What is segmentation
Segmentation is a process in which your customers or group of customers (and potential ones) are divided into categories based on a set of common characteristics, to better manage and target this audience based on your business in order to make optimal decisions.
The audience can be categorized according to:
- Demographic characteristics (age, gender, marital status, etc.)
- Geographical characteristics (where they live and work)
- Psychographic characteristics (social interests and lifestyle)
- Behavioural characteristics (consumption habits, etc.)
You can use all these different factors to divide your customer base into categories and create different campaigns to reach each audience group. For example, if you own a chain of bookstores and want to run a campaign for your new store in Thessaloniki, you could target all your customers who live nearby. On the other hand, if you are running a back-to-school promotion, the main feature you should consider first will be customers who have families and children.
By grouping your customers based on their common characteristics, you will have the opportunity to better understand their needs and desires. You will be able to understand what it is that satisfies them while interacting with your business and visa verse in order to improve. Through this assessment, you can understand how your customers want to be approached in order to adapt your actions to the appropriate channels.
Segmentation can help you answer key questions, such as:
- Which type of customers brings your business the most profit?
- Which type of customers show the most interaction and brand loyalty?
By strategically using the information gathered with the use of a segmentation tool, you can prioritize specific consumer groups and focus your marketing efforts on them. By designing targeted campaigns, you increase their effectiveness and deliverability.
How segmentation can benefit your business
1. Improves customer engagement
Customer engagement is one of the most important objectives in marketing strategy as it reveals the extent of their interaction with the business. Customer engagement data is usually collected from websites, corporate social media, and various blogs as well as purchase history and are important indicators in the segmentation process.
Maintaining effective communication and the resonance that personalized campaigns have with your customers can lead to enhanced engagement, greater loyalty and retention, and ultimately higher chances of conversions and sales.
Try to entice your customers by providing incentives that meet their desires, such as membership in a rewards program, promotions, free shipping, or exclusive offers.
2. Target the right audience
Segmentation will help you divide your customers (and potential customers) into the ones that are uninterested or inactive and those that are engaged consumers. This way, you'll identify customers who are actively and consistently interacting with your business so you can target them with compelling content or exclusive offers.
When the common characteristics of your most loyal customers are identified, you can improve your customers' behavior and ensure that you are targeting consumers who share these characteristics. As long as you attract audiences that fit your business requirements, you will increase customer satisfaction level and as a result, the right audience will stay with you as long as your product or service continues to meet their needs.
By categorizing your customers and understanding what the most effective way is to approach each of them gives you an opportunity to convert indifferent or less engaged customers into active ones. When you have a better understanding of your inactive subscribers you can create customer re-engagement campaigns either by providing appealing offers tailored to their specific needs or get feedback to improve your performance.
3. Make marketing more effective
Improve the overall customer experience
A study conducted by HubSpot on business-customer interaction found that personalized communication was 202% more effective than a generic standardized customer approach.
Nowadays, it's more vital for businesses to ensure an exceptional customer experience. 80% of people consider the customer experience as important as a brand's services or products. Personalization can go a long way to ensuring you deliver an exceptional customer experience.
Speak their language
Once you start your audience segmentation process, you can create more effective marketing campaigns that align with each customer's profile. Generic campaigns often come with diminished results that can lead to a negative effect on potential customers. Personalized messaging can be considered as the best way to approach your audience and achieve better results at a lower cost. With segmentation, you can gain customers who will be more engaged with your services, increase the return on your marketing efforts, and enhance the value of each buyer.
Choose the right channels
How do your customers react when they receive a notification of a new product launch? Do they find your daily messages useful, or do they find them boring?
Marketing is a vital tool when talking about interacting and attracting customers for a business, but sometimes when it is not performed in the right way it can damage the brand image. With segmentation you can develop effective ways to communicate with different groups of customers depending on the channel they prefer to receive “communications”. Consider which channels are experiencing higher conversion rates and focus your efforts on them.
4. Discover new opportunities
By taking advantage of segmentation, you will never miss out on new trends and opportunities. By systematically tracking your customers' habits, you will be able to detect changes in their preferences, whether it's about your products or services or the channels they prefer to interact with. You can easily gain an edge over the competition and be first when talking about changes in the market.
Recognize customer preferences to create new products or services that will appeal the specific groups or improve the existing ones. By developing products or services that cover all the wants and needs of your audience, you can increase sales, customer satisfaction, and a strong brand presence in the marketplace.
Unlock the unlimited possibilities of segmentation with Apifon's features and create personalized campaigns that your subscribers will like!