Customers are no more satisfied with what is being offered. They are defining the market and demanding what they need and marketers are working hard to deliver the same.
Every customer today has attained an individual identity and is no more a part of the crowd. Marketers have also accepted this fact with open arms.
It doesn’t come as a surprise that personalization today plays such a major role in the success of marketing campaigns.
“Statistics state that personalizing marketing communications can bring you 6X times more conversion than generic messages.”
On the on-set of personalization is segmentation. Discovering what the customer is looking for, what their preferences are, what are their choices, what are their likes/dislikes and many more of such attributes let the marketers gain an insight into the mind of customers and create messages that are tailored to their requirements.
This article will take you through the process of segmentation, how it has overcome its traditional ways and accepting modern ways to adapt to modern customer’s needs. Here you will also know the various kinds of segmentation marketers should choose as per their marketing strategy and how choosing the right marketing automation will make this process 10X more effective.
What is Segmentation?
Data segmentation is the process of dividing available customer data into finer segments that share some common wants and needs with one another. The process helps the marketers to identify, determine and target audience as per their various business needs.
It is also a tactical way to facilitate differentiated communication for each customer group so as to better address them and match their way of thinking.
It has been an effective strategy for creating a competitive advantage for firms, as they are able to align their business needs with customer needs in a more customized way, eventually creating a greater number of satisfied customers.
Challenges of Traditional Segmentation
Segmentation of customer base is nothing new as marketers have been following this practice to better understand and target their customers for a long time. However, their way of segmenting data has been mostly based on data segments like gender, age, gender, interests, geography, etc.
Defining customers on which part of the city or country they come from or which gender they belong to make any particular segment very vast, thus beating the whole purpose of classifying them. Needs of customers today have become dynamic and are no more restricted to societal restrictions.
“Marketing a food processor only to a bunch on housewives in Delhi might not prove as effective as it might targeting customer base that is customized as per behavioral data like students away from hometown; working professionals living alone; people who might have been browsing or clicking on food processor-based deals; so on.”
Types of Customer Segmentation
- Geographic Segmentation
One of the most traditional ways of dividing any customer base is their geographical area. According to this segmentation, firms may choose to target a specific country, city, or town to market their product/service. While this might not be a good online sale approach but for retailers, it helps them to create dominance over the certain geographical area through targeted marketing and advertising within that location. While selling online, this kind of segmentation can be useful in terms of certain products but typically it is more of a restriction than a privilege.
- Demographic Segmentation
Demographic segmentation is one of the oldest and most common types of segmentation practiced by marketers today. It basically divides the customer base on the basis of age, race, education, nationality, income, occupation, etc.
For example, it identifies girls as one segment and boys as another. While it may be ideal in differentiating on a wider level but when it comes to customizing communication on a personal level, it fails to deliver intimate data.
- Psychographic Segmentation
This is the most effective way of modern segmentation as it brings into consideration consumer attributes like emotions, perceptions, interests, beliefs, attitude and so. This method of segmentation might not have been possible earlier due to a limitation in variety or depth of customer data available but today with so many ways present to interact and connect with the audience, the available data is much more insightful. Such segmentation can help a great deal in customizing messaging in terms of visuals, channels, words, the tone of voice, etc.
- Behavioral Segmentation
This is also a modern method of segmentation used by dividing customers into groups based on their browsing pattern, preferences, use flow, etc. in relation to a product. Such events in reference to a user can be the time they opened your last email, the channel they use the most to see your communication, the products they viewed earlier, the kind of messaging they most respond to and so on. This is the most effective way to customize messaging that is conversion-savvy.
Evolution of Market Segmentation
As the audience and marketing platforms have evolved, so has the process of segmenting data. It’s no more just about gender or age. It has gone much more complex than that as customers today are no more defined by what they are but are defined by what they do. Stereotyping them based on where they come from or where they live don’t work for defining their profile anymore or for predicting their needs.
It is the era of micro-segmenting and so groups are getting smaller and intimate based on a customer’s attitude and behavior. The purpose of micro-segmenting is to cut through the clutter and directly engage the customer with more relevant messaging and choice of channel. This process of engaging a customer generates a desired response and increases the chances of conversion.
With endless touchpoints and data to process and target, segmentation has gone beyond the manual control. Not only is doing it manually too time-consuming and require a large number of resources but with so much data to process, manual means are no more effective in doing justice to the process.
The one big purpose that segmentation needs to meet today is tailoring communication as per individual consumers instead of subjecting them to generic communication. As a consumer’s behavior is dynamic, their segmentation also has to be real-time to match their needs.
Importance of Real-time Segmentation
Staying ahead of the customers in understanding their needs and providing them with customized solutions is what marketing today is all about. Real-time segmenting allows marketers to smoothen this process of decoding customer needs by making sense of customer behavior as soon as the event takes place. This allows the marketers to seize that window of opportunity where the customer is most likely to respond.
Real-time segmenting > real-time targeting > high rate of conversions
For example: In case of an online video streaming app, if a customer has finished watching the first season of a popular series, they are most likely to continue watching more if they are aware of the season 2 streaming at the same time. But, for some reason, they missed out on noticing the availability of next season and exits the app. In this case, this particular segment of the customer can be easily brought back to the app with an enticing push-app about the next season. But, if your segmentation process isn’t real-time and fails to identify and target this segment, then a good conversion opportunity is lost then and there.
Segmentation + Marketing Automation = WIN-WIN!
As we discussed above, manual or slow ways of segmenting data no more matches the demands of today’s marketing approach. The way automation speeds up the process of segmenting data while carefully and timely targeting those segments in an efficient and personalized way makes the whole idea behind segmentation a success.
Where segmentation helps identifies what channel a customer is coming from or what channel they prefer the most to get messages; marketing automation leverage on this information and send time-sensitive messages through the right channel in the right frequency.
How to choose the right marketing automation platform for your business?
We talked about how the combination of segmentation and marketing automation is perfect for making any marketing strategy way more effective. But, how do you decide which marketing automation platform is the perfect fit for your business?
Here are a few things you can consider –
For your marketing automation platform to deliver real-time segmentation, the first and foremost requirement is for it to be fast in processing data. By processing data in real time for every user, a marketing automation platform can assess potential leads and conversion opportunities and thus target them in a timely manner.
To be able to process such a huge amount of database from so many datapoints is a task that requires accuracy and efficiency. For a marketing automation platform to be able to perform this task, the process of going through this data has to be smooth and refined without any interruptions or roadblocks.
To stay one step ahead of everyone else and to give your marketing strategy an edge, it is essential that your marketing automation platform not only meets the ‘need of the hour’ but is also futuristic in vision. It should not only understand and act as per the behavior of customer now but also study their behavior to predict their future actions and provide them an experience that caters to their future needs too.
Customer Segmentation with Gamooga
Marketing automation platforms like Gamooga adheres to all the above parameters, allowing marketers to streamline their personalization & segmentation needs in a real-time manner. It facilitates marketers with a dynamic platform that create customized campaigns to ease-up the process for the end user.
The powerful automation platform of Gamooga processes millions of datapoints in milliseconds through real-time segmentation and targets customers according to their behavioral preferences faster than any other tool. Thus, making optimum use of an available database to make every user feel special.
Give your marketing segmentation the power of a strong Marketing Automation platform by scheduling a demo with us today.