Tips for effective segmentation

Segmentation is an important marketing technique which involves targeting different groups of customers with different messages and offers. This is in contrast to simple ‘big blast’ campaigns, where the same message is sent out to every available contact. Make the most of segmentation with these simple tips:

1. Define your objectives. It’s important to start with a list of clear objectives, so begin by asking yourself what different types of customer behaviour you’d like to create more of: new signups, renewals, buying more products, buying different products, etc.? Ideally you’ll end up with a list of around 4-6 main objectives, each with a clear ‘action’ you’d like to persuade the customer to take.

2. Identify your variables. There’s little point deciding that you’d love to target customers with a high income, an interest in science, and with blue eyes, if you just don’t have that kind of information available. So, make a list of what’s known about your contacts, for example location (country, postal code), purchases (products, prices), recency (dates of signups, purchases), and so on. This will establish the key ‘variables’ you have to play with when defining customer segments.

3. Create your segments. Using these variables, you can now try to define an appropriate group of customers as targets for each of your objectives. For example, if you have an objective to sell more science materials to existing customers in the UK, you might create a segment of customers in the UK who are interested in science and who have previously bought from you. It’s important to create only a small number of segments (aim for less than 10), and to ensure they are not too small (not worth targeting), and also distinct enough to warrant a specific set of campaigns and messages.

4. Start communicating. Having identified your segments and objectives, you’re now in a position to begin sending appropriate, targeted messages to each group. (Note that this is more work than a single ‘big blast’ campaign, as there are now multiple offers and messages to manage.) It’s important to see each segment as an ongoing relationship, and establish a consistent style and tone of voice for each group over a series of messages, perhaps even assigning a different marketing manager to each segment.

5. Track the results. Recognise that you’re unlikely to get everything right first time, and try to see the entire process as a ‘work in progress’. Ensure proper tracking is in place, and monitor which segments and campaigns produce good results (and which don’t). Over time, you can then ensure that lessons are learnt, bringing improvements to the objectives, segment definitions, and communication styles you use.

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