It is an important question, and one we ask frequently. It can be a simple question seeking information: “Why did you segment your list that way?” It can also be asked in a judgmental tone: “Why (on earth) did you segment your list that way?” Regardless of the tone of the question or any particular emphasis, asking the question is foundational to any successful digital marketing program.
The new demand of all customers and prospects is personalization. People want offers and marketing messages individualized specifically for them. It is no longer acceptable to lump everyone who has purchased a product from you into the same customer segment. It is not even acceptable to lump together everyone who has purchased the same product in a single segment. Rather, you must segment customers more specifically by such criteria as the problem or need that caused them to look for an answer or solution or by the platform or channel through which they searched for or found your company.
Once, it was sufficient to segment customers by the number of purchases they made from you or the number of different types of products they bought. The Internet, however, has changed customer expectations of their relationship with businesses.
Today, companies must know their customers and prospects on a deeper level. Your marketing team must know, not only that they bought from you, but also what they bought, and why they bought it. In fact, what and why are critical to both marketing message development and segmentation.
Let’s suppose for a moment that 300 people recently purchased your new product. The product helps people do three things more efficiently or effectively. One-third of the buyers chose your product because it met their need to do one thing better or faster. One-third chose your product because it met their need to do the second thing better or faster. One-third chose your product because it met their need to do the third thing better or faster. The three groups of product buyers have different needs.
You identify 3,000 prospective buyers. Each prospect shares a need with buyers in one of the three groups. You send the same marketing message to all of the prospects. Your message will appeal to only those prospects who share the need of the group of buyers you addressed in the message. The other prospects will not see how the product meets their needs.
If, on the other hand, you dig deeper into what you know about both the buyers and the prospects, you will be able to identify the common characteristics and behaviors of prospects that match each group of buyers. You can then create three variations on your marketing message that speak to each group of prospects. Clearly, this approach is likely to generate more product sales.
This is the first step in effectively segmenting your list of customers and prospects. You must then continue to gather and store data about customer/prospect behaviors and purchasing patterns. In time, you will find that economic changes, the emergence of new competitors, and other factors also influence purchases. This data must be added to your current knowledge in order to refine your segmentation and understand how new products will or will not meet emerging needs of your customer base.
At least in theory, if your segmentation is timely and accurate, and if you are engaging your customers and prospects in order to understand their needs and desires, you will be able to create personalized messages for sharply focused market segments. With the right information and the right segmentation, you will be able to develop marketing messages that address specific needs and desires with an explanation of how your products meet the customers’ personal needs.
The next time someone asks you, “Why did you segment your list that way?” you will be able to respond with an explanation of the needs and behaviors exclusive to each of your segments. By addressing each segment of your list directly and personally, your products will provide better solutions to customer needs and your sales will increase.