January 14, 2019
Benefits of Customer Segmentation
As a marketer, one of your biggest challenges is to generate leads and drive conversions. This can often be a mammoth task, one that is easier said than done, especially if you work with large volumes of customer data sets across several entities. To make your job a lot easier, try using segmentation.
What is segmentation?
Segmentation is simply a subset of your overall customer data. Creating a segment involves grouping clusters of customers with similar characteristics and developing marketing activities (message, tone, and channels) accordingly. A segment can be based on demographic factors like age, gender, income, location, and actions such as purchasing behavior.
How segmentation can add value to your business
According to Salesforce, segmented marketing campaigns have been shown to generate an average revenue increase of 760%. Why? Because breaking down aggregate data into small clusters allows you to remove analytics clutter, saving you time when you need specific answers.
Segmentation also allows you to flesh out data which means that you are in a stronger position to easily identify trends or patterns. You can then plan your marketing objectives around these segments, personalizing your marketing messages to communicate with different groups of customers effectively, rather than adopting a "one size fits all" marketing approach.
Building segments on actions
If your goal is to increase website visits, you can use segmentation to see what sort of customers are visiting your website and how they are behaving. For example, you may discover that 80% of visitors to your website are females aged between 25-31 living in New York. Or that 70% of the users buying a particular product from your online store are college students living in San Francisco. Creating segments allows you to identify your core audience, allowing you to market to them accordingly, whether it be through a targeted Facebook ad or a Google Ads remarketing campaign (see example below).
Segmentation is also useful for shaping your marketing activities. You can use segmentation to see what pages are generating the most traffic, what PDF is being downloaded the most, what blog posts are attracting the greater number of clicks, and so on. You can then use this data to refine your future content strategy to better engage your users and increase the likelihood of conversion.
How do I get started?
A segmentation tool makes it easy for you to set up segments. The Google Analytics segmentation tool (known as Custom Segments) is commonly used for website analytics; it allows you to collect data such as page views, traffic sources and visitor data such as device and location by adding a snippet on your website.
Unfortunately, things get more difficult if you want to collect more in-depth information such as user attributes or if you want to track data from email marketing campaigns; a lot of complex coding is involved. A tool called Segment, however, makes things a lot easier for marketers who don’t have the time or patience to code.
Implementing Segment grants you access to many advanced Google Analytics features such as custom metrics and content groupings. More importantly, Segment provides a single API to track customer data across your website as well as your email software, allowing you to send the data to an SQL database or to a marketing automation software such as Autopilot. This means that you are able to monitor your segments at every stage of the customer journey and personalize your marketing based on real-life user events to drive engagement and conversion.