Now more than ever before, humans are connected to technology. As a result, we are constantly fed with an influx of content and information. Naturally, we are learning how to be more selective with the content we spend time reading. The modern customer not only wants, but also expects marketing campaigns to feel like they are directly targeted to their own wants and needs.
Companies must now find ways to reconnect with consumers on various devices and platforms so consumers feel more connected to their business. This involves targeted marketing, which relies heavily on research and data gathered from your customers so your company can better understand how they operate and behave. Let’s chat about four best practices for contact database segmentation to improve your marketing lists.
1. Loyal Customers
There are many different ways to slice and dice your database, though breaking your contacts into niche groups of similar people is a great place to begin. Start by leveraging the wealth of information already available on your most loyal customers. Look for attributes such as general demographic data:
- Company Size
- Job Title
Which patterns and qualities are common by most of your loyal customer profiles? Start to build basic contact lists for each attribute and then begin layering data points to uncover simple trends, such as industries where your product is most popular. Maybe you will notice that the sports and outdoors industry spends three times more money with your business than the others. This will tell you that it’s critically important to keep these customers engaged.
Focus on the industry’s challenges or needs, and tailor your messaging into serving these loyal customers. Odds are that you would more effectively attract more of these types of customers who will most likely stay loyal and continue spending money on your business.
2. Market Segmentation
Next, let’s discuss the basic pillars of market segmentation to determine whether or not a segment is actually valid as well as truly worth your time and investment.
This segment can be used in two different ways. First, your customer segments should be identifiable as a whole. Do you have enough data on any given contact? This means no information has been left unanswered in regard to a given segment.
Second, can you place a customer into a specific segment, given all of the known information about them? For example, customer X is identifiable because of age, an occupation as a student, and an interest in technology; this means he should fall into the “Millennial Marcus” persona.
Another market segment is either the total amount of customers or the size of your database. It probably isn’t profitable to spend your time and effort creating marketing campaigns for a segment of five individuals. Database size is especially relevant for small businesses or startups, because these organizations' marketing budgets are typically limited.
Your marketing segments need to remain relatively stable over a given timeframe to be worth your valuable time and effort. For example, say your company makes childcare products and a segment of your contacts has been labeled as “new moms.” It’s rather safe to assume that the vast majority of these customers will remain moms for the a good majority of their lives. Knowing this information, you can be confident that these segments will continue to provide value for years to come.
Now that you have defined your segments, it’s time to get to work. Identify something actionable that you will do with each segment. There’s no sense in putting all of this work and time into determining a segment that doesn’t align with your company services. You will need to set goals and targets and put together an actionable plan for each segment identified.
3. Customer Communication
Try to understand both qualitative and quantitative data from interactions and other communication touch points in your customer lifecycle. Are leads or contacts interested in certain topics over others? Do certain contacts visit your website more often on a weekly, monthly, or yearly basis? How often do they purchase from you?
Studying these behaviors can help you identify customer roadblocks for your product or service. This will help your organization see where to make enhancements as well as helping you smooth out the customer experience by removing those stumbling blocks. It’s always helpful to provide a place on your website to answer questions and ask for customer feedback. This data can feed directly into your customer segments.
4. Customer Cycles
Tracking purchase behaviors and patterns is a great method for database segmentation. For example, a ski resort might have upticks of customer engagement during the winter season. Finding purchase behaviors and patterns in your customer cycles can help you identify when they’re most likely to buy again. Trends can be seasonal or very predictable based on events such as holidays or quarterly budgets.
Knowing these behaviors will help you cater your marketing campaigns toward facilitation and improving retention. Start by identifying associated events or behaviors such as these:
- Buying Frequency
- Change in Buying Behavior
- Lifecycle Stage
- Event Attendance
Overall, it’s important to avoid distraction by all of the various data points when determining which segments to create. Spend most of your time and attention with the top 20 percent of customers. Use your data and segments to focus your energy on retention efforts, in order to maximize your impact and keep the right customers coming back for more.
What are your favorite ways to segment your contact database? Share your ideas in the comments below!
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