Every Email Marketing Strategy has two possible outcomes:
- It annoys customers and gets you on the Spam List 🚩
- It encourages repeat purchases, lowers the number of cart abandoners, prevents churn⛳
Generally speaking, it’s an either/or type of situation. Your responsibility as a marketer is to orchestrate email marketing automation campaigns that are both relevant to the customer and welcomed in the inbox.
How do you accomplish this?
If you’re looking for marketing-made easy guides, you’re in the right place. Today we’ll look at RFM segmentation as a marketing tool and how it unlocks the power of email marketing campaigns and ultimately helps you grow your business.
Discover how combining email marketing campaigns with RFM Segmentation empowers you to persuade customers to buy more frequently and spend more on their purchases.
How to Segment Your Email List by Customer Engagement
To avoid sending those spammy emails nobody wants, you should apply some form of email segmentation to your customer base.
However, you want to avoid segmenting for the sake of segmenting.
You want to find a way to analyze your customer base, so you can understand who are your most important customers and find a way to balance the costs of acquisition with the generated margin.
RFM segmentation steps in, helping you get a clearer picture of your customer base.
For clarity’s sake, let’s quickly recap the concept of RFM Segmentation.
RFM (Recency, Frequency, Monetary) segmentation divides customers into sub-groups based on their purchase history.
With this technique, you’re rating each customer a score from 1-5 for each variable:
- Recency: how recently a customer purchased something from you.
- Frequency: how often a customer purchases from your store.
- Monetary: the amount of money a customer spends on your brand.
Each customer gets assigned to an RFM group based on the score combination. It may sound complicated, but it’s simply a matter of seeing how much value a customer brings, then treating him accordingly.
For example, customers who have recently made a purchase, purchase frequently, and spend a significant amount of money with your brand are named power customers. They’re considered the most valuable and are placed in the highest RFM segment.
If last week we looked at how email marketing leverages power customers (your best ones), today it’s time to look at another segment: active customers.
What are Active Customers?
Active Customers have purchased from you at least once in the last 12 months.
The good news is that they didn’t yet churn and are still engaged. The problem with active customers is that they aren’t bringing in significant revenue, nor are they frequent buyers.
However, not all is lost since you can reactivate them, increase their AOVs and grow your business through the power of your active customers.
In the Customer Value Optimization methodology we’re applying at Omniconvert, active customers can be further segmented into four sub-groups – each with its own particularities and approach.
- Potential Lovers (R =5, F= 1, M= 5)
Potential lovers are newly acquired customers with a high potential of moving up and becoming lovers. They can become a real asset to your store if you pay attention to them.
- Flirting (R = 4, F = 1-2, M = 4-5)
Flirting customers are former New Passions. While they used to buy frequently enough, something happened that made them drop a point in recency. They might buy less often, but they still generate significant revenue.
- Platonic Friends (R = 3/4, F = 3, M = 3/4)
Platonic Friends are active buyers who usually place orders below the average. Their purchases are rare, too. Your purpose is to persuade them to put in more repeat orders while spending more money on your store.
- Apprentice (R = 4, F = 1, M= 1)
These customers are recent buyers with low monetary value. They have the potential to spend more, but they may still be threading the water and purchasing similar products from other stores.
Apprentices have yet to become loyal customers, so you need to earn their trust to create a buying habit that elevates them into the power customer category.
The Importance of Active Customers Email Campaigns
Nowadays, brands are almost exclusively focused on two types of customer relationships:
- New Customers
This involves a strong focus on potential customers, investing time, money, and human resources in the acquisition, and trying to get as many new customers as possible.
The problem with acquiring new customers – primarily through Social Media Ads – is that it tends to become more expensive than brands can afford.
Surely you’ve been in a situation where your profits weren’t worth the effort because the CAC was higher than the current customers’ Average Order Values (AOVs).
Yes, you might grow your audience in time through enough Social Media campaigns. But is it worth it if people aren’t staying with you long-term or bringing in significant revenue?
- Former customers
With former customers, marketing teams use discounts and other perks to reengage inactive customers, bring them back into the store, and rekindle the relationship.
While key audiences, new and former customers aren’t the only source of revenue.
Active Customers often fall through the cracks and get neglected. It’s a pity since they can become one of the most impactful customer segments.
Active customers keep coming back and, for better or worse, demonstrate enough potential to become high-value customers.
You will benefit more from speaking to them and encouraging them to stay engaged than assuming their status will always remain the same.
Active customers are the middle child of your customer base.
The middle child often gets overlooked in a family when parents are more focused on older or younger children.
In business, active customers can be taken for granted, as brands tend to focus on acquiring new customers or reactivating lost customers.
Yet, with the proper attention and support, they can become the foundation of your brand.
How to Do an Effective Active Customer Email Campaign
At its best, an email campaign for active customers will highly impact your conversion rates, sales revenue, and even customer loyalty.
At its worst, these campaigns will fill inboxes with irrelevant and unsolicited messages, causing frustration and wasting time.
To find the balance (and avoid getting hate mail), it’s crucial you look at email campaigns as more than a series of reminders or discount email blasts.
For active customers, email should be all about customer engagement, building a deeper relationship, relighting the spark, and moving things forward to the next level.
The thing about active customers is that they still need to take a stand. They don’t love or hate you. They’re neither loyal nor churned.
They’re just there – testing your products, buying just enough to stay relevant, or maybe on the verge of slipping away.
Active customers need personalized and relevant email campaigns that remind them why they chose you in the first place (for the Flirting Segment) or prove you’re worth sticking around (for Potential Lovers, Platonic Friends, and Apprentices).
If the active customer is the middle child, he requires nurturing, care, and time to evolve into his full potential.
It’s about something other than bribing a customer to buy more; instead, it’s about looking after him so he doesn’t lose his way.
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Email Flows for Active Customers
Now that we’re in the right mindset to create an effective email campaign, it’s time we looked at marketing tips for nurturing and re-engagement campaigns.
Our Managed Services department uses these flows to boost conversion and engagement rates for our clients, reduce the % of cart abandoners, and push active customers into the power segment.
Flows for Flirting Customers
Remember that Flirting Customers are former New Passions; we had a promising relationship, but something happened along the way that made them lose faith and drop a point in frequency.
The purpose of an email campaign for Flirting Customers is to drive brand loyalty and (re)build trust.
Here are two re-engagement email examples for this segment:
- Tier-based Benefits flow
Since you aim to increase the purchase frequency, you can create an attractive loyalty program with appealing rewards for frequent buyers.
To keep it relevant, interview or survey this customer segment and identify the most valuable rewards from their POV.
Use marketing automation tools such as Klaviyo or Active Campaign and turn monotonous marketing work into a well-oiled revenue-generating machine.
- Subscription Boxes
A less common tactic that eliminates flirting behavior is creating subscription-based packages that naturally increase the purchase frequency.
Ship lifestyle items or restock packages regularly to eliminate the stress of the shopping list and bring convenience to the consumer. You can select popular products that customers purchase, create product bundles (that also help consumers save money), then promote them via email.
The great thing about subscription boxes is that they create healthy buying habits and bring more predictability to your business while moving customers to the next-level segments. It’s a win-win for both sides.
Flows for Potential Lovers & Platonic Friends
These segments are similar in recency and frequency, the only notable difference being their AOV. Potential lovers place orders with high monetary value, while your platonic friends won’t spend as much on your shop.
Before you set up and trigger email flows for these two segments, we recommend you conduct both quantitative and qualitative research to grasp the motivation behind their first order and what prevents them from placing orders more frequently or of higher value.
When you have all the information, you can send relevant and attractive emails, presenting offers your customers can’t refuse.
- Customized Sales Offers
Create unique promotions for popular products amongst these segments (based on purchase history) to increase the purchase frequency. The trick here is offering an extra perk (gift, future discount, or free delivery) for a certain threshold higher than their AOV.
This way, you can encourage customers to spend more and reduce the risk of an abandoned cart.
At the same time, you can make customers feel more valued and strengthen your relationship.
- Social Proof
When people stop buying, it either means they found a better offer or something made them lose faith in your brand. In this case, you can leverage reviews and testimonials from your power customers to remedy the situation and persuade the audience to take action.
Include social proof in your email flows to increase the credibility and trustworthiness of your promise and persuade customers to buy your products.
Bonus – use User Generated Content to show that real people are using and enjoying your products. Since there’s a general distrust in brands, providing testimonials from people who appreciate your products goes a long way in reactivating these segments.
- Abandoned Cart Emails
These emails are triggered when your customers place items in the shopping carts but need to complete the purchase.
An abandoned cart email should be personalized, relevant, and valuable to the customer.
Flows for Apprentices
With Apprentices, you need to work on building the relationship. The honeymoon is over, and they aren’t convinced you’re the one.
To eliminate the need for second-guessing, aim to deliver an excellent customer experience.
- Onboarding flow
*Disclaimer: this flow only applies to the first order.
Because there isn’t a relationship in place (yet), you should start nurturing Apprentices from the very beginning. Create a welcome email with personalized messages that show customers how to get the most out of their purchases.
You can include links to your FAQs guide, blog, or YouTube Channel.
At the same time, offer information about your company and brand to increase trust. You can also highlight the main differentiators and benefits of the product and the perks they have as customers to eliminate buyer’s remorse.
- Incentive Campaign
Since the Apprentice’s AOV needs to be higher to land him in a power customer group, you can run a campaign for your best seller products (at an attractive discount) and generate higher order values.
Offering discounts and attractive promotions encourage them to purchase again and drives repeat sales.
- Loyalty Programs
The last flow on our list is a loyalty program email highlighting the benefits of customers becoming loyal to your brand.
The Apprentice is already on that path – yet he still needs a little nudge on your side.
The key here is waiting until the second order. The second order signals the first experience was pleasant, so it’s a good moment to increase interest and showcase the benefits of your loyalty program.
Focus on the top-notch perks customers will receive if they continue buying from you. Show them how close they are to entering the loyalty program.
There you have it: your handbook for turning the most neglected customer segment into the secret sauce that takes your marketing game to the next level.
With extensive research and strategic flows, you can say goodbye to low open rates, boring campaigns, and mediocre conversion rates.
Instead, you’re placing yourself on a steady path toward creating a loyal customer base and skyrocketing your revenue.
Good luck and happy selling!
Frequently Asked Questions about Email Flows for Active Customers
In RFM segmentation, Active customers are customers who bought from your store at least once over the past 12 months. This segment is made out of customers who either dropped from higher segments, or who are constantly buying with low AOV. An email campaign for this segment aims to increase the purchase frequency and the monetary value of their orders.
One example of an Active Customer segment is the Platonic Friends group. The customers usually place orders infrequently and below the AOV of your store.
In RFM Segmentation we have four types of customers, based on their buying behaviour. You have thePower Customers (who bought recently, return frequently for repeat purchases, and spend a lot of money in your store), Active Customers (buy infrequently and the AOV is low), At-risk Customers (who are close to churning) and Lost Customers (who stopped buying from you).
To identify the number of Active Customers you need to perform RFM segmentation on your customer base and identify the exact number of customers.
To identify Active Customers you need to perform RFM analysis and grade your customers on a scale of 1 to 5 for each of these three variables: Recency, Frequency, and Monetary Value. Active Customers get average scores, meaning they buy infrequently and the AOV is low