as compared with the worst targeting.
• Offer: best up to 3 times the response, as compared with the worst offer.
• Timing: best timing for the campaign up to 2 times the response.
• Ease of response (best/multiple ways offered to respond) yields up to 1.35 times the response, as compared with not-so-friendly response mechanism/s.
• Creative: best creative messaging yields up to 1.2 times the response, as compared to the least creative.

Conclusion

A key driver behind the rapid move we are seeing from email marketing to marketing automation is that marketing automation makes it easier to test and implement better segmentation and targeting.

Segmentation and targeting are the most important factors for any direct channel, direct mail, email or website. However much targeting testing and segmentation work you are doing, you can almost always make more money by doing more!

For more information you can download this summary report.

Thanks to Mark Patron for sharing his advice and opinions in this post. Mark has been involved with RedEye, the specialist in email, marketing automation and website optimisation, for the past 7 years. He helped the company grow by introducing e-rm and optimum.web to the company, before being appointed CEO in 2006. Previously Mark was MD of Claritas, now part of Acxiom, which he built over 14 years into the UK’s leading lifestyle data business, with 350 staff and over £30m revenues and was Chairman of Abacus Europe, the data division of DoubleClick. He was voted one of UK’s 15 most influential direct marketers by readers of Precision Marketing magazine. You can connect on LinkedIn.