Segmentation is a marketing term that may sound complex, but it’s actually quite simple. In its simplest definition, segmentation helps you break down your customers into smaller groups in order to target each group effectively. Sounds strangely familiar?
It should. I bet you have heard about segmentation before and you’re thinking “I already know everything I need to about customer segmentation” I bet you are wrong
You can always learn something new. So have a read and see how a CDP can do wonders for your segmentation efforts.
Understanding your customers is crucial to the success of any brand. What you need to do here is:
Once you’ve collected data about your customers, you’ll want to create segments. Segments allow you to organize your customers by common characteristics, which makes it easier for you to communicate with them more effectively.
Segmentation can be done on many dimensions: demographics, psychographics, behavior, and geography are some of the most common.
A demographic segmentation could look at age, gender, or marital status. A psychographic segmentation might focus a bit deeper on personality traits and lifestyle habits such as hobbies and interests. Geographic segmentation groups contacts based on where they live or work (such as country or city). A behavioral segmentation could include purchase history, job title, or industry — whatever fits your business best!
It’s important to keep in mind that audiences are unique and often have multiple characteristics in common with different audience segments depending on how narrowly they’re defined. You may want to compare customers across several different dimensions simultaneously when narrowing down segments for marketing campaigns (for example all males between the ages of 40 and 49 who purchased at least one bicycle product within the last 12 months).
Segmentation can help you achieve the following:
Now that you know how to segment your customers, it’s time to explain why all that effort was worth it. Let’s start by saying that even if you only have a few hundred customers, there’s no way one marketing approach is going to work for everyone. So instead of wasting time, resources, and money on ineffective campaigns, focus all your efforts on your best customers and watch the results roll in!
The primary purpose of customer segmentation is to understand your customers better. This helps you create the most relevant content to increase engagement, which will lead to more efficient marketing and happier customers.
Segmentation allows you to target your marketing efforts, so you can make sure your content is always relevant to each customer. It also helps you find your best customers by understanding what makes them buy from you (and not a competitor). This will help deepen brand loyalty and help you build relationships with these key buyers.
Finally, segmenting the data helps clarify trends in the buying habits of your customers. This will help you understand the needs of your customers better and allow you to plan for future changes that may impact their spending behavior.
Talking about data, one way of having data that is useful for segmentation is through a Customer Data Platform.
It simply comes down to having the ability to use speed and flexibility to use your data in a meaningful way.
Let’s say you want to test one segment against another one and see which ones drive the best results. A CDP can do all that for you within one framework that allows for automatic data flow. This means you will have real-time insights into which segment is better for a particular campaign.
You can use this knowledge to gain an understanding of which customers are converting fastest. Or which ones are converting more reliably. You can even look to impact things like revenue, loyalty, and customer lifetime value.
With a CDP you can draw on all your information to create segments with better precision. Instead of relying on siloed data. You will have access to a full overview of your customers, and understand them on a deeper level. We call this a unified view, and it allows you to create segmentation that actually is based on valuable metrics and factors.
The CDP means you no longer have to hunt through multiple software providers, documents, and processes. It’s all done in one place. Ready for you to take action and create better results.
If you want to know more about how to leverage your data to make your segmentation better, book a demo with a Custimy expert and learn more today.