News
 Increase
Response Rates by Segmenting Your List
By Alan Sharpe
If you want to increase revenue using direct mail,
you have two options: sell more to the customers you
have, or find new customers and sell to them. The
tricky part is knowing how to do that.
I recommend that you start by segmenting your house
list. Dividing your customers into groups that share
a common interest helps you understand your
customers better. Let me illustrate.
Assume you are a business that manufactures and
markets a line of polo and golf shirts that
businesses issue to their staff as casual uniforms.
You examine your house list to find out who buys
what, and when and how. You are looking for
patterns, trends and opportunities.
Gender
You discover that 75 percent of your customers buy
shirts for male staff only, even
though you carry a line of womens shirts. There may
be an opportunity here. You may be able to find
customers in similar industries as your customers,
but in businesses that are operated by women and
that have female staff.
Industry
Looking at the SIC codes in your house file, you
learn that a large percentage of your clients are
retailers. This means you can look for other
retailers in other industry segments that may also
be interested in your product line.
Buying cycle
Another piece of data that you uncover is that a
sizeable segment of your customer base prefers to
have their shirts embroidered with their company
logo or slogan. What do these customers have in
common besides that? Are they in similar industries?
Are they all involved in the hospitality industry?
You may spot a new market for your products. Or find
a way to upsell existing customers when they renew
their orders.
Trends
You discover that one shirt is more popular this
year than it was last year. Is this a fad? A trend?
Look carefully and find out. Maybe you can
capitalize on this new development to grow your
business with existing and new customers.
Frequency
You also learn that many of your customers order
their shirts in the spring. Is this because the
weather is growing warmer, because your spring
prices are always lower, or because your clients
must hire all new staff each spring? Each of these
three reasons presents a different opportunity.
Payment method
Your customer database also tells you that the most
popular payment method is by check, followed by
credit card and cash. The most popular medium is
your catalog, followed by your website (although
your website is growing in popularity). Are there
opportunities here for reducing your promotional
costs by moving your entire catalog online? Or for
sending promotions by email instead of postal mail?
As you can see, the advantages of segmenting your
customer database are
great.
You get to understand your customers better
You uncover opportunities for creating special
offers for unique
segments of your list
You discover trends that help you modify your
product line
You gather the knowledge you need to make
intelligent decisions about which prospect lists to
rent
You discover potential markets that you had not
even considered before
--- Alan Sharpe is president of Sharpe Copy, Inc. (www.sharpecopy.com),
a B2B direct mail copywriting firm.
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Melissa Data
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