The Many Pros of Multi-Dimensional Segmentation

Segmentation|10 Minute Read

The Many Pros of Multi-Dimensional Segmentation

Customer segmentation is still time- and labor-intensive for many companies today.

Why? Because their customer data sits in silos. As a result, these brands are forced to either invest substantial amounts of money in external agencies or involve skilled internal analysts and/or data scientists to make sense of their disparate customer data.

Regardless of the specific individual or team charged with developing segments based on the hundreds of thousands (or, in some cases, millions) of data points these organizations have stored in their database ecosystem, one thing is abundantly clear:

Relying on dated approaches like this and legacy technologies leads to data latency, inaccurate segmentation, and operational inefficiencies across the business — including and especially in marketing.

Business leaders and decision-makers have invested in a lot in technology over the years to facilitate their segmentation efforts. Yet some still haven’t been able to get data when and where they need it to build a segmentation strategy that drives their organizations forward.

As tech has gotten more advanced and customers’ expectations have grown, enabling more sophisticated and streamlined segmentation has become crucial.

Enter multi-dimensional segmentation and a pure-play customer data platform (CDP), both of which can play a pivotal role in improving your brand’s customer engagement strategy.

customer segmentation

Multi-dimensional segmentation: Building rich segments in under two minutes

First, let’s define multi-dimensional segmentation:

It’s the ability to build segments using a variety of data, whether it is definitional (e.g. demographic, geographic, or consent), or synthetic (e.g. engagement scores, customer lifetime value, or transactions).

It’s also one of four core capabilities of pure-play customer data platforms — all of which help companies scale, better understand and engage with their customers, adapt and transform their businesses, and, ultimately, accelerate their growth:

  • 1) Unified, persistent customer profiles: To benefit from the core features of a pure-play CDP, you first need a single customer view in the form of a unified profile. Prospect and customer data from various systems and channels live in continuously and consistently updated profiles that are accessible to the rest of your technology ecosystem.
  • 2) Customer lifecycle orchestration: With lifecycle orchestration, every marketing interaction is an explicit response to where individuals are on their customer journey. It’s an evolved approach to static, outbound marketing campaigns that often rely on data from one channel or segments updated on a 24-hour cadence, rather than in real time.
  • 3) Predictive modeling and analytics: Scores from predictive models update in customer profiles in real time. This allows you to capitalize on changes in customer behavior and ensure you’re always putting relevant info in front of a customer. Profiles associated with specific segments can also be sent to analytics platforms for further analysis and to track the performance of and marketing tactics applied to those segments over time.
  • 4) Multi-dimensional segmentation: A business-user-friendly UI let’s marketers, analysts, and other teams and professionals build dynamic, multi-dimensional segments that update in real time. And no coding skills are necessary. Segments are also dynamic. That means customers fall in and out of them, as defined by your criteria, in real time. You can build segments in two minutes and apply them across your entire tech ecosystem.

That’s right: Grouping people in your database based on any combination of attributes, behaviors, consent, preferences, interests, or other criteria you define can be done in two minutes or less and is no longer a task that requires manual list-pulls and handoffs.

customer segmentation

Put another way?

Having agencies or analytics teams spend a lot of time — days or weeks — creating segments for marketing and other teams is a thing of the past with a pure-play CDP.

With complete, constantly updated profiles, you can properly leverage multi-dimensional segmentation to increase operational efficiency across the business, reduce customer data latency, and test and iterate on campaigns, messaging, and other initiatives more quickly.

More specifically, a pure-play customer data platform:

  • Controls for consent: It enables business users to utilize ‘opted-in’ segments for specific objectives across systems and channels. For instance, they can send opted-in segments to advertising platforms for targeting and to business intelligence tools for analysis.
  • Automatically adds and removes individuals from segments: As customer attributes, behaviors, interests, and other ‘profile properties,’ as we call them in BlueConic, change over time, segments update dynamically. That means customer data platform users are always putting only the most relevant and timely messages in front of customers.
  • Factors in real-time customer scoring in segments: Scores like customer lifetime value (CLV) or propensity to buy/churn are generated in BlueConic’s AI Workbench, for instance — or can be brought in from another analytics solution to help companies capture a customer’s intent in the moment. Targeting individuals with a high engagement score that is four weeks old, for example, isn’t all that helpful to a marketer.
  • Syncs online and offline data: Companies know that customer experience accounts for all online and offline interactions. With a CDP that creates unified, persistent profiles, companies can feel confident that segments include all aspects of relevant customer data. For instance, they’ll know if someone bought in-store yesterday. The ability to handle online and offline data helps retail brands gain an always-accurate single customer view of all their ecommerce and brick-and-mortar shoppers.

Speaking of retail brands …

behavioral segmentation examples

How one retailer uses our CDP’s multi-dimensional segmentation functionality

Modern, growth-focused brands need tools that enable their teams to work quickly and efficiently, adapt on the fly as needed, and provide value and utility to business users.

But this efficiency and adaptability is impossible to achieve without a solution in which all first-party data is persistently stored and accessible business users to carry out their daily tasks — including multi-dimensional segment creation and analysis.

That’s one critical reason why one multi-billion-dollar, multi-brand retailer invested in BlueConic’s customer data platform.

The company understood our CDP was the ideal business technology to empower teams across its multitude of brands, to better connect with and ‘know’ their customer base.

One of its outdoor apparel brands realized a first-party database could save them thousands of dollars and weeks of time just by giving its analytics team segmentation capabilities:

  • Prior to investing in BlueConic, this company’s customer data was dependent on an external agency to create segments for them. Requesting segments from this agency for email campaigns took nearly a month and thousands of dollars per data-pull.
  • Not only did this costly dependency slow their team down, but it also watered down the efficacy of certain segmentation criteria, like behavioral and engagement scores. Receiving a segment of ‘highly engaged” customers isn’t as meaningful when that ‘engagement’ score was pulled four weeks ago as opposed to in real time.
  • It also had little-to-no insight regarding who they were emailing or if they had consumers’ consent. This put the business at risk for penalties associated with non-compliance with the California Consumer Privacy Act and other data privacy laws.
  • Delivering irrelevant, poorly timed messaging to individuals in its database led many customers and prospects to tune out — and opt out of — of its emails. A big problem, given the big role personalized marketing plays in the company’s success.

With BlueConic’s built-for-purpose, pure-play CDP, the brand can now build its own dynamic, multi-dimensional segments for personalized and individualized emails based on demographics, engagement, purchase history, product preferences, and other data points and send those segments to activation tools, like an email service provider, in 30 minutes.

Having intricate multi-dimensional segmentation capabilities in its hands, the company was able to test-run a new email engagement strategy that targeted lapsed customers.

From ideation to execution, this new segmentation strategy took them one week and came at no additional cost.

Giving your teams access to customer data and enabling them to use that data reduces their dependence on third parties and empowers them to put the ‘art’ back in marketing.

Without barriers to test and iterate on various marketing strategies, marketers can get back to their jobs without having to waste time, money, and efforts on process.

behavioral segmentation

‘Knowing’ customers with an advanced segmentation strategy — and a CDP

Building dynamically updated segments in a matter of minutes will save you time and money. But there is another big benefit of multi-dimensional segmentation for brands:

The ability to utilize your segments to make your customer engagement smarter

Implementing an advanced segmentation strategy requires a single view of the customer and unified profiles that can help teams across the business closely examine the attributes of those customers — regardless of where that data comes from.

A pure-play customer data platform can also help mid-sized and large-scale businesses alike target their customers more intelligently and better understand their audiences.

Belgian Cycling Factor Sr. Marketing Advisor Michel Lenaerts said it best regarding how his business uses BlueConic to elevate its segmentation efforts and better ‘know’ its customers:

“This is the first time ever that this company has a view of who their customer is. Through BlueConic, we built segments of high-end customers, and could locate them and sent bikes to shops nearby. Using this targeted approach, we sold enough bikes to pay back our BlueConic investment in a month.”

Whether you want to compare individuals who purchase products online versus those who buy solely at physical stores or compare attributes of customers who are likely to churn, a CDP can provide you and a number of employees across your company with the insights needed to better understand your customers — and have smarter engagements with them.

But identifying who not to market to is equally as important as pinpointing the prospects and customers to whom you should deliver bespoke experiences across marketing channels.

As BlueConic VP Marketing Michele Szabocsik told MarTech Advisor, though, this is a tall task if you lack a CDP in which you can build and refine your segmentation strategy:

“If you don’t have a handle on your first-party data, you can’t know enough about your customers to build segments for the purposes of marketing activation and suppression depending on the individual at that moment in time.”

Our CDP simplifies this task by enabling business users to suppress individuals from receiving marketing messaging if — by their own internally defined criteria and rules set in BlueConic — they’re deemed poor fits for campaigns or lifecycle messaging.

These rules can be tailored to your specific teams’ goals, and you can optimize your advertising spend by factoring in past customer engagement in segments, like:

  • Propensity to buy: Based on recent behaviors and engagement, you can identify segments to avoid sending promotional offers. For example, you could suppress deals for customers with low recency, frequency, and monetary value scores, since they’re unlikely to buy. Conversely, you could prevent deals from being sent to those who buy frequently and, therefore, likely don’t need discounts to be enticed to buy.
  • Recent transactions: BlueConic can help you reduce your targeted advertising spend waste. For instance, you can have individuals in certain segments automatically removed from a paid ad campaign, if they’ve purchased in the last week.

A pure-play CDP clearly has several benefits for companies of all kinds today.

One of the biggest, though, just so happens to be one that can save your company a lot of money, save your data scientists and analysts a lot of time, and help others across the organizations make better use of your first-party data — an invaluable resource you now need to utilize intelligently to realize your desired business growth.

Read our case study on BlueConic customer Belgian Cycling Factory to learn how the brand built its multi-dimensional segmentation strategy with our pure-play CDP.

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