We talk about lead segmentation a lot. A lot of other people talk about lead segmentation, too, and there’s a lot of really bad advice running around out there in the interwebs. There are two ways in which lead segmentation can go horribly wrong. Let’s talk about them, and how you avoid falling into either one of these traps.
First, what is “lead segmentation” and why do it?
If you understand this already, you can skip to the next section. 🙂
Lead segmentation is when you take all of the people on your list and create smaller groups, or segments of your list, based on some criteria that makes sense for your business.
The purpose of lead segmentation is to narrow your focus, so you can be more personal in your marketing efforts.
But… it doesn’t always work the way it should. That’s where those two traps come into play. Let me explain.
Trap 1: Lead Segmentation Based on Demographics
I read a blog post recently that advised people to segment their leads in order to get more engagement with emails. That’s true, but then the post went horribly off the rails, with three specific pieces of advice that are… not good advice. He says, “there are unlimited ways to segment your list. You can segment based on age range, geography, buying behavior, education, job title…” He then goes on to say “In order for you to effectively segment, you need to gather as many details from your subscribers as possible. Gender and recent purchases are details that are easy to get. More specific details like individual preferences may require that you run surveys. Another way to generate data is to include more form fields. Visitors must fill them out first before they get to download your lead magnet or free gift.”
Let’s dissect this advice and make it real.
For your business, focus on the RELEVANT demographics and ONLY the relevant demographics. For example, unless your perfect potential customer MUST be of a certain age to buy, don’t be tempted to use age for lead segmentation. If you have an offering that is specifically for people over 40, or people under 20, age STILL isn’t a segmentation technique – it’s the definition of your perfect potential customer. Those who don’t meet that definition will weed themselves out anyway. Similarly, if your perfect potential customers are located in the United States, you don’t need a segment for non-US people. The non-US people should simply not be on your list. Right?
Most of the “census-type” segmentation techniques aren’t accurate predictors of a propensity to buy.
Bonus Time: The other thing that is wrong with the advice above is that you never EVER want to add demographic information to lead capture forms. More questions creates more friction, and more friction leads to fewer opt-ins. Don’t be tempted to include more form fields on your opt-in forms, especially for lead magnets or free gifts (attractors), because you will get fewer opt-ins AND some false data from the folks who do fill in those extra fields.
You could do surveys, but people generally don’t like surveys. If your survey reads like a census form, you’ll get few survey completions and not much of value from those that do get completed. Plus, surveys that include a bunch of demographic questions typically don’t do well at the top of the funnel – when people are merely curious. They just want access to a piece of content. They don’t know you well enough to give you their demographic profile at this point.
Segment This Way
The very best way to do lead segmentation is to based it on the actions the people on your list take. What pages on your website do they view? What other attractors (lead magnets) have they downloaded? What blog posts have they read? What emails have they clicked? Use that knowledge to understand what each person on your list is truly interested in, and gather them into different “interest buckets” with others who view, click, read, and download the same things.
With your leads grouped by interests, you can now make your marketing much more personal and relevant to your perfect potential customers.
Trap #2: Sending the Same Email to a Smaller Group Isn’t What Lead Segmentation is About
I saw it just the other day when looking at a potential client’s email habits. I asked about one email in particular – to whom had it been sent? It was a pretty generic email about a particular offering, so I figured it had been blasted out to their entire list. Nope. They proudly told me that they only sent the email to two segments of their list and went on to explain that segmenting their list isn’t really working well for them at all.
Of course it’s not.
Sending a generic email to a smaller list isn’t really lead segmentation – certainly it’s not leveraging lead segmentation to do what you need done. If you sell personal training, would you talk to a thin-and-fit person the exact same way that you would speak with an overweight, out-of-shape person? Of course not! If you’re in the business of manufacturing store displays, and you come out with a new kind of display, wouldn’t different types of stores be interested (or not interested) in that new model for different reasons? Sending a generic “Here’s our new store display” email to a segment of your list isn’t really using lead segmentation.
Once more. Using lead segmentation to send generic emails to smaller groups is still sending generic emails. That’s not what lead segmentation is about, and, if you’re doing that, you’re going to get the same old results you’ve always gotten – or worse.
Here’s What To Do
Leverage what you know about people’s interests to create emails that will speak directly to them. In our personal training example above, you’ll know what camp people fit into (pun not really intended) by what they’re reading, what they’ve viewing, and what they’re clicking. If you have content on your personal training website that speaks to thin-and-fit people, and different content that speaks to the opposite group, you can put people into the right interest groups and correspond with them in a way that will make sense to them. Chances are good that people who click on a blog post “Keeping that Pesky Five Pounds at Bay” are most likely in the thin-and-fit camp, whereas people who click on a post titled “Getting Rid of the First Twenty Pounds” are likely not so thin and fit. See what I mean?
Similarly, if that new store display could be used for a grocery store and a clothing store, crafting a message for each of those segments individually that speaks directly to what their lives could be like if only they had that new display is what will bring the best results.
Two Keys to Making This Work
There are two keys to making lead segmentation work for you, and work in the way it’s going to bring you the best results.
The first key is content. If you don’t have content that speaks to different segments of your list, you’re going to be blasting the same marketing message out to everyone all the time. The longer you do that, the more fatigued your list will get. Commit to creating content that will speak to your different segments.
The second key is tracking. No matter what else you do, you’ve got to be able to track what pages people are viewing on your website, what blog posts they’re reading, what events they’re attending, what emails they’re clicking. You want that information all in one place, so you can act on it. Ideally, you can use the actions of the people on your list to create automation re-actions from you. If you don’t have a marketing automation system that does that, please get one. (Both Genoo and WPMktgEngine include these capabilities, as do some other, more expensive marketing automation systems.)
Lead Segmentation Pays Off
Sending more personalized emails based on the interests of the people on your list has already proven to have a much higher rate of return than the old batch-and-blast emailing practices. We just reviewed an analysis done by one of our competitors in which they tout open rates between 20 and 23% with clickthrough rates below 3% as being their benchmarks. When lead segmentation is implemented well, we see open rates in the 50-60% range and clickthrough rates that can get above 10%.
What would it do for you to have open rates and clickthrough rates like that?