Be it in the context of multi-channel marketing, customer segmentation is one of the most important but underlooked aspects of digital marketing strategy.
What is Customer Segmentation?
Dividing your customers into small groups based on some criteria so that targeting such refined group of audiences gives you the maximum return on investment. Segmentation can be sometimes simple but better segmentation often is a difficult job. It should be done on the basis of company policies and must always target the most profitable customers.
4 Key Data Types to Segment Your Customers
I did noticed an excellent white paper from Experian that highlights the following 4 key data types to properly segment your customers:
Value – Determines the worth of the customer in monetary terms.
Demographics – These normally include age and gender.
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| Image Credit: Experian |
Behavior – This studies the behavior of the customer, like how often do they check their mails, tweet, like or comment.
Lifestyle – This includes determining the shopping pattern of the customer, the net income, the location etc.
Think Before You Get Overjoyed!
I have seen many marketers wrongly assume that their core customer base is actually the set of people that are converting profitably in an excel sheet. We marketers always have this tendency to manipulate reports to highlight the best achievements and while doing so, we end up segmenting our core customers into profitable and non-profitable. It is therefore important to adjust your criteria each time you play with data.
The Adobe Digital Marketing blog has an amazing comparison of proper customer segmentation. In the below diagram we can actually see that the marketers often get confused when it comes to define the actual audience generating the profits.
No matter whether it comes to choosing a particular digital marketing channel for a specified set of audience to choosing a specific banner to woo a specified set of customers, marketing efforts that are segmented tend to generate more faster and better results when compared to the ones that are just based on a hit and gain strategy.
Do you think customer segmentation in Digital Marketing has a greater role to play in 2015 and the years ahead? Please let me know in your comments below.
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