5 ways to segment customers
Customer segmentation is a successful marketing tool when implemented correctly. Selecting segments and placing your customers must be done with precision. Here are 5 ways to tackle this vital task:
1. Demographics. Divide your customers into demographic groups. Consumers primarily purchase product based on needs and wants that are related to where they live, how old they are, their gender and their level of education. Too many brands wait until the point of transaction to turn anonymous site visitors into known connections, or rely on inaccurate third-party data for demographic insights. Collecting basic information at site entry can go a long way in developing customer relationships and more effectively segmenting your user base.
Gender: It may seem obvious, but keeping gender in mind when segmenting campaigns can have a significant impact on results and save you from wasting campaign dollars.
Birthday: Who doesn’t like to be remembered on their birthday? You already know of companies that keep track of your birth and send you best wishes—and if they’re ambitious, a coupon for free stuff.
Language: Language is the backbone of effective communication, but many brands overlook the opportunity to collect data around their customers’ preferred languages and segment their audiences accordingly.
Location: Separate clients based on location, whether it's a small neighborhood or a whole country. Marketing client segments would be influenced by factors such as population density and climate. Thanks to the smartphone, marketers are now able to influence consumers’ real-time decisions by reaching them on-the-go.
2. Behavior. Sort different types of behavior into groups. Not only does this take standard of living into account, but also purchasing and usage trends. Actions speak louder than words – and demographics. This age-old adage rings true for marketers, especially when consumer actions can be tied directly to purchases and other KPIs. Businesses that successfully segment users based on behaviors are able to more effectively nurture customers at different stages in the purchase funnel. Segment each contact by identifying product purchasing histories. Divide them into groups depending on which products they use, how often and how they use each product.
If you’re a B2B or B2C company with multiple product lines, segmentation could be a powerful tool for you. Chances are, prospects and potential customers are more interested in one of your products than the others. Once you’ve determined their interest (perhaps if they request a demo, visit pages on your site for a certain product, do a search for your product, view a pricing page, or make a purchase), place them on a list specific to that particular product. That way, you can send them the most relevant information for their needs, and may even be able to upsell them on another product later.
Online users that actively and consistently engage by taking actions like leaving comments or writing reviews should be recognized and rewarded as brand advocates.
Brands can grow consumer relationships and repeat conversions by sending their existing customer base thank you notes, exclusive discounts and personalized add-ons. Existing customers can be further segmented, rewarded and nurtured based on frequency, number and volume of purchases.
3. Benefit groups. This segment considers the ways in which a product is beneficial to the customer. The more benefits a product has, the more places and ways an advertiser can place the product. As a result, the marketing efforts for 1 product will gain a better response than a single position in the market.
4. Social Data. Social networks house an incredible wealth of consumer data, which is consistently updated in real-time as users login and engage with their connections. By allowing visitors to your site or app to verify their identities using existing social accounts, your brand can request access to specific social data points that can be used to more strategically segment your audience:
Interests: Insight into consumers’ favorite brands, sports, TV shows and more enables you to reach consumers with highly relevant and influential messaging.
Friends/Followers: A customer’s number of friends or followers across a given social network can be used to identify and nurture her as a potential brand advocate.
Education: Not only is education a helpful factor in determining economic standing, but it also makes it possible for brands to customize campaigns and content based on consumers’ alma maters – a strategy that can be leveraged by sports retailers, non-profit organizations, ticket vendors and more.
Relationship Status: Relationships are indicative of life stages that can be used to reach the right audience with the right message at the right time.
5. Value. Create segments that are valuable enough to market. You don't want to direct marketing efforts toward a low-volume customer segment that is not worth the effort. Consider the customer count or the dollar value that the customer brings when calculating the value of a segment. If the value is not worthy of the marketing efforts, then don't consider the segment.
h/t: A hat tip to these articles, which we’ve used to compile this list on customer segmentation: