The key to SMS marketing is to send the right message at the right time. Segmentation divides your customers into segments based on their shopping behavior, interests, and personal preferences. 

You need to look at different elements of each customer, including engagement and purchase history, product interest, price sensitivity, average spending, and geolocation. By looking at these elements, you can send them messages that are relevant and drive engagement. 

Boosting ROI Based on Engagement and Purchase History

You can boost your ROI before your customer ever makes a purchase and then continue engaging with them after they do. Create a segment of potential buyers who have never made a purchase or placed an order with you, and then send out a first-time buyer discount offer and give them a deadline. You can also offer a bundle, a welcome gift, or free shipping. 

By sending these types of offers, you are already building a relationship and showing them that your brand offers value in its SMS messages. 

With customers who are already engaged, you can send out regular SMS messages to interact with them. You can further segment them into subscribers who have clicked on an SMS message, replied, made a purchase, or abandoned cart.

You can send these subscribers product spotlights, guides, and educational content. If you have a segment of frequent buyers, you can send them product recommendations that show promotions, limited discounts, new product launches, and almost sold-out items. This helps nudge them to make another purchase and increase AOV. 

If you have customers who have purchased in the past but haven't been back for more than 30 days, you want to target them with a rewards program or offer 25% off purchases of 3 times or more or if they spend $100 or more.

Boosting ROI Based on Product Interest

Another way to segment is by product interest. You can look at your customers' search history, favorited items, or items left behind in their shopping carts, which can better help you understand intent.

If they have left an item in their shopping cart, you can use SMS to send them a product reminder with an option to reply to "Buy" or throw in an additional 10% off if they purchase by midnight. The key is to offer incentivizes that get them to complete their purchase. 

Boosting ROI Based on Price Sensitivity

This segment refers to customers who only purchase during a sale or never increase their AOV. You can incentivize these customers with SMS marketing with limited price promotions or with a buy now pay later offer (if possible) or discounts. 

Holiday shoppers fall into this category; one strategy could be to engage customers with a "Get them before they're sold out!" offer, giving them the option to pre-order popular and trending items before they're back in stock and made available online. And remember, seasonal customers are focused on the best possible deal, so include one with every text message you send.

Boosting ROI on VIP Status

Your VIP customers are those who are highly engaged and make frequent purchases. They are reliable and responsive to offers. You can segment them based on their CLV or the number of orders they have placed. 

It is essential to let these customers know that they are highly valued. You can reward them for loyalty by offering new and exclusive access, extra discounts, and more. Nurturing these reliable customers and ensuring they remain happy with your brand is important. It's been reported that repeat customers spend almost 70% more!

Key Performance Indicators (KPIs) for SMS Marketing

Like any marketing campaign, you need to measure how well your SMS campaign is performing. You should have a goal for each campaign and know your KPIs. Which segmentation strategy you choose depends on your goals. Consider metrics such as how long until repeat purchases, customer lifetime value, revenue per recipient, and more. 

Segmentation is important because it is less expensive for brands to get customers to become repeat buyers than it is to acquire new customers. Your customer acquisition costs are also lower when you retain customers and turn them into repeat buyers. 

The key is to focus on using segmentation to send personalized and relevant messages to segments of customers and increase the likelihood that they will respond to your offers. First-time customers will respond differently from repeat customers, and your SMS campaign needs to reflect that to be successful. 

Segmentation Makes it Simple and Keeps it Relevant.

When you segment your customers, the messages are more relevant. This, in turn, makes them feel valued. When you message highly engaged customers with special offers, they feel appreciated. When you send a first-time buyer an offer for free shipping or a welcome gift, it gives them the nudge to become a customer and sets the stage for a good customer experience.