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The Concept of Smart Segmentation

What is smart segmentation

You have a large database of leads? That’s great!

It takes a lot of effort to build one. But worth it since a business’s future is built on leads. A database is only as good as what you do with it. So you need to use it carefully.

Large disorganized databases are messy to handle. Organizing them would be a good first step.

Smart segmentation is a system of classifying and categorizing leads based on certain pre-determined stipulations.

Key Considerations

Your segments must be:

  • Practical: Not too many, not too few. A rule of thumb suggests 8 is ideal because this tends to be a manageable number.
  • Distinct: Make sure that each segment is markedly different so that you can tailor your messages/ actions for maximum effectiveness.
  • Adaptable to different campaigns: Segment creation should be such that they can be used for varied campaigns.
  • Open to adjustments: Be prepared to make edits to segments based on results and feedback.

Base Factors

Customer segmentation needs to be based on certain tangible parameters:

  • Identity
    Know the identity of your customers, they expect it. Maintain a basic profile about your customers with demographical information such as their age, gender, occupation details etc. These factors help you classify leads into appropriate segments.
  • Attitudes & Behavioral Cues
    The different kinds of attitude and behavior that prospects demonstrate gives important cues on how you need to engage with and convert them. Tracking your prospects’ engagement activities will give you valuable inputs for your campaigns.
    Who is opening your emails and who isn’t? Are they looking at your discount offers and moving away without buying? Is discount the only incentive that makes them buy? All these questions give you an idea on handling prospects in different segments.
  • Channels of Engagement
    Know the channels through which customers prefer to hear from you. Successful marketing communication depends on delivering the message through a channel the prospect prefers. Knowledge of customer preference of channels helps develop and target content right with the most impact.
    For example, millennials may prefer being contacted through social media channels but baby boomers may be more partial towards emails. Similarly, younger customers might engage with your brand through apps more but older customers may show preference for your desktop site.
  • Timing
    Sending marketing communication when the prospect is not available or is uninterested is of no use. It’s important to know the best time to approach prospects. Gain understanding of their browsing habits so that you can connect with them when their interest is at the optimum – the time at which they check emails, do product research, shop etc.
  • Current and Future Value of Customers
    Factor in the value customers are adding to your company now and project the value they might add in the future while establishing segments. Knowing the expected value of customers will help in approaching a segment.
    For example it’s one thing to approach a prospect as a one-time buyer of a $100 product and it’s another thing to see the customer as a potential $10,000 business possibility based on the prospect buying a $100 product once a month for the next 10 years.

Smart segmentation based on measurable factors helps in:

  • The ability to create exclusive campaigns for specific segments
  • Executing more precision-targeted campaigns
  • Customized and more intelligent marketing communication

Have you implemented ‘smart’ segmentation? What do the results say? Tell us in your comments below…

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Team Position²

Team Position²

Position2 is an innovative digital marketing agency that accelerates demand through integrated Content Marketing, Paid Acquisition, and Marketing Technology solutions. Our demand acceleration solutions map the buyer’s journey across multiple touch points such as search, social, mobile, media, and email. These integrated campaigns are powered by cutting-edge content creation, digital advertising, web design/development, marketing automation, and analytics. We serve hundreds of clients ranging from VC funded startups to Fortune 500 multinational firms. Our 200-member team is based in Silicon Valley and Bangalore and consists of marketing gurus, engineers, data scientists, writers, and designers. Founded in 2006, Position2 is backed by Accel Partners.