The Best Customer Segmentation Examples for SMS Marketing Campaigns

Sending the same marketing message to your entire contact list is a good way to reach customers at scale. But it also creates missed opportunities to deliver more personalized and more relevant messaging.

With strategic customer segmentation, you send the right content to the right people at the right time. In this guide, we'll explore how this strategy improves conversion rates, customer relationships, and ROI.

What Is Customer Segmentation?

Customer segmentation is the process of dividing list of accounts or contacts into separate groups based on their shared qualities, behaviors, or interests. Marketers can then create tailored campaigns and messaging for each segment rather than relying on a more general approach.

This approach works for many digital marketing channels, including SMS, social media, and email marketing. Across channels, some of the most common customer segmentation models include:

• Demographic Segmentation: Connect with customers based on characteristics like their age group, gender, education level, marital status, or income level.
• Geographic Segmentation: Reach customers based on their location, such as their country, state, metro region, or time zone.
• Behavioral Segmentation: Target customers based on how they interact with your content (e.g., clicks or purchases) or where they are in their customer journey.
• Psychographic Segmentation: Market to customers based on attributes like their interests or lifestyle preferences.

Why Is Customer Segmentation Important?

When done right, customer segmentation can significantly improve the results of your marketing campaigns. Sending personalized, relevant messaging often leads to:

• Enhanced Engagement: The more your messaging speaks to your audience, the likelier subscribers are to interact positively with your content. This can drive more clicks, replies, and purchases.
• Higher Conversion Rates and ROI: Your entire list may not be ready to purchase. But when you send targeted offers to interested groups of customers, you can get more conversions and increase your ROI.
• Increased Customer Retention: If you regularly send irrelevant messages to customers, they may unsubscribe. Smart segmentation can prevent unsubscribes and boost customer loyalty.
• Better Resource Allocation: Sending mass texts and emails to your entire list can get expensive, especially if you aren't getting great results. Segmentation can reduce total sends and make them more impactful.

Best Customer Segmentation Examples Across Industries

Use these examples of customer segmentation to inspire your approach.

1. Ecommerce Segmentation Examples

Ecommerce businesses can use behavior data to target customers based on where they are in their shopping journey. Segment based on:

• Purchase History: Cross-sell related items or remind customers to repurchase items.
• Cart Abandonment: Remind potential customers to complete checkout and offer an incentive.
• Browsing Behavior: Send shoppers a special offer on an item they've viewed.

2. Retail Segmentation Examples

Retail companies and small businesses can use segmentation to build relationships with customers and drive more sales. Target these groups:

• VIP Customers: Give your best customers early access to new products.
• Seasonal Buyers: Nurture infrequent customers to keep your brand top of mind.
• Frequent Shoppers: Create a loyalty program with special deals to reward regular shoppers.

3. SaaS Segmentation Examples

SaaS companies can use segmentation throughout the customer lifecycle to improve engagement and reduce churn. Focus on these groups:

• Free Trial Users: Remind new users about the end of their trial and prompt them to sign up for a plan.
• Active Users: Share advanced tutorials and new features to help users get more value from the platform.
• Churn-Prone Customers: Send renewal offers or value adds to customers who are likely to churn.

4. SMS Marketing Segmentation Examples

Companies in any industry can use SMS to respond to customer needs, drive sales, and boost brand loyalty. Market to these segments:

• Subscriber Status: Welcome new subscribers or reward longtime subscribers.
• Geographic Location: Send targeted offers to subscribers in certain cities or regions.
• Preferences or Interests: Create customized offers based on what subscribers have viewed or purchased.

Customer Segmentation Best Practices

Follow these guidelines to get better results from your segmentation strategy.

Define Clear Segmentation Criteria

Start by getting crystal clear on the different groups of customers or subscribers you want to target. This way, you can set up the segmentation and customize the messaging.

For example, you may want to connect with new customers so you can introduce your brand. Or you may want to reach loyal customers so you can share exclusive offers.

Leverage Customer Data and CRM Tools

You don't have to guess which customers fit into different segments. Instead, use data from your marketing platform and CRM tool to build each segment.

To gather more data, do some basic market research by surveying new and existing customers. For example, ask new subscribers about their interests or preferences so you know what kind of messaging to send.

Optimize Campaigns and Use A/B Testing

Segmentation can improve everything from conversion rates to customer lifetime value. However, it isn't something you can set and forget—and then hope for the best.

Use A/B testing to experiment with different messaging and find what works best. Check analytics regularly and make data-driven decisions about optimizing campaigns.

How to Use SMS for Customer Segmentation

Follow these steps to incorporate segmentation in your SMS marketing strategy.

Segment SMS Lists Based on User Behavior and Preferences

First, set up your segments. With Sakari, you can create different segmentation groups based on the preferences your subscribers express or how they interact with your brand.

Sakari's dynamic audiences update automatically after each customer interaction. This helps your targeting stay relevant so you can send more meaningful messages.

Create Targeted SMS Marketing Campaigns

Next, map out your SMS marketing efforts and tailor campaigns to each persona. Here are a few ideas:

• Create a welcome sequence to introduce new users to your software platform.
• Follow up with ecommerce customers after a purchase to request a review.
• Send event invitations to subscribers in a certain geographic area.

Review Analytics and Optimize Your Approach

Once you implement your segmentation strategy, check your SMS analytics regularly. Check engagement metrics like click-through rates, conversion rates, and reply rates.

Then use your top-performing SMS campaigns to optimize your approach. For example, if you find that first-time purchasers respond well to upsells, test a similar tactic with other segments.

Common Customer Segmentation Challenges and How to Overcome Them

Watch out for these common SMS segmentation issues and use our suggestions to address them and improve your results.

Data Silos and Integration Issues

When you use multiple channels to market your business, you often end up with data silos. Your CRM might house a ton of customer behavior data. But if your marketing platforms can't access the data, it becomes useless.

Look for an SMS marketing platform that integrates with your existing tech stack, including your CRM system and your email marketing tool. This way, you can securely share the customer data and use it for segmentation.

Over-Segmentation and Diminishing Returns

Creating segments for specific needs, interests, or behaviors can create a better customer experience and improve your ROI. But there's a fine line between optimizing your segmentation process and overdoing it.

When segments become too small, they often have unpredictable results that lead to diminishing returns. Instead of creating an endless list of small segments, focus on creating specific groups that align with the most valuable segmentation criteria.

Privacy and Compliance Considerations

No matter how you define and build your target audiences, you have to abide by SMS marketing regulations and privacy guidelines. This includes:

• Obtaining permission to message customers and prompting them to opt in to your list
• Making it easy for subscribers to opt out of your marketing with a single keyword
• Using an SMS automation platform that complies with TCPA and GDPR guidelines

Why Choose Sakari for SMS Customer Segmentation?

Sakari's advanced segmentation tools make it easy to create contact lists via upload or lead capture—and then split subscribers into relevant groups. Create segments based on demographics, location, interests, or behaviors.

Our software platform integrates with 1,300+ tools so you can easily add it to your tech stack. Connect Sakari with all major CRMs as well as email marketing and ecommerce tools.

Plus, our automated texting software lets you create trigger-based workflows that send targeted campaigns to specific segments behind the scenes. Schedule campaigns to send at the ideal time for each audience.

Check our real-time analytics for performance insights. Check metrics like delivery rate, engagement rate, and click-through rate. Then, optimize campaigns to improve results.

With Sakari's pricing plans, you can keep SMS marketing affordable. Our monthly subscriptions include unlimited users and contacts and a preset number of SMS segments for a flat fee. Roll over unused credits and scale up or down to meet your sales and marketing team's needs.

Get Started With SMS Customer Segmentation

When you send the same generic message to everyone on your contact list, you risk customers ignoring your texts or unsubscribing altogether. SMS customer segmentation is the key to sending more relevant messages that improve conversions and loyalty.

Unlock Sakari's SMS segmentation tools and automated workflows. Sign up for a free trial of Sakari and start connecting with your most valuable audience segments today.

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