In Telligence

How to segment leads and customers to provide better experiences

Whether the majority of your organization’s marketing is digital or print, segmentation plays a critical role in converting leads to customers and ensuring that you retain them. Segmentation involves subdividing your customers or leads into smaller groups that are similar in key ways. If you are new to segmentation, or if you are looking to refine your use of this technique, these three questions and their answers can serve as a roadmap to providing better experiences for your contacts.

Why is customer and lead segmentation important?

Each person on Earth is different, but it is very unlikely that you will advertise on an individual basis. Though technology is beginning to offer ways to target the individual, a more effective strategy is to segment your customers and leads into smaller groups of similar people. This allows you to serve and properly message all those individuals who share behaviors, geographical location, lifestyles, etc. Segmentation can provide you with economies of scale, enabling you to best apply your marketing and R&D resources.

Understanding your target audience is very important when segmenting customers or leads. Consider this scenario—you own a business that produces rugged sports watches with built-in GPS, heart rate monitoring, and many other features. You will likely wish to market your watch at events like triathlons and in sports magazines, rather than on blogs for new mothers.

If you were to delve deeper, you could segment your current and potential customers into different categories. One high-level segmentation effort that may come to mind involves the intensity spectrum, with extreme athletes on one end, and casual exercisers on the other. There are many other categories within this spectrum that can also be defined. Once you identify the specific categories that are central to your strategy, you can pinpoint the marketing and retention activities that resonate most for each segment.

Analyzing each segment will also help you decide where to most heavily focus your attentions. One framework for analyzing segments is known as RFM: recency, frequency, and monetary. How recent was the segment’s last engagement or purchase with you? How frequently does the segment buy or engage with you? What is the average dollar purchase? By segmenting your customers, you may be able to identify the opportunities where you should be investing the most effort and resources into future marketing and customer retention initiatives.

Nivea is another example. The company utilized customer segmentation to better understand how different groups (adult females, adult males, and children via parents’ purchases) thought about and used sunscreen. One new product that resulted from their segmentation efforts was a spray-on lotion that was easier to apply.

How should I segment my customers and leads?

As previously mentioned, behavior, geographical location, and lifestyle are all ways to segment people. This is not an exhaustive list, and the categories are not mutually exclusive. To identify your ideal segments, begin by collecting data. Your data may include an analysis of retail store or website traffic, as well as customer profiles, customer surveys, and purchase history.

What patterns exist? You may uncover segments that you expected, or ones that you did not. Perhaps many of your most active customers live in or near metropolitan areas. Maybe your female leads can be divided into two age groups. Next, pinpoint each segment’s behaviors and beliefs, mindsets, and preferences. Once you decide which segments are worth pursuing, you can determine the relevant channels and messaging to reach them.

How can I leverage technology to offer some personalization?

Chances are your business has a website. If you would like to build personalization into your campaigns, consider capitalizing on technology to customize the information you display in your marketing and on your webpages. A simple example of segmenting website traffic is producing different advertisements that target certain segments, and that take those customers or leads to a webpage crafted specifically for that audience. You might display an advertisement on Facebook, and direct those users to landing page #1. On LinkedIn, you might run a different style of advertisement, and direct those users to landing page #2.

Customer and lead segmentation that is grounded in data is the first step toward providing your current and future clients with an improved experience. While it may not be possible to shape marketing messages on a wholly individual level, personalizing ads, emails, newsletters, and the like for smaller, segmented groups moves us closer to that ideal.

(Source: Forbes)

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