In marketing, there’s an old adage that explains why programs or strategies fail. It’s simple, but spot on: “It wasn’t a bad strategy, it was a bad execution”. In loyalty and relationship marketing, good executions come down to connecting the unique aspects of a communications plan to the unique elements of your target customer, or the simple recipe for relevance. When you’ve got a large customer base of hundreds of thousands or millions, this challenge becomes very difficult, if not impossible. Enter segmentation.
Among the many analytical tools that can be used to improve marketing, segmentation provides marketers with a solution that optimizes the communications, offers and positioning that contributes to making a communication relevant and thus much more effective. The promise (and potential) of relevant dialogue and effective relationship marketing depends on managing a one-to-one relationship on the scale of millions.
Segmentation, clustering, personas and other classification labels are the rage in this world of big data. The reality is that any of these can be very effective at all levels of marketing. What we’ve found successful with our clients over the years is a segmentation solution that is built using a combination of behavioral or transactional data, descriptive data (like demographic, attitudinal and/or firmographic attributes) and even sampled research data. These attributes provide valuable insights into what customers think in addition to how they buy and who they are.
Seem like a lot of work or very complex? It’s not. Fortunately today, most marketing tools (email marketing, marketing automation, CRM, etc.) used to drive engagement provide some level of segmentation. As marketer’s cut their teeth on connecting strategy to tactics through segmentation, the demands of these systems (and, frankly, their effectiveness) will only grow.
As you look at new or existing marketing programs (especially those focused on your best customers) make sure that segmentation is one of the key building blocks of the strategy and an actionable component of your tactics. If you continue to question the role of segmentation, start observing how companies such as American Express, Amazon, Delta Airlines and Zappos are marketing to you… it’s all segment driven. Can you tell a difference?
If you need help in understanding how segmentation (or any analytics) can improve your marketing capabilities and make them more relevant, let’s start a dialogue.