Connecting with your clients on a deeper level
When it comes to segmentation of your customer information, you are only as capable as your data. If you only have limited customer data or are not able to effectively analyze the data points you do have, then your segmentation will be limited and ineffective. Becoming savvy with your customer segments requires analyzing all your data points, including: transactional, behavioral, demographic, geographical, social and more. In order to most effectively target customers, realize up-sell and cross-sell opportunities, and improve retention, leveraging the most impactful (and meaningful) data helps maximize revenue and enhance customer loyalty. Collecting diverse personal data not only allows you to better serve current customer habits, it also allows you to discover unmet needs and deliver better products, services and experiences to new customers. This effectively enables you to map and re-map the customer journey as needed. Thus, it’s clear that segmentation is no longer just a good idea, it’s an absolute necessity for your marketing strategy.
Digital marketing strategies are becoming more and more nuanced as consumers get savvier about advertisements, tracking, data collection and usage, privacy, and more. Engagement via more personal content is paramount, but brands still must be cautious on how and how often they interact. Bombarding your client base with too much content, yet too little personalization, is a sure way to lose engagement; which ultimately negatively affects revenue and loyalty. This simple truth has been only made more poignant during the Covid-19 pandemic and subsequent lockdowns. The recent progression of personalized segmentation that has allowed marketers to target smaller and more specific audiences on a deeper and more emotional level has been the biggest benefit to brand loyalty and client retention during the pandemic. This “new normal” only further solidifies the need to align your messaging with your client’s habits. Understanding your customers – their similarities, their differences – is one of the most fundamental and important steps in quantifying the customers’ relationship with your product and company.
“Marketing must evolve as an exchange of value between the business, looking to prosper, and the customers, looking to benefit. As an industry, we can only achieve this by putting the customer at the heart of everything we do. Only then will businesses be able to prosperously grow to be enjoyed, prized and ultimately sustained.”
Tim Bond, Head of Insight at Data Marketing Association
Segmenting your audience lets you choose who you’re connecting with at any given time. Messages going to current customers can show related products they might be interested in, or to review their latest purchase, while ad creatives to potential customers can focus on conversion. This enhanced marketing strategy enables a brand to communicate more intimately with individual consumers, rather than trying to share it with everyone at the same time. Ultimately, a more personal “conversation” helps clients feel more engaged with your brand as you are addressing individuals on a more thoughtful and emotional level.
Additional Benefits of segmentation
Segmentation has additional benefits other than just making your message more personal. It can also turn your audiences into test groups. By creating test groups and control groups, you can test your messaging, creatives and promotions more empirically, rather than trying multiple ads after another at random. This will help you optimize each campaign, and each variable therein, to make your marketing more effective and avoid the dreaded “spray and pray” techniques that so many boutique brands use.
Determining which demographics to use to create test groups has some obvious categories: age, gender, income, geography, purchasing history etc. This data is often easily extracted from basic information provided at the initial transaction, but more detailed and useful data can be garnered through various types of engagement. Examples could be a series of short questions within an email or a simple survey sent to existing clients to learn more about their likes, dislikes, desires and expectations. No matter the format, the goal is always the same: learn more and align with their lifestyle to better appeal to your client holistically.
Pyschographic segmentation
If your brand truly wants to delve deeply into learning about and exploring what personal factors influence their clients purchases via appealing to their habits, test groups can be set up to determine behavioral enablers. The goal is to provide more robust consumer profiles which, in turn, allows your brand to better address the wants and needs of specific customers as opposed to a broader market. This type of marketing, called psychographic segmentation, is a highly valuable marketing asset that reveals greater insights into a range of client habits. It paints a more comprehensive picture of your client personas which can then be utilized in messaging and media.
Psychographic segmentation creates demographics by activities, interests, opinions, personality, social class, and lifestyle. In essence, it humanizes the data. By uncovering the key traits of those most likely to buy products or services, brands can adjust their features and messaging to better align with their clients needs.
There are some limiting factors to this type of segmentation however. Psychographic segmentation can be harder to realize than other types of market segmentation, such as behavioral and demographic, because it requires more detailed participation in surveys, which requires time and personal information from your clients. In reality, even coming up with the types of questions to ask can be a challenge, but there are resources and case studies available to help (ie: using Likert Scales as a suitable way of determining consumer values and beliefs).
Regardless of the challenge, the value of this technique is proven. By understanding what drives your clients decisions in more aspects of their personal lives, brands are better able to understand how to position themselves to affect purchasing decisions. This provides valuable insight into your target client’s behaviors that other forms of segmentation cannot unlock.
The more you know
The more a brand knows about it’s clients, the better it can anticipate and exceed their expectations. Knowledge is everything when it comes to appealing to someone emotionally. In today’s environment, the consumer is incredibly savvy and can learn about a brand with a few key strokes so data goes both ways. Therefore, trust and respect will always be paramount in not just creating a loyal client base, but for cultivating and evolving more relationships. Gone are the days of blind brand loyalty. So as clients demand consistency, responsibility and value from brands, the opportunity to create raving fans presents itself by learning as much as you can about your customer so you can evolve your messaging and product along with them. The maxim of marketing is: know thy customer. Segmentation provides the insight.
