Segmentation is not a new concept in marketing.
Smart marketers have long realized that a “one-size fits all” strategy geared towards attracting everyone… converts no one.
Sadly, that’s what a lot of online businesses are still doing. But throwing spaghetti on the wall to see which one sticks is not only grossly inefficient; it also annoys your potential customers, who are at the receiving end of frequent, irrelevant emails or social media posts.
That is not the kind of experience you want your online visitors to have. Instead, you want to provide them with optimized user experience that zeroes in on their specific needs, wants, and pain points.
Here, segmentation is key. By creating visitor or customer segments, you acknowledge the numerous differences across your audience. You can then refine your offers and messaging to appeal to a specific set of your online visitors.
Below are four ways you can segment your visitors and customers so you can create more effective online marketing campaigns:
Most marketers know about demographic attributes. It’s the most basic form of segmentation. The common criteria for demographic grouping are age, gender, income, education, race, religion, ethnicity, and family size.
Grouping your online visitors according to demographic profile can give you an idea of who your typical customer is. For instance, you can access demographics data for your website in Google Analytics to learn if majority of your audience are male or female, from a younger or older generation, or whether they come from high-income or low-income backgrounds.
Demographic information on your online visitors can clue you in on the kind of traffic you’re attracting and which sectors are actually converting. If your target market are women but discover that you’re also getting a lot of male traffic, then you can either adjust your upstream messages to appeal more to women or consider the men as an untapped market and create offers that are valuable to them.
The downside is that demographics alone can be broad. You should take into account that there are still significant differences across visitor demographics. Avoid making assumptions about your visitors and customers that aren’t supported by data.
There’s an adage in psychology that past behavior is a good marker of future behavior.
In a sense, a person’s behavior often follows a pattern and is predictable to some extent.
This has been used in the marketing sphere to separate consumers based on behavioral patterns. Here, prospects and customers are grouped according to their actions and responses to your campaigns or their use and knowledge of your products and services. The most common forms of behavioral segmentation are Buying on Occasions, Benefits Sought, Loyalty, and Usage.
Buying on Occasions
Your online visitors’ buying habits can drastically change during particular days, events or special occasions. Some of your visitors may not buy much during regular days but may splurge during birthdays, anniversaries, or the holidays. Occasion segmentation allows you to predict the influence of specific occasions on your customers and deliver timely offers and messages to encourage purchase.
People buy some products because of their perceived benefits. For instance, some individuals may want a smart watch for the ability to be instantly notified of their incoming calls and messages. Others however, may buy the same product for its fitness tracking abilities. Hence, you can segment your customers based on the value they’re seeking from your product or service and highlight these attributes in your marketing messages to them.
You can segment your online customers based on their loyalty to your brand, service, or product. It is more expensive to acquire new customers than to keep your existing ones so you must have offers devoted to your loyal customer base. For instance, you can highlight loyalty rewards and incentives in your marketing campaigns for frequent shoppers.
People have varying rates of consumption of certain products. Some will use a product more often than others, while others may not even use it at all. Usage segmentation groups customers according to their usage rates and habits. This helps you identify heavy, medium, and light users of your products or services, in turn allowing you to focus your marketing efforts on the most profitable customer group.
Behavioral segmentation brings opportunities for digital marketers in influencing the purchase decisions of their visitors and prospects. However, you should be mindful of the fact that in order for behaviors to be predictive, they must be near-habitual (high frequency) and the personality and situational context of your customer must be relatively unchanged.
The physical location of your customers provides context for their concerns, culture, and behavior. Differences in the physical and cultural environment often lead to differences in peoples’ needs, desires, and purchase decisions.
Geographic segmentation is a simple but powerful strategy to ensure highly targeted offers and messages to a local audience. In fact, a few tech-savvy ecommerce stores are already using geolocation tools that utilize data on weather patterns, local festivities, and other events to send specific promotional messages to their visitors and customers.
By grouping visitors according to geographical data, you can tailor the web experience to be more responsive to their precise needs. For instance, online clothing retailers are able to dynamically vary web content – such as the type of products – shown on their website depending on visitor location. This way, they avoid showing less suitable products that may diminish the relevance of the retailer’s site to the visitor goals (eg. Showing parkas and winter clothes to someone in Florida or Southern California).
Psychographic segmentation uses customers’ lifestyle, activities and interests, attitudes, values and beliefs, and personality traits to define a segment. In a sense, this technique delves into the psychological aspects of human consumption. That is, how identity shapes, and is shaped by, the buying choices that individuals make and where your company or products fit into all of it.
People adopt different lifestyles as they go through various development phases. These lifestyles often connote specific needs and habits. For instance, a person’s transition from college to the first job is accompanied by increased independence as well as a different set of social norms to live by, such as workplace dress codes and routines that influence his/her lifestyle choices. Later on, the same person may start a family, get a promotion, or decide to go back to school. Hence, lifestyle-based segments are often useful in understanding the changing needs, level of affluence, and priorities of your visitors based on their current lifestyle.
Some of your visitors may do a lot of sports or exercise while some may be into cooking or baking. Your visitors have different activities and interests and this has a huge impact on their buying behaviors. By creating segments for specific activities or interests, you can connect more effectively with them. For example, you can create content that support their hobbies and interests to engage them (eg. Blog articles on effective exercise or healthy cooking tips).
Last but not the least, you can segment your visitors and customers according to common attitudes, beliefs, and values. People’s value systems are molded by complex factors including upbringing, their social class, and socio-cultural environment. Values and attitudes are important aspects of a person’s identity and this is often reflected in their purchase decisions. Visitors who identify as green consumers will often be concerned about a company’s commitment to the environment. For these visitors, a product or brand’s pro-environment attributes can be a significant source of motivation to buy even if the same product is more expensive than similar products in the market.
Your visitors are the product of the interplay and intersection of demographic, behavioral, geographic, and psychographic factors. You don’t want to create a flat, one-dimensional picture of your visitor by focusing on only one of the techniques above. Great segmentation combines all four ways to construct a clear and multidimensional view of the customer.
The four customer segmentation techniques allow you to create more targeted marketing campaigns. By knowing who you’re talking to and how your audience is likely to respond to your message, you can fine-tune your copy and content to be more interesting, relevant, and engaging for a specific visitor or customer segment. You can expect significant improvements in efficiency from your marketing efforts as target-specific offers outperform non-targeted ones in clicks and conversions.