Apr 23, 2018
Customer Segmentation & Targeting - A Guide
by Digital Marketing Institute
Marketing often draws on the concepts of segmentation, targeting and positioning (STP) in order to understand and direct marketing activities. And while this classic triple-threat combination is useful in a wide array of marketing activities, it’s important to note that user segmentation and market segmentation are applied in somewhat different ways in the digital customer journey than the traditional journey.
Marketers are always trying to convey the appropriate message to the right group, but in digital marketing, it’s more difficult to assess buyer behaviour and understand their journey and therefore it’s harder to segment your audience and target your message.
Here we’ll discuss the importance of segmentation and targeting in the digital sphere as well as offer a few tips and tools to get you going on the right track.
What is the Buyer Persona?
You’ve probably heard the term “buyer persona” floating around in business and marketing circles and may have wondered what it was. A buyer persona is a description of your ideal customer. Creating a few different buyer personas can help you understand your audience better in order to target lead and sales strategies and segment your audience.
When creating a buyer persona template, you’ll want to essentially visualize whom the people are to most likely purchase your goods and services. Here are some questions to consider as you build some personas of your ideal customer:
- What do they do?
- How old are they?
- What are their hobbies?
- What is their salary?
- Where do they live?
- What are their short and long-term goals?
The point of this exercise is to understand different ways that you can approach them with a message that lets them know you can help them achieve what they want or need.
What is Audience Segmentation?
Audience segmentation is when you divide your audience into different groups based on various criteria, such as demographics and media use. Digital marketers segment audiences as key part of a targeted marketing strategy.
Audience segmentation is crucial in the digital sphere because consumers are more empowered than ever. Not only that, they are making purchasing decisions at a faster rate than ever before. So, the challenge for digital marketers is to understand how to catch them in the process of the buying decision – to do this, they need to do everything they can to understand the way their audience thinks and behaves.
If you’re wondering about where to start when it comes to audience segmentation, here are a few key areas to think about.
Past Purchasing Behaviour
You want to segment your previous buyers out from new buyers, as you will be engaging differently with different sets of people based on the relationships you have already built. To this end, your segments can be differentiated based on buying patterns and even the types of products they’re purchasing. The key will be to anticipate their future needs so that you can show them what they need before they even really realize it.
Key Social Channels
Understanding how and where people are consuming your content can go a long way towards how you market your goods and services to a different audience. It can tell you about the types of things they prefer as well as how they interact with their friends. There are also plenty of ways you can use your social channels to target, so the two go hand-in-hand in various ways when you are working on a strategy.
Psychographic / Lifestyle Segmentation
Sometimes people segment their audience according to particular traits, cultural values, or lifestyles. These can also be related to current events. This kind of segmentation can be difficult to pinpoint because it’s not always in the form of concrete information like geographic segmentation or age, which are clear and concrete sets of data. It may be more about values, preferences or lifestyle factors. Psychographics requires that marketers dig a little deeper. To this end, things like Facebook polls and quizzes can work wonders.
Targeting
Once you’ve segmented your audience into the appropriate groups, you’ll then look into the best ways to focus on the different groups and catch their attention via marketing campaigns. You’re going to be building this based on their demographic characteristics – and their demographics and buyer persona are going to give you clues about the types of things they value.
Once you’ve delivered effective messaging, you’re going to want to understand how to address and retain both the customers that have already engaged (for instance, through customer loyalty programs) as well as how to address the customers that didn’t follow through to make a purchase.
Retargeting
Understanding why people made the decision not to open an email or stay on your website can provide valuable clues. To this end, remarketing or retargeting techniques can help. Remarketing techniques usually use cookies to track your audiences and see what they’re doing once they’re off your site. The cookie helps to keep your targeted ads running to people who have already visited your site but have left.
Retargeting is best used as part of a broad-based strategy and is not appropriate for all sizes of business. Use it with both inbound and outbound content marketing strategies to help with conversions across multiple platforms. Note that you’ll need to understand what’s driving your traffic first before implementing retargeting programs – this isn’t a way to bring traffic.
All of this boils down to not only solid customer engagement in a real-time way, but basically data. Are your customers human beings that should be addressed this way? Absolutely. But they are also full of information that can help you to form and refine your strategy in order to move into better STP activities in the future.
TIP: Offer Unique Experiences
You can use social channels in various ways to offer customers unique experiences in order to build brand awareness and better engagement with specific initiatives and products. Engaging in real time can help you understand their buying habits and journey. So, when you’re offering them an interesting experience at different phases, you are able to find a greater depth of information and they can learn more about you too.
This can take the form of events, contests, discounts – whatever suits your brand story and offers something of value to the customer. Something as simple as a hashtag can actually work wonders when it comes to real-time interaction using social media.Red Bull’s #putacanonit is a great example of a hashtag campaign that was inspired by someone’s photo.
TIP: Useful Tools
There are a number of tools out there on the web and many content marketing tools will have segmentation and targeting features built in. Here are a few multipurpose as well as specific tools you may want to test out if you don’t have anything that’s working well for you yet.
- Marketo and Mail Chimp are email automation systems have built-in setups that help you to segment audiences.
- Google Tag Manager allows users to develop their own rules to integrate with specific tags and web services. You might want to have a bit of a web developing knowledge to use this one and it can be used in more complex ways than some of the generalized tools.
- Activators allow you to import your non-digital audience information (for instance, information you might collect at events) and the like you can use activators (like this one from Umbel) to help you understand and segment data.
- Facebook’s Custom Audiences tool is a simple way to target your Facebook ads via emails. You just export emails into Facebook and create a customer list based on your preferred characteristics.
Final Thoughts
The more personalized your digital marketing schemes are, the better you will be able to engage with customers. These days there’s more and more technology coming out (think chatbots and automated self-serve kiosks) that offer businesses the opportunity to engage at new levels of personalization.
Automation and robots can work well towards making things more efficient, but the most important way to build brand awareness and understand your customers is of course by engaging in real-time as often as possible.
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