Why is Data Segmentation Key?
– Take a deep breath –
A lot of marketeers, often those with very little time prior to a campaign or time in general will usually fall victim to a lack of segmentation. Whilst seemingly for smaller businesses this could be mistakenly viewed as less important, it’s certainly important for all sizes of business. When it comes to larger brands, this is usually extremely important.
We often see this published in SiriusDecisions and Forrester
Lack of Data Segmentation – Impact?
- Poor open or click through rates
- High unsubscribes
- Data inaccuracy
- Negative reply behaviour… “why are you emailing me…!?”, “take me off your list!”
- Large bounce rates on landing pages or web pages,
We’ve all been there… What about poor credibility, is this really affordable?
What about renewals..? Upsell and cross sell – customer satisfaction and retention..? Segmentation on this type of data leads to easy and quick wins.
It’s useful to talk about the impact of a lack in market or data segmentation, it can show us the damage we could be doing to our brand or company image. this can be far more visible in our marketing metrics and KPIs, large page bounces, closed lost business etc. We could send a generic ‘catch all’ message and have our emails deleted instantly by large groups, or more to the point, it could show a novice marketing style to some very valuable prospective customers.
Would you want the same message going to your key accounts as your less important prospects?
Doesn’t sound too bad? Well it is, and here’s why!
These are the results of good segmentation
Data performance increase, higher conversion rates, more targeted messaging, less customer journey bounces, less data required to meet goals, increased credibility, ability to deploy marketing automation easier and more. Cross/upsell easier into existing customers or align to renewal dates, etc.
Lets look at fixing some of these points
Credibility – your company image is one of the most valuable parts to your business – fact. Word of mouth is one of the most successful sources of lead generation available to us. Create the right message to the right person and your proposition can make its way through a business faster than a wild fire. Not only that, you’ll be taken everywhere that prospect lands. Only IF you hit the right person with the right message of course. Sending the same message to a Junior manager and a Senior Director in the same team shows them you’re spam, sophisticated email solutions will pick up on this and auto quarantine your email without every getting to the destination.
Marketing automation can be used to take the prospective customer through a fantastic buying journey, if the segmentation is done right. If done wrong it throw hurdle after hurdle at the prospect if the segmentation is too generic or worse if the segmentation is wrong.
Reporting – Marketing reports, KPIs and performance metrics showing low MQL or SQL conversion rates with generalised segmentation. Traffic having high bounce rates mid journey, it really does impact the ROMI reports negatively when it’s typically easy enough to fix with some more targeted focus. Make those reports and dashboards shine with more targeted segmentation.
Targeting – if your targeting and segmentation is on point, you need on average less marketing data. On the flip side… you conversion ratio is higher, resulting in more leads and opportunities. It could mean better word of mouth leads when they share it with their peers.
Firmographics, Demographics, Psychographics and Behavioural – they’re all different. Each business, contact and group will have different buying behaviours, problems, styles and interests. You wouldn’t have the same message for your base solution/product as you would for your most expensive one, so we shouldn’t treat different people the same either. We need to communicate in their preferred method, to their seniority, their position and more. We don’t all have the same problems.
Not only does Market Segmentation help with pooling your data into buying groups, it also shows you what data is outside of your target audience! Do you cover IT support for a local region, great is there anything outside of that region that needs to be removed?
Now you know the impact… how do we fix it?
Lets be clear market segmentation can get very complicated in some cases. But, lets start with the basics.
Firmographics – Company size, industry, location, revenue, age etc. Each business will have differences here which are valuable to differentiate. For example a business with 50 employees may have two individuals in the buying cycle and can usually turn around a decision in hours or days. A firm of 5000 employees, may have 10+ in the buying centre for decision making which can take months to approve (e.g. a longer sales cycle or tender). Similarly to a high revenue organisation vs low revenue, etc. The most common segmentation here is the industry and size metrics.
Demographics – Job title, function, seniority, their buying persona, age, social status etc.
People are different, whilst we can categorise lots of them into smaller groups, we certainly need to treat them as they would like to be treated. An example of this could be an IT Director’s focus will be on budgets, solutions to help company growth, disaster recovery and performance. An Network Manager will be focused on the day to day operation and will often use the solutions themselves. The targeted message needs to reflect their individual pain points and give them a solution to their common problems. Segmentation by job function and seniority is the most common in this section.
We can go far into the human psyche, and predict responses to serve to a prospective customer on their journey at the right time like in marketing automation for example. So don’t be afraid to segment further!
Psychographics & Behavioural – Lifestyle, buying behaviour, morals, values, interests, concerns, purchase style etc. This is where marketing leaders separate from the pack, by understanding more about your buying centre (Champion, Influencer, Decision Maker, Budget Holder) you can target messages which are hyper focused to them specifically and give them the advantage in their role as well as their impact to the decision.
Linking the typical middle aged male to trending sports could be an example for the US Superbowl, UK premier league football in clever humour for a glimpse of your value proposition. It could be educational, personal development, prize draw, industry news, technology, fashion, achievements etc. Where does your audience typically consume the majority of their intent to buy information, is it video, email, podcast, forum, newsletter etc. Position yourself in the one most consumed by your audience.
Take a step back, look at your marketing data and map out a plan to target them in the way you KNOW they would like to be.
Marketing and selling is essentially putting the right message or solution in front of the right people, at the right time.
If you need some help with this, drop a note in to us.
Clive Penfold