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

Why 2017 will herald a resurgence of values-based marketing

It doesn’t take long for predictions to become predictable: The rise and rise of Facebook; advancements in analytics; the normalisation of chatbots; personalisation, programmatic, automation, authenticity… The prediction that’s missing from these lists is that in 2017 we will witness a resurgence of values-based marketing.

Jacqueline Burns

Founder, Market Expertise

Why customer experience driven growth is set to take off

Our overall brand perceptions are invariably shaped by our experiences. And loyal customer relationships can be severed in moments by a negative service interaction.

Consistency and conversation: How branding and advertising can work better together

Advertising and branding are two of the most visible outputs of marketing, which is why getting them right is so important. However, too often the line between branding and advertising becomes blurred. This means advertising activity can be out of sync with brand, resulting in poor results for both functions.

Dan Ratner

managing director, uberbrand

Someone needs a swift kick up the bum for such an idiotic idea.

random

​Why a degree is no longer enough to get you hired as a skilled marketer

Read more

The frequent flyer programs are the new profit machines for airlines all over the world, as they have morphed to be mass marketing machin...

Steve@iFLYflat

Velocity frequent flyers program strong performer in mixed half-year for Virgin

Read more

Hi Jennifer, thanks for sharing these info regarding the digital marketing trends.I've created a related video to this topic, would you m...

Fabio Carry

Predictions: 17 digital marketing trends for 2017

Read more

Great news. Marketing automation can be very useful for companies at various stages of development. With so many tools out there it's bet...

Ben

How HBF rolled out marketing automation in eight months

Read more

I read a report that the business sector in Australia as a whole have yet to fully harness and see the proactive change that predictive a...

Alex Martin

Report: Predictive analytics, IoT, machine learning battle it out for marketing dollars

Read more

Latest Podcast

More podcasts

Sign in