Why Ozsale believes customer segmentation can go too far

Australian online retailer's marketing team talks about why relevancy, and not segmentation, should be the focus for data-driven marketing

While customer segmentation has become something of a mantra for data-driven marketers, few would suspect it’s also possible to take segmentation one step too far.

It certainly wasn’t an outcome that was expected by the flash sales company, Ozsale. The business uses an email-driven model to help fashion brands sell excess or surplus inventory to a database mainly comprised of women.

Ozsale’s original model had been to send the same email to every customer, but the purchase of analytics and campaign management technology from Alterian (since acquired by SDL) gave it a greater ability to capture customer data and use that to create more targeted customer segments.

But according to chief executive of the APAC sale group, Carl Jackson, creating smaller and smaller customer segments based on behaviour led the company to reduce the range of offers it was sending to those customers.

“We went to a point where we went very granular, and dropped off some of the other stuff,” Jackson says. “And that had an impact – we stopped sending as many emails.”

While it is a common desire among email marketers to reduce the volume of email in favour of more highly-targeted communications, this can lead to a reduction in overall sales, as customers are seeing less content.

“We’ve since stepped back from that a little bit and are now offering personalised, relevant content but to a very, very broad customer segment,” Jackson says.

Today, Jackson says it is relevancy that is the goal of Ozsale, rather than highly-targeted customer segmentation. The company has developed six broad categories, ensuring it is able to make offers of products identified in adjacent categories to what customers have purchased previously.

Ozsale has clearly got the balance right, and is now sending offers to 8.5 million email addresses across six countries in the APAC region, and is set to expand further. The SDL tools enable it to capture a wide range of behavioural data, from click throughs and purchasing data to measures of how long customers spend hovering over certain offers.

Even so, Jackson says he is taking a cautious approach to how far he pushes the technology, particularly regarding those possibilities around its core activities in email marketing.

“We’ve gone through explosive growth, and there is lots of great stuff out there,” he says. “But we have been very focused on doing the things that work, and not getting distracted around the other channels and the other pieces of engagement.

“And tempting as it is to do lots of nice things, we stayed very focused on our email segmentation and our email targeting.”

Follow CMO on Twitter: @CMOAustralia, take part in the CMO Australia conversation on LinkedIn: CMO Australia, or join us on Facebook: https://www.facebook.com/CMOAustralia

Signup to CMO’s new email newsletter to receive your weekly dose of targeted content for the modern marketing chief.

Join the CMO newsletter!

Error: Please check your email address.
Show Comments

Supporting Association

Blog Posts

Top tips to uncovering consumer insights for business innovation

An in-depth understanding of consumers sits at the heart of what we all need to do, but we know it’s not always easy to uncover insights that will unlock a true innovation opportunity.

Matt Whale

Managing director, How To Impact

Is your customer experience program suffering bright shiny object syndrome?

You may have heard of ‘bright shiny object syndrome’. The term is used to describe new initiatives undertaken by organisations that either lack a strategic approach, or suffer from a failure to effectively implement.

Leveraging technology to stand out in the sea of sameness

The technology I'm talking about here is data and marketing automation. Current digital marketing methodology, much as it is practiced at Bluewolf, dictates the need for a strategy that does four things: Finds the right audience, uses the right channel, delivers the right content, and does all of that at the right time.

Eric Berridge

CEO and co-founder of Bluewolf, an IBM Company

Lead Management is very important part of the process. For anyone running Facebook Lead Ads I would recommend using this service.Get your...

Dirk Lo

How this fintech startup is improving content marketing and lead generation

Read more

I am agreeing with Mr. Tyron Hayes that a measured test-and-learn approach could be missing opportunities to not only better engage custo...

brunson5862@mail.ru

CMO interview: How Curtin University’s marketing chief is using test and learn to cope with complexity

Read more

Excellent!

Dr Sadasivan,US

Shakespeare shows data and creativity aren’t Montagues and Capulets

Read more

Great article! Agreed with all... Matthew Lerner, Deeps De Silva... When a company has a great product that solves customers needs, a gre...

James Tyler

Why marketers are embracing growth hacking techniques

Read more

Very good article, Social media analytics helps in problem identification. They can serve as an early warning system for negative custome...

BizVinu

Four ways to use social media to boost customer loyalty

Read more

Latest Podcast

More podcasts

Sign in