How to Create a Segmentation Strategy

Posted by Knight Stivender on Nov 7, 2016 4:09:50 PM
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We're often asked for advice in creating a segmentation strategy. Clients want help crafting and delivering marketing messages to various segments of customers and prospects in a way they know those segments will respond. We are happy to oblige!

But before working on a segmentation strategy, we recommend clients do some data analysis and customer profiling to ensure their assumptions are accurate about their various consumer groups.

Here's an infographic to explain the five steps to creating a segmentation strategy. 

Segmentation Strategy.png

Need more detail on these steps? Here ya go!

Step 1. Data analysis

We recommend starting a segmentation strategy (or any marketing campaign) by analyzing customer data to find out what your various customers look like. If your company has an in-house analytics team, they should be able to look at your organization's customer data and tell you when people purchase, how much they spend and on what service or product lines, how often they spend, etc.

Step 2: Demographics 

If you know your customers' mailing addresses or email addresses, you can take your customer file and work with a data marketing agency (like ours) to match it against other databases of demographics information. You'll be able to tell a lot about them at this point. Who are they and where do they live? What is their age? What is their affluence and wealth? What do they spend money on other than your own brand? Do they have children? What are their hobbies? What are their religious, political, and charitable ties? The larger and more up-to-date the database, the more robust your customer profiles will be. (Ours includes 200+ demographic details regarding 95% of the households in the United States; it's updated monthly.)

Step 3: Profiling

The combination of customer data analysis and demographics information will give you an accurate depiction of your customers. You can then use this groundwork to build profiles you know are based in data involving your customers as individual people with interesting, unique lives outside their interactions with your brand - in addition to their consumption of your brand.

Step 4: Segmentation

You will most certainly have more than one customer segment and you can use your profiling to decide how to best speak to them. Customer profiling can also help you prioritize them. For example: If you find that one particular segment is statistically most likely to become a customer, and that within your market you have lots of room to grow that segment, that's a great place to start with marketing efforts.

Step 5: Marketing

Depending on resources and budget, you can tailor marketing messages to each segment based on what your profiling has told you they prefer. Are they online during the day at office jobs? Are they on-the-go and more likely to respond to text messages? Are they older retirees who subscribe to the print newspaper? Marketing messages can be delivered and prioritized based on a smart segmentation strategy.

Can we help you with any of this? Give us a shout. 

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Topics: CRM, Data, segmentation, profiling