How to Use Marketing Segmentation to Design Individually Tailored Experiences

If you’re a marketer, you’ve no doubt heard the rallying cry behind personalization.

It’s almost impossible to drown out. With more brands putting a premium on experiences, we’re seeing the dying embers of mass blast content and hello, {first name}, personalization. 

Consistent one-to-one interactions that sum up to a singularly great customer experience aren’t possible without marketing segmentation and acknowledging the complexity of designing experiences. 

Let’s explore why.

What is marketing segmentation? 

Remember when you were in grade school and learning about the animal kingdom? You’d see animals classified into different groups such as phyla, orders, genus, and families based on their shared characteristics. 

Scientists created these classifications to understand what animals have in common and how they’ve evolved. 

Marketing segmentation works a lot like the animal kingdom’s organizing logic. Instead of nine classifications, marketing segmentation has four key approaches to dividing brands’ target markets into smaller, defined groups.

  • Demographic segmentation is the most basic and generalized type of segmentation that divides people into groups based on their age, gender, income, ethnicity, location, or occupation.

For example, a stretch mark prevention cream may be more relevant to women aged 20-35 than men in the same age range. A marketer may choose to create a segment that includes women from that age group and build messaging and journeys for that specific segment.

  • Psychographic segmentation goes a level deeper than demographic segmentation and divides people into groups based on their attitudes, interests, lifestyles, and values. Psychographic segmentation gives marketers more profound insight into their users. It can help them create content and experiences that better reflect people belonging to a specific psychographic segment. 

Imagine you have consumers who are deeply concerned about their smartphone’s privacy features. Given the iPhone’s privacy-friendly features, they may be more likely to purchase this brand of phone.  

To take another example, users who flock to shiny, new gadgets are the early adopters. These types of consumers will give you an understanding of how your ads are performing. 

You can try different design aesthetics and copy with a clear view of their interests and lifestyles. Keeping track of early adopters’ interests beyond tech can help you create more impactful, emotional connections with the right message at the right time.

  • Behavioral segmentation divides customers based on what they do. Segments are created based on how users interact with a company and their steps toward a purchase decision. Patterns analyzed can include brand interactions, website activity, desktop or mobile app engagement, and loyalty. 

Let’s say you have a consumer who is an avid winter sports fan. They’ve downloaded your app and buy a new snowboard every year that costs between $600-800. 

Knowing that you can segment them for messaging before their yearly purchase and attempt to upsell them with boards above that range, or cross-sell to them with add-ons like bindings, cold weather gear, and lift tickets.  

  • Geographic segmentation divides people into groups based on where they live. Climate, zip codes, country, and urban, suburban, or rural categorizations influence how marketers put consumers into segments.

Imagine you have a short, sleeveless sundress you want to sell in spring, targeting summer shoppers. You could use a geofence to target women in warmer places within a few miles of a beach. You may also want to opt-out of targeting beaches in places where women cover their bodies. 

It comes down to your understanding of your customers and making sound judgment calls to avoid creating negative perceptions of your brand in a specific location. 

Let’s say you’re a sports brand, and you detect users entering or exiting from a stadium on a game day. You can predict users’ favorite teams and preferred sports and promote specific products or experiences to attendees on game days.

Or, imagine you’re a financial services firm and want to promote your new cloud-based accounting offering to business travelers. You can track users entering different airport zones and segment them to receive highly targeted and relevant messaging. 

Designing a Marketing Segmentation Strategy

Now that you know the different types of segmentation, let’s dig deeper into their benefits and how to develop your own marketing segmentation strategy. 

Getting Started with Marketing Segmentation

  1. Analyze your customers – the first step to coming up with segments is understanding your customers’ behavior. How can you do that? 
  2. Ask for feedback – send your customers surveys asking for their input. Take this strategy a step further by reaching out to customers whenever you update your product or service to keep them engaged in the process. 
  3. Talk to Sales – your salespeople know your customers and prospects on a deep level, interacting with them every day. Bring your sales team into the conversation and create segments aligned with who your customers are. 
  4. Dive deep into analytics – your customers spend a lot (or a little) time on your website. See where drop-offs occur, what pages are performing the best, and where users are giving you their personal information for gated assets to gain a clearer understanding of what’s working and what can be improved. 
  5. Pay attention to trends– do you see a product category that’s getting a lot of attention? If so, you may want to use your psychographic data to create a segment for that category. 
  6. Is your product positioning working? Assess your messaging around products and test to see if your value proposition resonates with your target audience before you design a fully-baked experience. 
  7. Are you helping the right people? Finding the right people who have the problem your product is solving is one of the keys to creating a successful marketing segment. When you match your solution with their problem, your message is more likely to be relevant. 
  8. Ready. Set. Launch. You’ve done the hard part; you’ve created your segments and are ready to put them to the test. Don’t underestimate the importance of A/B testing. Watch how segments react and tweak if the results aren’t matching up to industry benchmarks and predicted expectations. 

Marketing Segmentation and One-to-One Experiences 

Marketing segmentation teaches you invaluable lessons about your existing customers and gives you insight into where to grow and how to focus your marketing resources for optimal results. 

Imagine you’re a beloved ice cream brand with a cult-like following. The day is finally here, and you’re expanding your sales to a digital storefront. You’ve got the martech stack in place, you’re GDPR compliant, and your inventory tracking system is top of the line. 

Now it’s time to send messages, discounts, and announcements to your prospective customers, die-hard loyalists, and everyone in between. 

The more you know, the more relevant you can be. 

Now, how would your triple chocolate-loving customers feel if they got a discount on plain vanilla? 

Sure, some may be excited to try something new. Or they immediately think of a vanilla fan in their circle. 

Your brand will most likely get the “hey, they don’t really know me” reaction especially if the consumer has only ever bought chocolate products. A well-meaning message with a loyalty-building discount code may have the opposite effect, alienating customers and leaving a bad taste in their mouth. 

Marketing segmentation that takes an individualized experience-first approach analyzes customers’ demographic, psychographic, behavioral, and geographic data. They’d use those insights to craft relevant brand interactions, personalized messaging, and relevant recommendations, which would eventually culminate in an overall positive brand experience. 

Now, let’s take the example of the unfortunate chocolate lover receiving a vanilla lover’s discount. Instead, this time, the marketer has taken into account all the customers’ marketing segmentation data. 

Using marketing segmentation to craft delectable journeys

Not only will the chocolate aficionado see an email with their favorite triple chocolate ice cream, but they also land on your website and see a dynamic web banner that matches the email communication content and graphics.

marketing-segmentation-example

Next, AI matches them with other related chocolate products that fall within their affinities. For instance, if they’ve bought peanut butter products and you’ve released a limited-edition double chocolate peanut butter ice cream. Sounds perfectly irresistible, right?

Let’s say they bite. Then you know a little bit more about this consumer. You may now want to segment them into a chocolate and peanut butter affinity segment. As more time goes by and with more interactions on your website, mobile app, emails, and ads, you may find that this consumer also likes non-chocolate offerings with a nut base. 

You may also find that they buy two gallons at a specific time of the month, and you may notice that every year around their friends’ and families’ birthdays, they stock up on a particular flavor outside of their chocolate and nut-based affinities. 

push-notifications-for-marketing-segmentation

Knowing these timings and patterns, you can craft consistent and valuable journeys, full of positive brand interactions that create potent memories and brand loyalty—and that is the magic behind marketing segmentation.

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