The Power of List Segmentation When It Comes to Direct Mail

List segmentation is nothing new. For years, marketing teams have categorized email subscribers based on targeted groups. For example, one group may be created because of geographical location, whereas another list focuses on previous purchase activity. This strategy offers a spectrum of benefits that apply to all channels — not just those online.

Direct mail marketing is one channel that shines when aiming to boost ROI, and like email, it benefits from list segmentation. Here's a deep dive into how to get started.

An introduction to direct mail marketing list segmentation

Most online resources highlight the benefits of list segmentation for email marketing. However, direct mail segmentation is just as powerful, and when these channel strategies are combined as part of your omnichannel marketing strategy, the results can be impressive.

When your goal is to improve conversion rates and your ROI, direct mail marketing ticks all the boxes, especially when leveraging an automation platform. According to the 2023 State of Direct Mail report, 81% of marketers who use a direct mail marketing software platform agree it delivers the best response rate of all the channels their company uses today. When it comes to ROI and conversion rates, 74% of marketers agree that direct mail delivers the best return of any channel — up 7% from the year prior.

Whether your goal is higher engagement levels or stronger brand loyalty, direct mail list segmentation allows you to send more relevant content, which drives higher response and conversion rates.

Read more: Marley Spoon feeds growth with 20% of conversions from direct mail in a single quarter

Knowing your customer is key

Your customers aren't all the same, so why would they receive the same direct mail campaigns? 52% of consumers expect campaigns to be personalizedfor them, so give them what they want.

Whether you're a B2C or B2B company, you likely have more than one type of customer. Even if your customers share similar demographic characteristics, they will likely differ based on behavior and psychographic variables. They can also be at varying points in the sales cycle, requiring unique messaging. For example, your marketing content and offers will differ in an acquisition campaign or a retention-based one.

This is where direct mail list segmentation comes into practice. If you send irrelevant content to someone unlikely to engage, it will contribute to waste both in terms of human and natural resources. With 58% of marketers investing more marketing budget in direct mail this year, you have to ensure you optimize every campaign for performance.

For example, if you're launching an add-on product and want to mail out a VIP discount code, you wouldn't send this campaign to your list of leads. Instead, you'd send this promotion to those who have already purchased the related product. Another example would be a clothing retailer running a lead generation campaign. Sending the same fall clothing collection to New York and Florida customers wouldn't make much sense. Relevancy is king.

Mailing to specific segments and cohorts of your audience ensures you get higher response and conversion rates and increase ROI.

Must-read: The Intelligence Behind NEXT Insurance’s 4x Increase in Campaign Performance

How to get started

Direct mail list segmentation strategies will differ based on your goal. However, an ideal starting point is to use customer data to segment based on the following examples.

Geography

Lists can be generated based on a customer's state, city, or zip code. You can also take this further, focusing on what's relevant to each location concerning climate, culture, or even language.

Demographics

When considering customer age, education, gender, etc., you must ensure the material makes sense. Your design should market to that specific demographic. For example, if you want to target a particular age bracket, why not create a campaign based on time-appropriate, nostalgic references?

Get more consumer insights in the 2022 State of Direct Mail Consumer Insights Report.

Interests

Reaching out to your audience based on interests can help you build meaningful connections to encourage greater loyalty and higher retention rates. Mailboxes are often filled with bills and notifications. A unique postcard highlighting the recipient's interests will help you stand out. Consider lifestyle preferences and topics your audience is passionate about, like the environment. Here is an excellent example of eco-conscious mailers that will give you an edge over competitors.

You can create a wide range of targeted lists based on anything from purchase history to shopping behavior. Focus on your objective, your audience, and what you aim to market — then segment accordingly.

Get inspiration from the Best Direct Mail Campaigns.

Unlock the power of Lob

New to direct mail marketing or want to jazz up your current direct mail list strategy? Lob can help.

Lob is the only direct mail automation platform to help you create personalized, measurable mail at scale. Contact an expert to learn about the available tools and how to build direct mail marketing lists today!

We also invite you to learn how Lob can help with your marketing lists by watching our webinar, Intelligent Targeting for Direct Mail Campaigns.