The right segmentation strategy will help you reach the right subscribers at the right time—maximizing your SMS marketing ROI.
Have you ever struggled to find the right movie? You may be in the mood for a comedy, but your streaming service is only recommending dramas and documentaries. As you scroll through the options, you feel frustrated that you can't find the content you're actually interested in.
As marketers, we often run into the same issue. We need to personalize our messages and content to meet our audience’s wants and needs. Segmentation helps us solve for this by building groups of subscribers with similar interests based on their actions, preferences, demographics, and more.
Tailoring text messages to your subscribers’ interests and needs are more likely to inspire action (and drive incremental revenue).
We already covered segmentation best practices and the different types of segments you should create. In this piece, we’re focusing on how to implement your segmentation strategy so your subscribers receive personalized messages that they want to engage with.
Testing and optimizing segments
The key to developing a proven segmentation strategy that works well for your business is continual testing.
When you’re first developing your SMS segments, running dozens of tests with subsets of your audience is a must. Checking (and double-checking) your results will help you weed out ineffective segments and optimize your top-performing ones. PS—if you’re wondering where to start, check out our best practices.
Once you’ve grown your subscriber list and tested dozens of segmented messages to see what works best, you’ll have enough information to develop an effective segmentation strategy for each of your campaigns.
Setting sophisticated key performance indicators (KPIs)
Just like your marketing campaigns on other channels, you need to measure the success of your SMS campaigns. Each campaign should have a goal (often associated with revenue) and KPIs. Your segmentation strategy should be aligned with your goal and KPIs.
Your segmentation strategy might differ depending on whether your primary focus is:
- Total revenue driven
- Revenue per recipient
- Return on investment
You might be thinking, “my main goal is always maximizing total revenue.” We get it—driving revenue is always a big focus. But we recommend taking a longer-term approach and have found the most successful SMS programs focus on maximizing revenue over the long run. Instead of the quicker wins, keep your eye on metrics such as revenue per recipient, time to repeat purchase, and other metrics that measure your customers’ lifetime value (LTV).
It costs less to turn existing customers into repeat buyers than it does to obtain new customers. Setting KPIs focused on increasing LTV is key to continuing to scale your channel over time.
Personalizing messages across several segments
Once you’ve identified your segments and KPIs, it’s time to start thinking about the context of your campaign.
For example, say a makeup and skincare company wants to send a campaign promoting their annual sitewide summer sale. They need to think about several factors:
- They’ve sent their entire SMS list two texts in the last 7 days promoting 10% off of their top-selling skincare products. They also sent triggered follow-up emails.
- Their recent SMS promotions have driven strong results (measured by total revenue generated), but their unsubscribe has hovered around 5%—a fairly high percentage for text messaging.
- They’ve noticed that promoting the wrong product category to the wrong subscriber increases their unsubscribe rates.
Instead of texting their full list about the annual sale, the beauty brand can create several relevant segments that still allows them to text their full list. Through these various segments, they can send tailored messages that will drive more revenue and keep opt-out rates low.
This strategy in action could look like:
1. Highly-engaged, product-agnostic purchasers, made up of customers who have made purchases more than 3-5 times across all of the brand’s product categories.
Send this segment a text promoting the sitewide sale calling out the breadth of the sale. Reward customers for their loyalty with an additional “VIP” discount.
2. Highly-engaged skincare and makeup purchasers, made up of customers who have purchased more than 3 times within certain product categories.
Text these subscribers about the sale, calling out specific products within their favorite categories. Help subscribers discover a new favorite by recommending a complementary product category.
3. Medium-to-low engaged purchasers, made up of customers who have made at least one purchase, but not recently.
Send these subscribers a “winback” offer, such as free shipping, to use during the sitewide sale.
4. Never made a purchase, made up of subscribers who have not yet purchased
Text these subscribers about the sitewide sale, calling out your most popular products. You can further segment this message based on how engaged subscribers are, offering incentives to re-engage lapsed subscribers. As a bonus, include a real customer review as social proof of your products
Treat each of your segments like its own list. Rather than sending out texts to your entire list every time, try engaging your “VIP” segment more frequently than subscribers who’ve never made a purchase. Building an engagement calendar for each of your segments ensures that you’re regularly interacting with each audience.
Now that you have an idea of how to effectively build, develop, and implement your segmentation strategy, put your learnings into practice. Start building your segments, or request a demo to learn more about partnering with Attentive to engage your mobile audience.