1. Tap into eRFM

eRFM customer modeling is a good way to determine whether your customers are genuinely engaged. This tool empowers you to categorize customers based on their past behaviors and actions. eRFM looks at data from four metrics: engagement, recency, frequency, and monetary value.

With eRFM modeling you can develop comprehensive customer segments. Each RFM persona receives an engagement score, so you can identify customers who are primed for conversion, and those who need to be re-engaged. With detailed segments, you can use eRFM to adapt your email marketing strategy to send the right message to your audience at the best time.

2. Predictive AI (Artificial intelligence)

By utilizing predictive analytics powered by Dotdigital’s WinstonAI, you can turn insights into action. Using AI, you can segment your customers based on predicted actions such as a customer’s anticipated next purchase date. This enables you to create timely and relevant marketing campaigns that reach your audience at the perfect moment. Not only does this help you keep your customers, but it also ensures that your messages remain relevant and the conversation continues.

You can use predictive analytics to forecast what products your customers may be interested in next. WinstonAI will analyze browsing history, past purchases, and spending patterns to understand your customer’s unique tastes and interests. This allows you to offer tailored product recommendations before they even know what they want themselves.

3. Behavioral segmentation

Unlocking the full potential of email marketing begins with understanding your subscribers through behavioral segmentation. Start by closely monitoring their email interactions; keep a keen eye on email metrics like opens, clicks on links or attachments, and conversions. This data lays the foundation to help you create highly effective messaging and content.

For ecommerce business owners, understanding your customers’ buying patterns is important. Take a closer look at your customers’ purchase histories, average order value (AOV), and category preferences. This information can assist you in not only refining your segmentation strategy, but also creating personalized campaigns that cater to each customer’s interests and needs.

4. Lookalike segmentation

If you’re looking to reach potential customers who share similarities with your ideal buyers, why not try Dotdigital’s lookalike segmentation tool. To start, you’ll need to use the single customer view (SCV) feature.

Dotdigital’s SCV gives you a holistic view of every one of your customers. You can see all your customer’s interactions, preferences, and behaviors from different touchpoints like email, SMS, and website activity. This helps you better understand your target audience and you can recognize their behavior patterns and trends. With this knowledge, you can optimize and tailor your email marketing campaigns.

Once you have insights from your SCV, you can then identify ideal customer profiles to represent your best buyers and create lookalike segments based on that information. With just one click, you can use these segments to effectively target the right prospects with the right message.

5. Self-segmentation

You can get customers to self-segment using preference centers. Encouraging your customers to select their preferences at an early stage in their journey allows you to use zero-party data to create customer segments.

In the preference center, your subscribers can set and modify their content, frequency, and communication channel preferences. Then you can create segments using selected preferences to easily send messages to your contacts based on their expressed interests in your brand and products.

Alternatively, you may want to send out a survey or questionnaire to learn more about your audience and hyper-personalize your messages. Let’s say your customer service survey asks someone their job title and you find that your audience base has many teachers. Try sending out messages that align with their interests and career seasonality to strategically deliver the right message at the right time to the right people.

6. Preferred channel segmentation

When it comes to cross-channel marketing, recognizing your customer’s preferred channels is your secret weapon for maximizing audience engagement. It helps you discover the communication methods your audience prefers most. 

Start by segmenting your audience based on their preferred channel. By doing so, you will not only increase the efficiency of your segmentation strategy but also ensure a seamless cross-channel customer experience for your customers.

It’s also a good idea to maintain an up-to-date contact list of your customers’ preferred channels. This way, you can easily pinpoint where they’re most active and tailor your cross-channel marketing approach to resonate with their preferences.

By reaching out to your contacts through the channels they’re most likely to engage with, you’ll be well on your way to forging meaningful connections and nurturing long-lasting relationships with your customer base. 

7. Event-triggered segmentation

Segment customers based on key milestones in the journey with your brand. You can do this by sending them a special discount on their birthday or celebrating their brand anniversary. 

Sending personalized messages to your customers is an excellent way to demonstrate appreciation and foster brand loyalty. For instance, if you have customers who were born in a specific month and haven’t engaged with your brand in a while, you can segment this group and provide them with a customized birthday discount. This not only encourages them to come back but also demonstrates your consideration for their special occasion.

Email segmentation summary

By using these seven innovative segmentation techniques, you can deliver personalized and relevant content to engage your customers. When you make your messages more in tune with individual preferences and interests, you’re much more likely to boost engagement, form deeper connections, and ultimately make your customers happier.

Sending irrelevant emails can readers into unengaged contacts. Sending them repeatedly, all but guarantees their unsubscribe.

To keep subscribers engaged you need to consider email segmentation as a core element of your email marketing strategy. Segmenting your audience base allows you to send personalized emails that reflect the customers’ needs and wants. The more you’re able to do this, the easier it’ll be to convert and retain customers.

Below are some key segments you should be building to optimize your email marketing performance.

Why email segmentation is important?

Every time you send a targeted email to your segments, you’re one step closer to sending personalized content. The more you refine your audience segments, the more relevant and personalized your marketing will feel when it lands in a subscriber’s inbox.

There is a number of ways you can use email segmentation in your emails to personalize them.  In the following sections, we’ll explore tactics for different industries to master the art of email segmentation.

General email segmentation

Every email marketer, from beginner to well-seasoned professionals, should have a collection of general segments built and ready to use when the campaign demands it.

These usually use the explicit data customers hand over in exchange for a more personalized experience. Demographic data such as gender, age, and location are all examples of explicit data and should form the basis of your email segmentation strategy.

Marketing preferences collected through your preference center should also be a priority for serious email marketers. You should be collecting preferences such as favorite products, interests, and newsletters they’d like to receive. This will give you unprecedented insight into your customers and empower them to personalize their own experiences.

B2B segmentation

As well as segmenting based on demographic data B2B marketers can use lead scoring to segment and target specific audience groups.

Segments based on whether a prospect is “cold”, “warm”, “hot”, or “red hot” enables you to send targeted messages designed to tip them into the next category. For example, you can target your “red hot” segment with invitations to book calls with your sales team. Or, you can target your “warm” contacts with educational download content to drive them into the “hot” prospect category.

Ecommerce segmentation

Ecommerce brands have a wealth of customer data at their fingertips. From past purchases to total money spent, every insight adds value to your relationship with customers.

You can take these insights further by segmenting based on customers’ RFM scores. RFM – recency, frequency, and monetary – models help ecommerce brands group customers based on their shopping habits.

Dotdigital’s RFM modeling tool groups shoppers into eight personas which you can use to create audience segments. These personas are:

• Lost
• At-risk
• Can’t lose
• Need nurturing
• High potential
• Recent customers
• Loyalists
• Champions

Segmenting your audience based on these personas helps you identify what each group needs. For example, during the sales period, you can offer “Loyalist” and “Champion” segments exclusive pre-sale access. Or you can target your “Need nurturing” segment with engaging newsletter content that helps them develop stronger connections with your brand.

Internal communication segmentation

A lot of internal communication and HR teams tend to rely on their internal email providers to connect with staff, but the benefit of using an automation platform is unprecedented.

One of the biggest perks is the ability to segment your workforce. Whether you’re sending important updates to managers, onboarding new staff, or targeting specific office locations, segmentation will enable you to get messages out quickly and efficiently.

Direct-to-consumer (D2C) segmentation

A lot of emerging D2C brands offer products and services to consumers on a subscription basis. These membership-based businesses need to connect with customers to keep the contract rolling.

Targeting audience segments based on how long they’ve been subscribed to your services, and the type or level of subscription they have is a great place to start. You can ensure your loyal customers are rewarded and kept up-to-date with your latest releases. You can also nurture subscribers paying for basic packages by regularly delivering outlining the benefits of upgrading.

Non-profit segmentation

The audience base of a non-profit organization is as diverse as they come, which means segmentation is a vital tactic. Charities, non-profits, and membership organizations regularly have to deliver important communications to stakeholders, but each stakeholder may require a different level of business insight.

Building segments for your volunteers, fundraisers, board members, ambassadors, and more will make getting emails out easier and more efficient.

Summary

By incorporating personalized strategies your email marketing, you can establish a deeper connection with subscribers and deliver content that genuinely resonates with them. This approach allows you to customize your email content to align with individual needs and preferences. This will enhance the likelihood of your subscribers opening and engaging with the message, ultimately driving desired actions.

Email segments divide audiences into groups depending on age, gender, location, interests, and more. If you don’t segment your marketing list, you’ll be sending generic content to your whole database. When customers decide they’re not receiving valuable content they become unengaged.

That’s why segmentation is such an important tactic for all email marketing professionals.

Why is email segmentation important?

We’ve already mentioned how segmentation can improve your email engagement levels, but let’s dive a bit deeper. Why should you use segmentation and what are the benefits?

Not all subscribers are the same

Each of your subscribers will have very different expectations for your brand. One-size-fits-all approaches don’t work. In the same way, you target different personas, different audience groups have specific goals when they subscribe to your marketing.

Email segmentation helps you identify common characteristics among them. As you learn more about your customers, your segments can get more granular. The deeper you go, the more likely you are to convert readers. You’re personalizing emails based on their shared interests and helping them achieve their goals.

Different stages of the sales cycle

Readers will be at different stages of the sales cycle when your email lands in their inbox. To maximize your impact and their experience, it’s important you target customers with the content they need, every step of the way.

You can use segmentation to group your audience according to their stage in the journey. If they have just joined your marketing list, you should be sending them welcome emails and content to introduce your brand. When they’ve made a purchase recently, they’ll need follow-up content to keep them engaged.

Failing to connect with customers at the key stages of your sales cycle, risks losing them altogether. Segmentation makes the likelihood of missing these opportunities significantly smaller.

Better results

Because of the benefits outlined above, you’ll see better results when you send segmented email marketing. You’ll be targeting the right customer, with the right message, at the right stage of the journey. This will lead to more conversions, sales, and ultimately revenue for your brand. If you’re looking to improve your email marketing metrics, segmentation is a must.

Improved deliverability

The more relevant the content your send, the more opens you will get. The more your open rates improve the better your email reputation will be. Everything’s connected.

When you send targeted emails to a segmented database, you’re engaging with your customers more. This will encourage your customers to interact with you on a deeper level.

As customers begin to expect relevant and engaging emails, they’ll open and interact with your emails more often. The more readers engage with your email marketing email providers will recognize you as a reputable and trustworthy brand. Accidentally landing in the spam folder will be a thing of the past.

Enhanced customer experience

When you leverage email segmentation you can improve your customer experience. By delivering tailored, relevant emails to your subscribers, you address their unique needs and interests, making them feel valued and seen. This personalized approach fosters a stronger connection between your brand and your customers, ultimately leading to improved satisfaction and customer loyalty.

How to segment your email list

There are five key ways brands should be segmenting email marketing lists.

1. Demographics

Demographic segments use customer information such as age, gender, marital status, and job title. You should collect this data when new subscribers sign up to receive your email marketing. The more information you gather during the early stage of your relationship, the more advanced you can make your segments.

2. Geographical

Targeting customers based on their location has a massive influence on purchase decisions. Especially if you’re driving shoppers to brick-and-mortar stores or providing delivery updates, customer location is essential data to have. Modern shoppers love convenience. By targeting geographical segments you can drive customers into making spontaneous decisions.

3. Marketing preferences

You should always be collecting marketing preferences, especially during the welcome series in preference centers and re-engagement programs. This is data such as the departments, newsletters, or topics they’re interested in and the frequency with which they would like to hear from you. Driving customers to update their preferences will help you ensure engagement levels are high for each segment.

4. Email engagement

Email engagement metrics such as open rate and click-through rate are automatically tracked. That means it’s easy and straightforward to segment users based on how they interact with your email marketing. Whether it’s non-openers or readers who’ve clicked specific links, targeting these segments will have a huge impact on your results.

5. Behavioral

Behavioral segmentation is the most advanced email segmentation tactic. It’s based on customer behavior on your other channels such as your website. Specific page hits, frequency of visits, and recent activity are just a couple of the segments possible that help gives your email marketing a hyper-personalized feel.  You can also use data like purchase history and average order value to create behavioral audience segments.

eRFM segmentation

eRFM is a model that helps businesses profile customers’ shopping habits. Depending on the RFM score a customer gets, you can identify segments from ‘champions’ and ‘recent customers’ to ‘high potential’ and ‘at risk’.

Three factors are considered when categorizing audiences:

1. Recency: how recently did the customer purchase?
2. Frequency: how often do the purchase?
3. Monetary value: how much do they spend?

Dotdigital’s eRFM modeling tool provides eight separate personas you can use to segment and target customers with relevant content.

SMS segmentation

SMS marketing is being adopted by brands around the world. Compared to email marketing’s average open rate of around 89.42% (due to Apple MPP making open rates unreliable), SMS has a read rate of 98% within the first five minutes. It’s a quick and effective way to reach audiences with important information.

But it’s also becoming the new channel for batch-and-blast customers.

Like email marketing, you should segment SMS audiences. This will ensure engagement and start two-way conversations.

Because of the immediacy of SMS, you should base your audience segments on data such as location and recent activity. Segmentation will help you to connect with engaged audiences and deliver relevant promotions and offers that will land with an impact.

Summary

Email segmentation is a powerful tool to improve your marketing strategy. By understanding the different ways to segment your audience and the benefits it brings, you can create tailored and relevant messaging that resonates with your subscribers. This personalized approach not only drives engagement but also fosters customer loyalty, leading to increased conversions, sales, and overall success of your marketing campaigns.

We entered 2023 still in the shadow of the pandemic; inflation continued to rise, the war in Ukraine continued, and there have been plenty more headlines since then. People everywhere can’t help but ask – is the worst behind us, or is there more bad news to come?

This is the trend that is likely to influence spending for some time. Consumers will have a constant battle on their hands between seeking stability and wanting to move on. 

Right now, consumer spend isn’t slowing down. Most people are spending to make up for lost time due to Coronavirus. This is called revenge spend.

• In 2022, online revenue increased by 23%
• Shopify announced a record-breaking BFCM weekend
• Forrester predicts that spending will increase a further 5%

But when you combine this type of spending with economic concern, the result is a demanding customer base with high expectations. Consumers are looking for quality over quantity and are more selective about which brands they engage with. Consumers may be eager to spend their money, but they’re not looking to throw it at anything and everything – it’s targeted spend. 

This should be a wake up call for marketers everywhere. Due to economic difficulty, marketers are under pressure to improve ROI, take stock of existing set up, and even re-arrange teams, but now is not the time to slow down marketing efforts. Consumers are looking for places to spend their money, and someone needs to tell them where.

Keep reading for practical tips on how to keep up with high consumer expectations and come out on top in 2023.

Effective tactics to overcome purchasing objections

The key to overcoming purchasing objections is to build trust with your customers and leverage it across the whole purchasing journey.

There are many ways to build trust, including press releases, features in industry magazines, utilizing a founder’s or company story, and aligning your company mission with the beliefs of your customers. 

Building trust among consumers is incredibly important, and one of the most effective trust signals is reviews. Customer reviews should be incorporated throughout the buying journey to better overcome objections at the different stages of the purchase. For example, you should feature reviews on your website’s homepage, product pages, and even at the checkout. Also, reviews should be used in wider marketing, such as social media and email campaigns.

Another important trust signal to customers is done through responsible marketing, data processing, privacy, and security. Consumers want to trust that a brand will use their data responsibly and with the right level of security to feel comfortable making a purchase. 

Growth strategies that will work in a difficult economic climate

There is no silver bullet when it comes to growth. The most important thing is to do the basics really well, stay consistent and trust that customers will come. 

One effective growth strategy that is often overlooked is focusing less on acquisition and more on loyal customers. Take the time to find out who your best shoppers are, their behaviors, and what they respond to. Analyze why these customers purchase multiple times and use this research to drive more shoppers to do the same. Your top 20% of customers are responsible for 80% of your total revenue. This is the group that brands need to focus on to grow. 

According to Matt Johnson, the key to winning over customers is by being the closest to them. The way you interact with your customers after they make a purchase is important for building loyalty and growing your business. Treat your repeat customers differently, show them you understand them, and make them feel special. Use data and segmentation to deliver this level of personalization at scale. Collect zero-party and first-party data to understand your customer better and bring that into your marketing tech stack to run more effective marketing campaigns.

Three tips for effective data acquisition and usage in 2023

1. Better personalization and segmentation

The best way to spot shopping behaviors and trends that you want to target is by looking at your customer data from all sources in one single view. Combine this holistic approach to data with a powerful segmentation tool to easily create lookalike segments to send personalized, specific marketing.

2. Customer insights beyond the norm

Use custom data fields to collect customer attributes that you can use to further personalize the entire shopping experience. For example, if a skincare brand knows a customer’s skin type or age, they can tailor everything from the onsite experience to paid social posts so the end user will always see relevant content.

3. Build authenticity

Collect higher quality reviews that include images and videos. You can also showcase user-generated content (UGC) on your website to be more genuine. This will help you to stand out and look more authentic. It will also help deliver the right content back to the customer through the right channels and at the right time.

How can businesses create meaningful hybrid customer experiences?

The first way to bridge any gap between physical and online shopping is effective data collection and utilization. Collect your customers’ data at every point and leverage this during in person as well as online experiences. So when a customer visits your pop-up or brick-and-mortar store, they will be recognized as a previous customer and reap the benefits. 

Another key way to create meaningful offline customer experiences is through the unboxing experience. Leverage your ecommerce data to deliver personalized notes and offers to customers as a part of the delivery experience. 

Events are also a great place to build relationships with customers offline. Businesses should consider how in person experiences like events can be used as part of their strategy to strengthen their connection with customers and also as a way to reward them for their customer loyalty.

Are you up for the challenge?

Consumers everywhere are still spending money on brands they love and that offer engaging and personalized experiences. Are you ready to meet their higher expectations? To satisfy shoppers, use data to build authenticity, trust, and offer personalized shopping experiences that make them feel special.

REVIEWS.io was founded in 2010 to focus on authentic and genuine reviews to help customers make a real difference to their business. The solution has been built to put clients at the heart of everything REVIEWS.io do and support their customers’ businesses to monitor and grow their reputation online through the power of review collection, management, and publication.

REVIEWS.io is a global Dotdigital partner. Dotdigital and REVIEWS.io together help you seamlessly target your audiences and send personalized campaigns based on their review history. Strengthen your email campaigns, click-through rates, and increase your revenue using our joint technologies. Or why not learn more about our partnership with REVIEWS.io.

Consistently sending the same message will eventually damage your brand reputation, increase unsubscribes, and ultimately hold up conversions. Sales will dip and profits will suffer. All because you failed to engage customers enough.

Targeted emails don’t have to be complicated or hyper-personalized works of art. Successful email marketing strategies are all about understanding and catering to your audience’s individual needs and preferences. Read on to learn four key benefits of targeted email marketing. These benefits will revolutionize your campaigns and boost your business growth.

What is targeted email marketing?

We all know that email marketing is the most successful channel available to marketers today. Email marketing offers $42 ROI for every $1 spent. But that’s just the beginning of what’s possible.

You can significantly improve your ROI, sales, and profits by adopting targeted email marketing.

Targeted email marketing is a way of ensuring your emails make an impact in the inbox. Using the information you already hold about your customers, you can send tailored messages to specific sets of subscribers. You target them.

To improve your email marketing strategy, it’s important to segment and personalize based on customer information like their interests, age, and gender. This level of personalization impresses readers and improves their experience with your brand. This increases the likelihood that they’ll act on your calls to action and remain loyal customers.

4 benefits of targeted email marketing

Let’s look at these four benefits of targeted email marketing…

Improve relevancy

Segmentation ensures you’re sending a more relevant message to your audience. You can divide your customer base into distinct groups based on shared characteristics, such as demographics, preferences, past purchase behavior, or engagement history. 

By categorizing customers into these segments, you can tailor your email campaigns to address the unique needs, desires, and expectations of each specific group. Customers who receive relevant content are more likely to engage with your email marketing efforts. Customers will click and convert because targeted emails appeal to their goals and offer value to them.

It’s most effective to gather information and segment new subscribers through their welcome program. You should regularly prompt customers during their customer journey to update their marketing preferences.

Segmentation is an essential and under-utilized email marketing tactic and helps build stronger connections with your audience. But, the more you segment and target your audience, the better your results will be.

Increase ROI

Sending targeted and personalized emails leads to higher engagement rates and increased sales conversions. With more customers converting, your revenue will naturally rise. By understanding your customers’ preferences and needs, you can provide them with targeted discounts and promotions that cater to their interests. This approach allows you to deliver the appropriate message at the right moment, resulting in higher customer engagement. When you deliver relevant messages, engaged readers convert faster. And more conversions mean more revenue.

If you know customers are interested in a specific product range, target them with offers that appeal to them. Even basic segmentation such as age and gender significantly affects your ROI. Marketers can enjoy ROI increases of up to 760% when sending targeted, segmented campaigns.

Better customer relationships

We’ve already mentioned that improved relevancy in your emails will demonstrate your brand’s value to the customer. In the long run, it will also help you build and nurture long-term relationships with your customers. 

When you know your customers and segment and personalize your emails accordingly, customers will hold your marketing in high regard. By regularly sending relevant content, customers will develop high expectations from your emails. The more you meet – and exceed – these expectations, the more their trust and respect for your brand will increase.

Longer customer retention

Targeted email marketing not only makes building relationships with subscribers easier; it also makes retaining them easier. 

Creating personalized and targeted email marketing campaigns can greatly enhance customer retention. It’s important to build strong relationships with both potential and existing customers by continuously learning about their preferences and optimizing your email campaigns. 

By doing so, you increase engagement and ensure your customers receive value from your emails. This fosters loyalty and customer satisfaction, ultimately leading to repeat purchases and positive word-of-mouth recommendations.

Shoppers who value your experiences will seek you out, in and out of the inbox. If you replicate these experiences in your cross-channel marketing they’ll think about you first, every time.

Optimize for ultimate success

It’s important to optimize your marketing strategy as customers’ needs and goals change with every conversion. Encourage customers to update their marketing preferences and keep track of email marketing metrics such as opens, click-through rates, and ROI to determine which tactics are most effective. Adjust your campaigns accordingly to align with your customer’s interests and behaviors.

Summary

By using targeted email marketing strategies you can connect with your audience, increase ROI, build stronger customer relationships, and improve retention rates. It’s a powerful tool that can significantly impact your digital marketing efforts. To stay ahead of the competition, it’s highly recommended to invest in targeted email marketing strategies to take your marketing campaigns to the next level.

As a result, it would be safe to assume that marketing budgets are reflecting this opportunity. Unfortunately, not. Marketing budgets have shrunk as businesses tighten their purse strings. The average share of a company’s revenue that’s spent on marketing declined to just over 6% in 2021. 

What is customer retention?

Customer retention is an important part of any successful business strategy. It involves building and maintaining positive relationships with your existing customers to keep them coming back. 

What is customer acquisition?

Customer acquisition is the process of acquiring new customers for your company. The goal of customer acquisition is to convert your customers into paying customers who will generate revenue for your company.

Customer acquisition or customer retention?

The rise of marketing opportunities online may make it feel like acquiring new customers and growing your marketing database is the answer to business growth. If there are more customers online looking to discover new brands, then you have a better chance of converting them, right? Not necessarily.  

While the acquisition is still a big priority for a lot of brands, competition is rife. You’re not the only brand to see the revenue opportunities offered by the new increased activity online. Brands like Google, Facebook, and TikTok want to keep users on their channels and clicking on revenue-generating paid ads rather than surfacing new brands organically.  

That means big brands with bigger budgets are the ones succeeding in converting customers. 

It’s also important to note that customer acquisition can be more costly and time-consuming than customer retention – so it’s good to focus on both strategies simultaneously.

The benefits of customer retention

Investing in customer retention is a smart move for any company looking to achieve long-term growth and success. Improving your customer retention has many benefits: 

Reduces rising customer acquisition costs

Research carried out by Profitwell found that customer acquisition costs (CAC) had increased by 60% in the half-decade from 2014 to 2019.  

During the recent pandemic, when online demand for goods first surged, ecommerce giants like Amazon and supermarkets ramped up their tactics, investing massively in paid search and delivery fulfillment. With 74% of online searches starting on Amazon nowadays, it’s been made nearly impossible for brands to compete with these industry leaders for new customer acquisitions.  

Lowers churn rate

When customers leave because they’re unhappy with their experience, it costs businesses money each time they lose one — not only because they have less revenue coming in but also because they have to spend money on marketing campaigns aimed at acquiring new leads (which usually don’t work as well as retaining existing ones).

How to improve customer retention

To retain customers, marketers need to shift their focus from acquisition to retention. The most effective way to do this is by using customer data. Customer data can be used for personalization, improving customer experience, and making data-driven decisions.

Harness your customer data to segment

Your data literally holds all the answers. Want to set your marketing team’s KPIs clearly? Check out your data. Want to know what products or services to develop? Your data will tell you. Want to know which customers are of the highest value? The answer is in your data.  

You can calculate your customer lifetime value (CLV) to help you increase sales and profit as well as boost customer loyalty. It can help identify segments that will generate the most revenue over time, enabling you to justify spending on your marketing campaigns. 

Thankfully, improved data capture, understanding of the importance of first-party data, and better access to predictive analytics tools mean that CLV can be forecast with greater accuracy.  

A great example of this is Dotdigital’s RFM customer modeling tool. By pulling in customer data from across your marketing stack, it intuitively groups customers based on the recency, frequency, and monetary value of their interactions with you. You can then build segments to target high-value and loyal customers or even customers who need nurturing.  

The end goal is to never let a customer go after you have invested in their initial acquisition.  

Whether through CLV, RFM, lead scoring, or NPS, you need to harness your customer data to target the right customer with the right message at the most optimal stage of their journey.  

Personalize your marketing for memorable experiences

Personalization is about more than addressing your email subscribers by their first names. Truly personalized messages and content take user behavior as they interact across your digital touchpoints into account, as do user preferences such as specific product recommendations, choices, and interests. 

This ensures that customers are seeing deals, promotions, and content that is relevant to them, on the channels, and at the frequency, they want to see it.  

Recent research found that customers are 80% more likely to make repeat purchases when brands create personalized experiences. These experiences can be anything from relevant product recommendations, to location-based updates. Overall, personalized communication on your website or in your email marketing campaigns can increase brand loyalty —particularly among millennials—by around 28%.  

Personalized experiences help you nurture your customer relationship by being useful, informative, and relevant to their specific stage in the journey. This will keep customers returning to your brand time and time again, leading to higher retention rates.

The long-term value of customer retention

Marketers must understand the long-term value of customer retention. Nurturing your existing customers is just as vital to your business’ success as acquiring new ones. Not only is it cost-effective, but the likelihood of converting an existing customer is 60–70%, whereas you only have a 5-20% chance of converting new prospects. 

The results will not be immediate, unlike measuring the growth of your marketing list. You need to ask yourself how you can improve the customer experience to keep customers coming back and turning into brand advocates. 

Calculating and tracking CLV and customer behavior will help you identify high-value segments and where you need to direct your marketing resources. In turn, this will ensure you’re getting a higher ROI for your marketing campaigns. Additionally, ongoing data analysis can help you identify trends and set clear KPIs for your marketing team.

Customers want and value personalized experiences. Using your customer data and intent signals, you can segment and target existing customers with experiences tailored to their needs and desires. With a strong core customer base of loyal customers, you will ultimately see customer acquisition rates improve, as they turn into brand advocates and spread the word about your business.  

We know that the customer experience is essential. So much so, that recent years have seen the number of companies with a Chief Experience Officer (CXO) or Chief Customer Officer (CCO) grow from less than 65% to 90%. The value of a good customer experience (CX) is widely acknowledged and fully accepted.  

But theories on how to achieve it are varied, conflicting, and ever-changing. Every year, we’re told about new tools that will help us create the experiences that will drive conversions, ROI, and retention.  

• SCV 
• DMP 
• CDP 
• AI 
• CRM 
• PWA 
• CMS 

The list is as long as it is endless. But one thing all of these buzzwords and tools have in common is customer data. 

What is customer data?

Whether you’re communicating with customers, businesses, donors, fundraisers, or your own internal members of staff, every organization has a wealth of data at its fingertips.  

Customer data is more than a simple email marketing contact. A contact’s email address is just one of many invaluable gems of data that businesses collect to better understand their audience. Customer data ranges from behavioral to demographic and personal information about them.  

Connecting your data

Today’s cross-channel customer can interact with your business anywhere, at any time, and on any device. You can send out surveys to collect data, build preference centers, and track browsing behavior. The ways you can collect data are vast and varied. As are the systems that house it.  

The data you collect can be housed in your email service provider, CRM, ecommerce store, CMS, and more. To gain quick and practical insights from your data, you need a tool that can pull them all together. 

What is a customer data platform (CDP)?

Today’s marketers are faced with a particular problem that affects every business, everywhere. Disparate data. To resolve this issue, we’re seeing more and more companies emerge referring to themselves as a CDP – but what is a CDP? 

A CDP – customer data platform – is a piece of software that brings together disparate and disconnected customer data into a single unified source. This allows for information to be easily shared and accessible to other systems which empower marketers to target customers with personalized and relevant marketing messages.  

As the internet enabled brands to flourish online, companies have collected more data from more sources than ever before. With all this big data, demand for a tool that can process multiple data sets and deliver actionable insights has grown. Similarly, the need to share data across teams and departments has increased.  

Compliance with data privacy regulations requires legal teams to easily access a customer’s personally identifiable information (PII). The need to deliver relevant marketing messages means that marketing teams need to be able to pull insights about customer behavior and preferences. Customer service agents need to access personal information in order to provide a personalized experience.  

CDPs have emerged as the answer to solve all our problems. But is this really the case? Are CDPs really the only customer data tool we’ll need in the future?  

Segmentation, automation, cross-channel

What are we really after when we talk about customer data tools?  

We’re after a single source of truth. Once place where everyone can get the answers to the burning questions stopping them from achieving their goal, objectives, and KPIs. 

When we strip that back, we’re looking for a platform that can consolidate multiple data sources, creating insights that will help us build experiences that convert and retain customers. As package software, it needs to play well with others, unify customer profiles, manage PII, and have open access to grow with your business and your marketing stack.

As marketers, we have three core areas of concern that must be considered when sourcing a new customer data tool. 

1. Segmentation

Segmentation is essential for marketers looking to deliver personalized experiences. Creating groups of customers based on common characteristics – i.e., segments – is an invaluable but underused marketing tactic.  

Customer data tools need to be able to highlight, categorize, and group customers based on their common traits. How often do they shop with you? When did they last engage with your email marketing? Are they a high-value customer with a large contract with your business or do they need nurturing?  

The quicker and more accurate these insights can be drawn, the timelier your marketing communications will be. Has a high potential customer abandoned completing a price request form? You will be able to retarget them with a personalized and relevant message that will drive conversions.  

When considering which customer data tool to buy, these customer and segment insights should be at the top of your consideration list.

2. Automation

Automation, much like segmentation, is essential for marketers in every sector and every vertical. Marketing automation uses triggers to deliver messages in a timely and relevant fashion. These triggers can be any touchpoint across the customer journey; they could be date-driven (birthdays, anniversaries), behavior-based (abandoned carts, abandoned browse, page views), demographic (location, job title), and so much more.  

A customer data tool will be able to process these actions, identify customer intent, and enable marketers to send timely automated messages. You’ll never miss a conversion and retention-building opportunity again.

3. Cross-channel capabilities

As well as segmenting your audience and automation your messages, you need to be able to extend your reach. Today, customers are unpredictable. They can change devices and channels at any point along the customer journey. Cross-channel marketing enables you to manage multiple channels under one roof. No matter where the customer is, whether that’s geographically or in their individual customer journey, having cross-channel capabilities means you will always be able to connect with your customers. 

You need a customer data tool that can follow customers across their channel of choice, deliver messages – be it automated or single sends – and return actionable insight into customer behavior on each channel you offer.  

Choosing a customer data tool

The types of tools, systems, and software you can use to connect your data are varied but one thing is certain: it needs to work for your audience.  

As marketers, your job is to create customer experiences that engage, convert, and retain customers for the long haul. To do this, you need a data-driven marketing tool that can do it all; connect with customers on any channel, deliver insights you need to create a personal and relevant message, and help you target the right customer every time.