I'm in love with the shape of you.
But what shape do your customers come in, and how do you show them love?
By now, you're probably already aware that segmentation allows you to deliver better and more accurate marketing messages to your customers. In other words, you'll get better results from your marketing if you can find clever ways to divide your customers into the most finely-tuned groupings possible. In fact, we believe that the closer you can get to one-to-one messaging, the better.
But how do you find the right segmentation for your customer base? At Draw, we use three main techniques, each with its own benefits: segmentation by demographic information, segmentation by monitored behaviour, and segmentation based on detailed personas. Each has its own benefits and drawbacks.
Demographics are quantifiable, verifiable facts about your customers: their age, height, or gender, for example. Demographics segmentation is in many ways the most straightforward option, in part because it's usually relatively easy to gather the relevant information by simply asking your customers. It's straightforward and usually unintrusive.
Your customers will already have an idea of what information they feel comfortable giving out free (usually name, gender and email address), and the things they'll tell you if they have the right value exchange (things like preferences, clothing sizes or information on their location).
Clothing is one obvious area which demographic segmentation is great - and in many ways necessary. After all, your new range of high heels are probably more suited to your female audience. It's not just clothing - the approach lends itself to retail in general.
Behavioural segmentation looks at how people interact with a brand. Here things get a little more complex - while you can usually just ask your customers for demographic information, customers' reports of their own behaviour are less reliable. As a result, it's often more accurate to track their behaviour directly. This opens up two questions before you can do anything: 1)What do I want to track? and 2) How do I track it?
There is no hard and fast method when it comes to deciding what to track; it depends on your product and your audience. It's tricky, so you may not get it right straight away. A test and learn approach is often best: trial your messaging, review the results then repeat with a different behavioural aspect in mind. You'll soon see what get results and what doesn't.
Email marketing can be a great tool for this kind of process. Most ESPs (email service providers) will allow you to track email metrics, opens and clicks from which you can gauge how engaged customers are with your mailings. From this information, you can create some segments very quickly:
- Very engaged - your job with these customers is to keep them warm and encourage advocacy from them.
- Engage occasionally - look at their behaviour to find patterns in their engagement. What makes them open and click? Do more of the things that make them engage, and less of the things that they don't engage with (but be warned: this can take some work).
- Not engaged - these people must have signed up to your base for a reason, but that reason may no longer be relevant. Either find a way to re-engage them, or cleanse them.
You can learn much more through finding out what your audience are engaging with on a day to day basis, and even more if behaviour on-site can be tracked too. While this offers a wealth of information, it also throws up two problems: 1) How do we track all this and sort it?, and 2) How do we create enough variation in our content to cater for the many different segments that this will throw up? The latter is an important question for your content teams, and requires careful thought about the kinds of content you're producing. In response to the former question, meanwhile, there are 3 possible answers: dynamic content, only choosing the most meaningful segments or persona.
Instead of worrying about every little detail, you can look at creating personas - hypothetical profiles which cover a range of behavioural or demographic factors. That's not to say that you won't often find huge groups of customers with very similar profiles and behaviours, but you will find that if you set up a persona correctly, you'll be able to set your base easily. Using clothing as an example again, a brand that attracts customers with similar demographic characteristics, but those people could be split by price sensitivity: those who buy the brand when it's on special offer.
Of these three options, the right approach entirely depends on your product and your company - but it's always worth bearing in mind the alternative strategies available if your current segmentation techniques aren't working. Try looking at your base through these 3 lenses - it might throw up some interesting ideas for new segmentation projects. Focus on what you think your segments could be even if you're not ready yet - this can work as a development brief for your systems going forward.
To see how we helped Stonegate Pubs segment their data, see here.