Wednesday, 7 September 2016

Digital Marketing Segmentation | Why to segment?

Apple, slices, segments

There is absolutely no worse reason to segment than that everyone else is doing so. If you haven’t understood why segmentation is important for your business, then you probably are far, far away from the need for segmentation itself.

The simplistic rationale that all customers are different is not sufficient to warrant digital segmentation. You rather need to consider a number of thing to figure out for yourself if 1) your business is ready for segmentation and 2) whether you can realistically segment your customers and prospects?

They easiest way to do this is to start with defining your goals. The first thing about goal-setting is that it is entirely different for your customers and your prospects.

Customers
Your customers already know about you and probably communicate with you through digital channels. As a result you probably have a wealth of available information on their preferences, their behavior, habits etc. Good data sources would be website analytics, CRM data, POS data etc.

For existing users of your website, the goal could be to enhance the usability and ease-of-use of the website or other digital channels. Is the user experience simple enough? Is it effective at converting leads to customers? Are the calls-to-action compelling enough?

For existing customers, it could be enhancing customer experience or retention. This supposes that you are able to attract a greater share of wallet from your competitors for similar products or services.

Prospects
These are people who are likely to benefit from your product or service but as a marketer, you don’t have any primary sources of data about them. This is where you try and find about more about through access to external data sources. Some good places to start include syndicated data, third-party publisher data, market research data, government data etc.

Prospects who contribute to the growth of your business typically take the form of leads that you generate. These are individuals who have expressed an interest or inclination regarding your product or service and constitute those you know will benefit from it.

Prospects who contribute to product or service expansion are those whose needs are currently unmet by your product or service, but those you know would benefit from a differentiated one that you can offer in the future.

In another post, we will take a look at how you can strategically and tactically address your customers and prospects through digital segmentation.


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