How does segmentation work?
Most people’s inboxes are filled with spam, junk mail, and promotions that they immediately delete because they aren’t relevant to them. If your content provides a more personalized experience for the person who receives it, the chances of them opening your message and grabbing their attention become much higher.
Customer segmentation helps personalize the customer experience, which leads to greater satisfaction. This helps reap big benefits for you and your company.
How to create a customer segmentation strategy
When looking to build meaningful customer segmentation that helps you deliver more pointed, personalized service you’ll need to set about doing several things. First, and most obviously, you’ll need to identify who your customers are. This means collecting demographic information, conducting trend and behavioral analysis related to purchase histories, and identifying their pain points – particularly the ones you’re best suited to solve.
From there, you’ll want to divide those customer demographics into groups called customer personas. You’ll use these personas as archetypes to articulate needs and connect your product to those needs. Once you’ve established customer personas, you can evaluate and prioritize your best segments to develop specific marketing, sales, and support strategies that highlight your strengths and more effectively serve your customers.
The importance of customer segmentation analysis
Customer segmentation analysis consists of in-depth evaluations intended to arrive at a clearer understanding of target customer demographics. This kind of analysis helps companies optimize and enhance everything from marketing campaigns to sales, support, and product placement, along with other business activities.
There are several types or categories of customer segmentation analysis:
The importance of customer segmentation analysis comes down to two things: determining the future value of a given customer profile which helps businesses discern their ideal customer profile, and continuously optimizing strategies and services to retain existing customers and maximize lifetime value.
Choosing the right customer segmentation tool
Customer segmentation tools collect, analyze, and integrate data to provide a unified picture of your leads, customers, and provide other valuable business insights.
Choosing the right customer segmentation tool is crucial for your success in sales, marketing, and even customer support. But what should you consider first when picking the perfect customer segmentation tool?
These are the main components you’ll want to look for when searching for the right customer segmentation tool:
Do all CRMs include customer segmentation software?
Yes, but to varying degrees and levels of sophistication.
The key to a successful customer segmentation strategy is the CRM that you use. Your CRM should be able to easily sort out all your customers into different categories for you. It should also seamlessly connect data from other systems to provide a complete customer profile.
According to research firm Forrester Consulting, 59% of company decision-makers identified the lack of communication between the CRM and other systems as a problem. This makes segmentation difficult.
The CRM you use should be able to provide a reliable contact management system, various types of data fields, a sales cycle tracker, a unified view of your customers, analytic tools and reports, and more.
Using customer segmentation makes it possible to get as close as you can to speaking directly to a customer and making them feel as if you know their unique pain points, goals, and values that matter to them specifically.
What does your CRM need to offer?
The key to a successful customer segmentation strategy is the CRM that you use. Your CRM should be able to easily sort out all your customers into different categories for you. It should also seamlessly connect data from other systems to provide a complete customer profile.
According to research firm Forrester Consulting, 59% of company decision-makers identified the lack of communication between the CRM and other systems as a problem. This makes segmentation difficult.
The CRM you use should be able to provide a reliable contact management system, various types of data fields, a sales cycle tracker, a unified view of your customers, analytic tools and reports, and more.
Using customer segmentation makes it possible to get as close as you can to speaking directly to a customer and making them feel as if you know their unique pain points, goals, and values that matter to them specifically.
5 Ways to Segment Customers
This is a popular and efficient way to narrow down your targeted audience. There are several demographics to consider when creating custom segments.
Location is an important factor to use when communicating with your customers. Are you selling a specific service or product only in certain areas? Creating a customer segment by location is a must in this case.
Education level is also another useful demographic. Education level can help determine whether or not someone would consider using your product or service, especially if what you offer is complex.
Age is another demographic that you can target with your marketing efforts. Maybe one of your products or services usually attracts people in their mid-thirties, and another product is usually for those aged 70+.
Gender is also a way you can sort out your customer base. Use your CRM to create a new marketing automation flow for an email campaign that promotes your latest women’s summer clothing sale by excluding your male customer base. Very easy!
This category is a good one with many ways to be broken down. Open rates are an ideal way to send great follow-up emails.
Let’s say the last campaign you sent out resulted in 300 customers opening your email. Of those 300 customers, 155 opened your email more than once. Maybe they need a little bit of extra encouragement! Segment these folks into another category and amp up the value of your product or service in a follow-up email to them.
Another way to segment your customer base is through past purchase history. What kind of products do your customers tend to consistently buy? How long ago was their last major purchase? Is there a certain time of year they start looking to buy?
This is all good information to have when deciding on who to send your next marketing campaign to and more importantly, how to create it.
This is a great way to identify your high-value customers who always purchase from you. They are most likely to engage with your marketing campaigns and tell their like-minded friends about your product.
A great segmentation strategy to use is to understand the way a customer engages with your website or social media ads. Did they read and share your blog about top cybersecurity measures? How long did they spend on a product’s page?
This information is gold. You can create a campaign targeting a segment of customers who all interacted similarly on your website and increase the chances of more closed sales.
Understanding which buying stage your customer is in is valuable information to have. Your CRM should be able to track where each customer is in the sales cycle. Segment customers through buying stages such as Ready to Buy, Prospecting, Presentation, or any other stage that your company uses in its CRM.
You can provide the right amount of pressure towards each group through your marketing efforts this way. The way you speak to a customer who is still speaking with other decision-makers and the way you speak to a customer who is a new prospect is very different.
It is pretty easy to improve your current lead generation and conversion strategies with the simple and quick method of customer segmentation. Make sure to use all of the benefits and features your CRM offers so that you can take advantage of the data it stores for you.
Don’t waste time sending or rewriting mass emails over and over again because your open rates refuse to budge. Sending the right message to the right people can bring you better results, satisfied customers, and more closed sales.
