You will hear the words segment, segmented or segmentation used every time someone speaks of email marketing campaign analysis or Web analytics. The Web Analytics Association defines segment, with respect to Web sites, as:

"A subset of the site traffic for a defined period of time, filtered in some way to gain greater analytical insight …"

There’s no doubt that segmentation remains the most important and valuable tool you can use to understand and optimize your marketing efforts and maximize profits. At the same time, segmentation remains an ambiguous concept in many people's minds, mainly because how to segment is usually left out of the conversation.

There is an easy three-step process you can use to better organize your thoughts and efforts for segmentation, help to take the ambiguity out of its meaning, and allow you to be more effective when analyzing business performance and making well-informed business decisions.

If you can bend and fit the data that is available to you and accomplish these steps, you will have an extremely efficient and valuable way to segment and understand your audience, better address their needs, and maximize your profits:

Step 1: Consider and create three dimensions for your segments.

Characteristics about email recipients can often be grouped into high-level categories that include demographic, behavioral or campaign dimensions. Find a way to group your audience (and data) within these categories, using whatever dimensions are most important to your business.

Demographic: geographic location, age, sex, job function, browser type, etc.

Behavioral: what actions the recipients have taken such as made a purchase, returned several times, remained for x-number of minutes, signed up for an e-newsletter, etc.

Campaign: how recipients were led to your business such as by pay-per-click ad, from an email marketing campaign, via social discussion, by organic (non-paid) search, etc.

Once you have decided upon your dimensions you can begin to analyze how important each one is to your business, hone in on sub-categories, and filter out other data that is just creating noise.

Step 2: Consider and create the positive and negative of the dimensions.

People often forget that great insight can be gained from the analysis of something that hasn’t happened (the negative of a segment) or isn’t the case, rather than from what has happened or is the case. For example, traffic “not from California” could be a more important dimension for your business than “from California.” Be sure to think about the negative, and have the ability to collect such data and use it when creating your segments.

Step 3: Combine the right three dimensions to get the most important segments.

Now, considering your three dimensions along with your negatives, you can create and analyze segments that are most important to your business. The intersection of a specific combination might yield immediate value and provide direction for your marketing efforts. The end result is what most tools refer to as advanced segments or advanced segmentation.

Shown below is a simple example of putting all three steps together, using “Not from California” as the demographic dimension, “Abandoned Shopping Cart” as the behavioral dimension, and “Monthly Newsletter” as the campaign dimension. The intersection of any two or all three circles is a great place to start an analysis using advanced segmentation.

So, I strongly recommend that you make your next conversation about segmentation more valuable by framing it to include this three-step process.

Please share your recommendations and insights regarding segmentation in the ‘Comments’ section below.

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