Customer segmentation and personalization go hand in hand for marketers today.
Success with the former (segmenting individuals in your database ecosystem) leads to success with the latter (more opportunities for personalized and one-to-one marketing).
Many brands have segmentation marketing strategies today. And many CMOs pour marketing spend into personalization, based on distinct segments their teams build.
And yet, despite the strong ROI from target market segmentation strategies, many companies don’t have technology that can efficiently ‘group’ their contacts.
In turn, they can’t truly understand them or market effectively as they move through their unique customer journeys.
In short, customer segmentation is a giant piece of the marketing puzzle that can help companies of all kinds — from retailers and manufacturers to publishers— as it helps them:
- Identify buying and browsing trends among their customers and leads
- Capitalize on those patterns with targeted messaging to high-value groups
- Grow their customer base and improve customer retention over time
With that in mind, let’s explore some customer segmentation examples.
Specifically, let’s dive into how grouping your top prospects and most profitable customers based on various factors (purchase patterns, household demographics, etc.) can improve your most important metrics and unlock even more marketing ROI.
What is customer segmentation?
The basic customer segmentation definition is this: the process of grouping customers with common characteristics, attributes, and information to enable better marketing: from target campaigns to lifecycle orchestration. Some of the most popular types include:
- Demographic segmentation: You can divide your target market into smaller groups based on age, marital status, income, gender, and other demographic data.
- Geographic segmentation: Moreover, you can segment individuals in your database environment based on their location: city, county, state, region, or country.
- Behavioral segmentation: This is one of the more popular (and proven) approaches, as it factors in real-time interests and preferences for prospects and customers.
(Psychographic segmentation is another common approach you could implement. For the sake of this blog post, though, we’ll focus on segment-building based on these traits).
In BlueConic, our customers select the customer attributes (called profile properties) they want to set specific conditions for so they can create unique segments in minutes:
Profile properties range from basic (personally identifiably information integrated from a database, like a CRM, into BlueConic) to complex (hyper-specific customer actions or traits):
- Gender, name, email address, location, phone number, language, family size
- Browser name, browser version, device brand, device version
- Job title, job focus, company, company size, company industry (more applicable to B2B)
- City, ZIP code, county, state, region, country, and continent codes
- Page views, content downloads, demo requests, newsletter signups
- Behavioral profile properties featuring scores based on activity
Our customers use these profile properties along with group properties: household, company, or account. This allows them to easily build segments based on automatically updated profile info for prospects and buyers with the same grouping IDs in BlueConic.
Determining which customer segments to build depends on your business and what you want to learn about your audience.
The ultimate goal is to use these attributes to build segments that reveal customers’ behavior: how, when, and where they interact with you and what compels them to buy.
Customer segmentation and martech
Technology has advanced to the point that advanced solutions, like our CDP, enable easy segment creation and modeling a cinch for even the most non-technical of marketers.
What does this mean for you?
In short, if you’re not a tech-savvy marketer, but you still understand the distinct benefits of data-driven approaches, you can master segmentation-based marketing and, in turn, advance your business strategy, marketing metrics, and bottom line at large.
Customer segmentation examples
With that cleared up, here are some specific customer segmentation examples (and we mean really specific) you can build in BlueConic in minutes, not hours or days.
These examples may not apply to your products and services whatsoever. But we just want to give you an idea of what’s possible with audience-based segmentation today.
Example #1: Online retailer trying to reengage shoppers
With a customer data platform like ours, though, an e-tailer facing this problem could identify segments who left one or more items in their carts over a given period and develop a reengagement plan to entice individuals to complete purchasing a product.
Types of customer segmentation models this company could build:
- Basic: Prospects who added an item to a cart without purchasing
- Intermediate: Prospects who added an item to a cart in the last week without buying
- Advanced: Prospects from a particular city or state who added an item to a cart in the last week without buying and visited five or more website pages
Example #2: News publication focused on subscriptions
Many publications today are (rightfully) focused on building revenue through digital subscriptions. Embracing other revenue models is now a must to grow.
A newspaper or magazine intent on growing their bottom line through subscriptions could define segments of customers who have the potential to churn (i.e., not renew).
Similarly, they could pinpoint subscribers who signed up for free trials but have not purchased long-term plans or even leads who maxed out metered paywall windows.
A few specific market-based segmentation models this company could build:
- Basic: Paying subscribers whose subscriptions will end in the next 30 days
- Intermediate: Paying subscribers whose subscriptions will end in the next 30 days and have visited your website at least 10 times
- Advanced: Paying subscribers whose subscriptions will end in the next 30 days, have visited your website at least 10 times in the past week, and landed on a “renew” page
Example #3: DMO aiming to convert interested travelers
Let’s say you’re a destination marketing organization that wants prospective vacationers to finally book their hotel and travel accommodations via your website.
You could build segments that bucket users who checked out a certain number and type of reservation pages (lodging, flights, train, etc.) during a certain period.
With this customer data in hand, you could retarget individuals with deals to the destinations of interest to them and travel arrangements for those trips elsewhere online.
Three kinds of customer segmentation models for this company:
- Basic: Leads who visited booking pages without buying
- Intermediate: Leads who visited booking pages for a specific city without buying
- Advanced: Leads who visited booking pages for a specific city at least 3 times without buying and who have reserved lodging and travel with the DMO before
The point here is there are countless (innumerable, really) ways to segment your customers.
The key to success with segmentation marketing today is to test early and often and constantly evaluate the effectiveness of your bucketing and messaging to those individuals.
Eventually, you’ll learn which segments are worth developing (e.g., ones that provide beneficial customer insights and lead to conversions) and which aren’t fruitful.
Analyzing (and improving) your customer segmentation strategy over time
Once you’ve gotten going with segmentation and used the approach to bolster your marketing campaigns and real-time messaging, you can discover key customer trends — ones that will tell you if your clustering efforts are improving your digital marketing metrics.
Routine customer segmentation analysis can help you unearth eye-opening patterns about customers’ behavior. This, in turn, can inform how you market to them.
You may even notice nuances with your segmentation strategy that would’ve remained unknown without categorizing your customers into various distinct groups.
For instance, you may discover:
- Smaller segments grew considerably over time or large segments diminished in size: This could be a case of dynamic profiling at work: the automatic updating of customers’ profiles based on actions they take (or don’t take) with your marketing messaging. In other words, as customers’ activity with your brand change (increase or decrease), they may enter or fall out of certain segments.
- Certain segments respond better to one type of marketing communication than other kinds: You could have the same drip campaign set up for multiple segments and find only one actually engages with your emails. It happens — and simply means you ought to refine your messaging approach for the buckets that aren’t helping your customer acquisition and retention numbers.
- Directing segments to specific product pages doesn’t lead to more purchases: Sending segments to pages of interest, like for products they’ve investigated before, via targeted emails and ads is certainly ideal. But A/B testing what you promote to segments is also ideal to you see if your hypothesis is correct (i.e., if they do, in fact, want to learn more about or buy a particular product).
As with the types of customer segments you can build, there are just as many insights you can potentially glean from the marketing efforts you implement for those segments.
And all without relying on IT or marketing ops. (Pretty great, right?)
Another benefit? Your brand’s sales team, product development department, customer support reps, and other groups across your business can benefit from access to segment-oriented insights to enhance their day-to-day work as well.
(And, if you’re a B2B marketer, segments can ensure better marketing-sales alignment.)
Segmentation marketing: Best realized with a leading customer data platform
Your customer segmentation models — at least when run with the ideal tech, like a CDP — are something you can operate entirely on your own (i.e., without tech assistance).
At the end of the day, your customer segmentation is something you control exclusively. It’s not something you have to wait for IT or data science to handle for you.
How many other facets of your data-driven marketing strategy can you say that about?
As long as you have the right customer segmentation software, you’re capable of gaining invaluable insights into your customers’ behavior and marketing to them in real time.
Request a demo of BlueConic’s pure-play CDP today to discover customer segmentation examples and learn you can leverage our multi-dimensional segmentation capabilities.