How to Create an Online Marketing Segmentation Strategy
Richard receives an email for an offer to purchase 212 Sexy perfume for women. As you can guess, this product is not relevant to what Richard likes to use. Richard glances and immediately deletes the email. At this point he classifies the business as another company sending him “crap” in his inbox.
We see this all the time and it is a hard problem to solve. How do your profile your online customers? And how do we send them relevant marketing emails?
Segmentation is not a new concept. Marketing companies have been practicing segmenting their marketing efforts for years. Here are a few marketing segmentation strategies:
Demographic – Based on gender, age, marital status, education level and ethnicity.
Geographic – Based on geographical location of where your customer is located.
Behavioral – Based on intent, behavior, response to service or brand. This type of segmentation is used a lot online. Services are setup on a web site that are triggered by user behavior. These behaviors helps online companies to segment their audience.
Psychographic – Based on personality, lifestyle and social class.
Segmentation can be broken down to more segments if you wish. Example:
Customer Purchasing Cycle – Based on a purchasing stage, example: awareness, consideration and purchased.
You must ask yourself, how much segmentation do you want to do or really need? Meaning, how much work or resources do i want to invest in segmenting my customers? Imagine having to segment customers using 7-9 different segments. My suggestion is, keep it simple. Create 3 important segments. It can be any three to start off if you like. See if you can handle the work required to do this. Once you have a comfortable process down, you can then slowly scale to more segments.
The other mistake i see customers doing once they create different segments is applying the same marketing strategy to all of their segments. What is the purpose of executing the same marketing strategy on different segments? Make sure you create different marketing strategies for each respective segments. They should not be the same.
Theory is great, but how do i start? The first step is understanding your customer. Survey them. Another option is to use a great tool to give you insight on your visitors. Google analytics is great, but my favorite tool is Quantcast. Quantcast will analyze your visitor and give you incredible visibility to your visitors demographics. The best part, Quantcast is free.
Now that you have your demographics information down, you are ready to start planning your segmentation strategy. Remember, keep it simple:
1. Behavorial Segments – Monitor actions to generate personalized relevant content. Track their abandoned products and then remarket to them.
2. Purchasing habits – See what items customers are purchasing and remarket products that are similar.
Start with two segments and monitor improvements on your conversion. Once you get the process down, try to identify certain patterns and expand your segmentation strategy.