Customer Segmentation entails splitting your customers into subsets or groups in an attempt to ensure maximum efficiency, effective communication and good service. This marketing strategy enables you to design viable marketing plans to suit the different groups. With the customer segmentation strategy, you can articulate your marketing messages more effectively with different groups of customers. Using the same marketing strategy for all customers cannot produce desired results because a single method won't go down well with everyone. It will certainly produce mixed results-this is a case where it is effective and well received to some people and not with others.
This is How it Works
The need for businesses to adopt customer segmentation technique in their marketing approach cannot be overemphasised. This marketing tactic involves the intense use of specialised software tools for the collection and analysis of data relating to the different groups. With this, businesses come up with sundry strategies and plans that produce satisfying results for each unit. Interestingly, finding showed that this customer segmentation can hit an average of 760% increase in revenue, hence lending credence to its effectiveness.
What To Consider When Selecting a Customer Segmentation Tool?
This effective and time-tested marketing tool provides business owners with insights and vital information based on the reliable and relevant data they have gathered from the different groups. Moreover, how good, relevant and effective the data will be is dependent on the kind of tools used for data collection, organisation and analysis. However, it is very important to consider the following factors when deciding the kind of customer segmentation software to use.
You must ensure that your customer segmentation tools have the capacity to incorporate ideas from different sources. To earn yourself a rich database, you must able to integrate from a wide variety of sources. For example, the use of CRM solutions and user behaviour track tools provide you with abundant data as regards the customers' behaviour, trends and activities on your company website. This method of integration saves you from additional expenses and help you come up with effective business strategies based on the data gathered and analysed.
Data collection and analytical tools
The data collection and analysis tools you are considering must be able to:
- Facilitate easy access to data after gathering
- Present data in a clear and simple manner.
- Make data readable by other software.
The Need for Flexibility and Scalability
Customer Segmentation strategy helps to ensure flexibility and scalability in the scheme of things, needed to cater for the period when your business blossoms and shifts. Based on the data gathered and analysed from the different segments of your divided customer base, you can come up with flexible strategies that can address both the present and future needs of your business.
Reducing Huge Cost
The customer segmentation approach entails cost given the fact that it is an investment. As a matter of fact, it is costly for getting some data collection and analysis tools. The cheaper ones may be less efficient and effective. Besides cost, you should also consider what tools are ideal for the nature of your business.
The effectiveness of the customer segmentation strategy is largely dependent on the quality of understanding of its processes. Well, here are some areas that typically benefit from this marketing strategy:
Customer segmentation proves extremely useful for marketing. How? It makes tracking of customer behaviour and activity very easy and effective. Also, it fosters an easy access to vital information about each segment.
When it comes to user engagement, consumer segmentation proves greatly helpful. Grouping here is based on the level of customers' engagement, reaction and response on your website, emails and social media platforms. You might need to segment your customers based on their preference. Some are more active and responsive on your social media pages while others are not. Some spend more time on your website and others don't. Given this, you might need to reduce the number of emails you send to certain customers and focus on the type of outreach that suits them.
The way your customers view the products on your website show the types of products that interest them. You can segment your customer's basis on the types of products they buy. With this, you can also make valid predictions of sales. You can set up a system that automatically reminds the customers that create a shopping cart and closes them via emails in order to re-engage them. Thus, segmentation here is based on the pattern of customers' behaviour and preference.
Customer segmentation is also useful for targeting. Segmented data helps to facilitate effective targeted campaigns. Instead of sending one worded, impersonal to all your customers, you can come up with different custom-made messages intended to suit and appeal to each segment. This implies that each segment is provided with its own relevant and peculiar message.
With respect to the data you have gathered and analysed, you can use it to make predictions. The past behaviour and inclinations of your customers can be employed to make predictions about the likely response and response of your customers to your new campaign