I. What Is a Customer Segmentation Strategy?
Customer segmentation is the process of dividing your audience into groups based on common characteristics, behaviors, or interests. Segmenting your customer base allows you to send marketing messages designed to target customers based on their preferences.
Sending personalized content that speaks to consumers’ unique interests and behaviors is proven to increase engagement. A Mailchimp study found that segmented email campaigns had a 14.3% higher open rate and 101% higher click rate than generic, non-segmented campaigns.
Refining your market strategy over time is an excellent way to build a loyal customer base and find new and better ways of serving those customers for life. Your customer segmentation strategy can be a force multiplier that increases the ROI of your advertising, sales, and marketing campaigns.
“Smart” customer segments take a segmentation strategy one step further. Using traditional market segmentation, customers get divided into broad demographic groups like age, gender, income, and education level. Smart segments drill down into more specific commonalities like pain points, spending patterns, and online behavior.
II. Benefits of Customer Segmentation
Smart customer segmentation offers many advantages to savvy marketers. Smart customer segments enable you to:
- Create personalized marketing campaigns and communications — at scale.
- Gain a competitive advantage by making customers feel you know them better than your competitors do.
- Market one product or service to many kinds of customers. Trying to use one approach to appeal to everyone will result in appealing to no one.
- Maximize up-selling and cross-selling opportunities.
- Save time and money by automating workflows.
- Improve customer service efforts by sending targeted updates on special promotions, product recalls, and offers.
- Send marketing materials that reflect purchase history, reminding customers that you are in tune with their ever-changing interests.
III. 4 Types of Customer Segments
You can base customer segments on any rules and criteria you like. Identifying key commonalities helps divide customers into targetable groups.
There are four main categories of customer segments you can use to build your mobile marketing strategy:
1. Demographic Customer Segments (Who?)
Demographics are one of the most commonly used marketing segments. Demographic factors include:
- Marital status (single, married, divorced)
- Education level
- Life stage (retired, empty nester, student)
Examples of demographic segmenting:
- Marketing social services to retirees.
- Targeting college students for school loan assistance.
- Marketing adults-only vacation destinations to couples without children.
2. Geographic Customer Segments (Where?)
Geographic segments include grouping customers based on where they live:
- Location (city, state, zip, country)
- Location type (rural, suburban, urban)
Examples of geographic segmentation:
- Using smart geographic segments to create a filter for people located in the EU to ensure marketing campaigns are GDPR compliant.
- Using geographic segments to promote climate-specific products.
- Marketing a live event to people living within a certain radius of a venue.
3. Behavioral Customer Segments (How?)
Ecommerce businesses often use behavioral segmentation to target people based on web pages they’ve visited or products they’ve purchased. You can create automated workflows that trigger when a contact completes a specific action, such as:
- Downloading a white paper
- Signing up for a product demo
- Buying a product or service
Examples of behavioral segmenting:
- Sending a follow-up questionnaire after a white paper download.
- Sending purchase information after a customer requests a product demo.
- Suggesting complimentary items or a coupon after a customer purchases an item.
4. Psychographic Customer Segments (Why?)
Psychographic traits are one of the most personal customer segments and include factors like:
Examples of psychographic segmentation:
- Marketing workshops or materials to hobby enthusiasts.
- Promoting luxury cars or exclusive items to consumers in a high income bracket.
IV. How to Create Smart Customer Segments Today
When your customers know that you see them, understand them, and have the solution to their problems, they are more likely to keep coming back.
What better way to assure customers how important they are to you than to send them customized, targeted communications that speak to what they care about?
CM.com’s Customer Data Platform enables you to create effective customer segments by unifying data from all your online and offline sources. If you’ve ever had issues getting customer data from Point A to Point B, look no further.
As a vital part of our Mobile Marketing Cloud, our Customer Data Platform connects multiple data sources into one unified customer profile, giving you real-time insights into your customer's behavior. Create smart segments to group customers together by demographic, behavioral, or psychographic data to ensure your messages are being read and paid attention to.
Learn more about CM.com’s Mobile Marketing Cloud and unlock your data today! Schedule a demo to see our platform in action.