Segmentation: Knowing Your Customers
How most companies do their segmentation is wrong. Built on best-guesses, and a focus on business needs, classic segmentation often does little to impact a customer's experience. Segmentation should start with the customer-- let your existing customers tell you what they like, and what they don't. Listen to feedback to make your digital marketing program transformative.
What is a Segment?
Segments are "buckets" of your customers. Most frequently used CRM segments are based on activity with a brand. Buy something recently? You're an active customer. Open an email? You're engaged.
Segments can be built for a number of reasons beyond just these basic groups. Testing a new concept with only part of your customer file makes a lot of sense. Customers becoming less-frequent customers? Try changing up the contact strategy with them. Customer only ever shop one type of product? Focus on that product, or introduce new ones.
Types of Segments
Control segments either receive no message at all, or they receive the "Business As Usual" version without the test variables. Control segments are important to help you measure the effectiveness of your campaigns.
Affinity segments are based on a customer's purchase history. Let's say you're a restaurant owner. Looking through your CRM data, you see some customers who are very loyal, but almost never dine-in. If you are in need of additional dine-in patrons, it might be worthwhile offering something to this segment that often orders to-go. Like magic, talking to people who love your food, and know what to expect. Fewer kitchen complaints, waitstaff headaches, and comped food.
Engagement segments are based on a customer's activity with your brand. Open your messages frequently? Engaged. Work with your business often? Active. Too often in CRM systems, data can become outdated. See a customer who is very Active, but almost never touches your messages? Maybe the address is wrong, or out of date.
The Holy Grail: Perpetual Self-Segmentation
Ultimately, your CRM system should be built in such a way to allow customers to self segment. You know customers are going to fall into all sorts of different segments along their journey-- and you know what you want to say to them at each step of that journey.
Building a system that changes the topic and tone to match the customer's preferences, purchasing stage, and historical activity will not only make a satisfying experience for your customers. It will make your marketing easier to drive, more responsive, and less expensive. Targeting the right customers at the right time.
Want to know more about your customers? Do you want to reach them more effectively, and reduce the strain of one-off marketing campaigns?