Customer Segmentation Means Success for Modern Marketers
The concept of segmentation can often be misunderstood or confusing, as it is a word that comes with many uses. While it isn’t a new topic, it is garnering more and more interest from marketers looking to tackle it at different levels.
In a basic form, segmentation could be dividing an audience based on age, for example, while more complex segmentation might look at mixing purchase and engagement data. The most important thing for today’s marketers is to understand why they should employ it in their digital strategies, especially when it comes to email marketing.
What is segmentation?
People often confuse personalisation and segmentation, as they both share the role of using data to provide customers with more relevant content. Segmentation is the art of breaking up your database into groups of customers with similar (single or multiple) criteria. This criterion could be post code, gender, age or even a behaviour, such as when they made their latest purchase. Personalisation, on the other hand, is about tailoring content within a communication based on customer data, such as using their first name or displaying their postal address.
Driving relevance and revenue
By grouping customers into different segments, marketers can be much more flexible with their communications, delivering more engaging content to their most profitable customers. Delivering the right content, to the right person, at the right time greatly increases the likelihood of converting a sale.
In a world where consumers expect brands to understand them, marketers have no excuse not to use the information they have to deliver more appropriate and engaging experiences. Segmentation allows marketers to deliver more meaningful messages to groups of people based on the core characteristics and behaviours. Brands that consistently deliver high quality, more integrated and more relevant experiences put themselves in the best position of creating loyal customers.
Delivering more relevant content will naturally lead to a higher conversion rate, which in turn leads to more sales and greater revenue contribution – a priority for all modern marketers.
Increased business value
We’re all in agreement that the one size fits all model is outdated. Not only does it irritate customers, it also exasperates inefficiencies when sending to entire databases, especially when sections of that database are no longer responsive.
Reducing the frequency of send for your inactive customers will help keep costs down by improving the deliverability rates of emails to active customers and potentially improving brand perception for the less active ones.
It’s clear customer segmentation has an important role in the modern marketing mix. In order to speak to customers with relevancy, marketers need to segment them into pots based on behaviour or characteristics. Only then will it be possible to start working on more sophisticated ways of communicating effectively.