Segmenting in theory is a simple concept: group customers with similar demographic profiles, attitudes, purchasing patterns, buying behaviors or other attributes together to help understand them more thoroughly and market to them more effectively. There are countless ways to slice and dice your customer database and there is no one right way to do it. It all depends on your organization and the marketing goals you want to achieve.
Do I Really Need To Segment?
Yes! Even if you only offer one product or service (which is most likely not the case), your customers are not all the same. Think about your local pizza shop. Their customers include college students who want a late-night study break, frazzled working parents who swing by to pick up dinner for the family on their way home, and businesses who order in pizzas for working lunches or employee events. They all buy pizza, but what motivates each of them is very different. That’s why developing clearly defined buyer personas is an important part of the segmentation process.
Your Customers Are Not All The Same
Not only are your customers not all the same, they are at different points in the buying process with your company. Consider the local pizza shop again: you have those who have downloaded an online coupon or received the pizza shop’s mailer but haven’t yet been enticed to order; the customers who stop in 1-2 times per year; and those who are on a first-name basis with the staff and can simply order by saying “I’ll have the usual.” The same offer and message will not appeal to each of these customer groups the same. Further, each of these customer groups may prefer to be communicated with in different ways (yet another way to segment!).
But the most compelling reason to segment is that you most likely don’t have an unlimited marketing budget to work with. And if you’re taking a one-size-fits-all approach to your marketing efforts, you’re simply throwing money away. Segment your data, tailor your messages and offers accordingly and enjoy an increased return on your marketing investment.
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