What is Segmentation?
Segmentation in marketing is using qualitative and quantitative research to identify defining characteristics that are likely to influence a purchase decision. Marketers use that information to target individuals by group (also called segments or audiences) based on shared attributes.
For example, you may want to segment loyalty card members differently than those that are first-time shoppers.
Segmentation is used in traditional and digital marketing to create specific messaging for each audience. Segmentation is important because it allows you to focus on different messages for different audiences. When your message is relevant to your audience, it’s more likely to convert.
Segmentation in Digital Marketing
Segmentation is used widely in digital advertising and content marketing. When creating a digital marketing campaign, targeting audience segments is an integral input into ad content, email, and landing page creative and messaging.
With A/B Testing, learning what messaging is best received for each audience segment creates a way to always better the user path on your digital properties.
Marketing Segmentation Strategy
When beginning a marketing strategy, one of the first questions you’ll hear is, “Who is your target market?” This question is answered by compiling and analyzing data through market research, web analytics, and surveys.
Your target market will include a variety of people looking for your product or service with different motivations and desires. Creating a marketing segmentation strategy breaks your target markets into smaller audiences so you can speak to them in a more personalized manner. Each segment can reflect consumer demographics, brand loyalty, and a host of other variables. If your segments are exceptionally diverse, you may wish to provide them with completely different experiences.
Demographic targeting is the most common form of segmentation. The most common form of demographic targeting is by age & gender, but there are many factors you may want to consider as outlined below. If your product is women’s running shoes, targeting women from the age of 18 – 55 and creating messaging specific to that segment would push your content and/or advertising towards users most likely to have higher engagement.
- Annual Household Income
- Job Status
- Marital Status
- Level of Education
Geographic targeting (aka geotargeting) pinpoints where you want to promote your products. If you sell your products and/or services in the United States, you wouldn’t want to be promoting it in other areas of the world. If you’re selling winter clothes to your US customers, promoting your products earlier in the fall to northern US states than to southern US states may create stronger ROI.
If your products/services are global, geotargeting also allows for creating messaging in the native language of the country or region you’re serving.
You can geotarget at a high level, or very granularly:
- Zip Code
Psychographics target based on customer interest and personal views, hobbies, interests, opinions, and attitudes. Two women between the ages of 35 – 45 who live in the same geographic region will have different interests, hobbies, and opinions. For example, psychographic targeting creates the ability to target a user who appreciates high-fashion items over shopping at a big box retail location.
- Interests & hobbies
- Social Status
- Personality Type
- Attitudes & Opinions
Behavioral targeting is when messaging is presented to a web user or recipient of email based on collected data like the user’s browsing activity, past apps and websites visited, engagement data for web pages they have visited, and search history.
- Patterns of Web Use
- Search History
- Engagement Data
- Price Sensitivity
Another way to segment visitors is by how they’ve reached your web property and what they’ve used to see it. For example, if you’re marketing a new app that is only available for Apple mobile devices, utilizing technographic profile data allows you to create a segment that excludes all desktop and tablet devices, as well as excluding other mobile device manufacturers outside of Apple.
- Traffic Source (Website, Ad Network)
- Traffic Medium (Organic, CPC Advertising, Social, Referral, Direct)
- Device Category (Desktop, Tablet, Mobile)
- Browser (Chrome, Firefox, Safari, Edge)
- Operating System (Windows, Apple, Android, Linux)
- Network (Phone or Cable Provider)
The Importance of Quality Data in Behavioral Segmentation
As we mentioned above, effective behavioral segmentation relies on high-quality data. Poor data quality happens for several reasons including:
- Human error
- Inconsistent data-entry standards
- Siloed data/lack of data unification
- Poor integration of data systems
Bad, incorrect, or incomplete data makes it impossible to create accurate behavioral segments. Investing in data governance tools and processes to “clean up” your data helps create the foundation for ensuring all data sources produce high-quality data.
This doesn’t have to be a huge investment. There are many affordable customer data and analytics platforms on the market that can be used to streamline data collection for the purpose of implementing behavioral segmentation. This includes some you may already be using like Google Analytics, Kissmetrics, and Adobe Analytics.
Tools for segmentation can be integrated as part of a larger personalization initiative by implementing a personalization platform like Monetate to unify CRM, eCommerce, and other data and combine it with behavioral data.
A/B Testing and Segmentation
Streamlining your segmentation process doesn’t end when you upload your content and creative to your campaign or digital property. A/B testing tools provide a way to test a variety of creatives and content to pre-defined audience segments to continuously improve campaign emails, apps, and website experiences in various parts of the funnel.
A/B, A/B/n and multivariate testing are used to create a variety of messages for audience segments to learn which message works best for each segment. Monetate Segmentation and Targeting is designed and built for marketers to create engaging customer experiences that increase conversions and revenue. By optimizing messaging and creative for specific audiences, companies are able to reduce bounce rate, increase add-to-cart rate, and improve revenue.