Whatever your marketing goals, you have a single desired outcome: attract and retain your ideal customer. One way to make sure that every step of your outreach plan is moving you toward that goal is to use customer segments. Let’s take a closer look at this “buzzworthy” marketing term, and how it might be the rising star of your next promotional campaign.
What are customer segments?
More commonly referred to as “customer segmentation,” grouping together target customers based on shared traits is simple in concept. You can use any characteristic relevant to your business to create segments.
Some common traits include profitability, the channels they use, geography, age, technical aptitude — or even loyalty. Your customer segments can have distinctions as detailed or as broad as you find useful to your marketing plan.
How to create successful customer segments
The ultimate goal of segmentation is to create groups that will eventually lead to more sales. It's vital that your character traits are useful.
While it might be a fun exercise to overthink your ideal customer "avatar," imagining details about your customer that won't affect sales is wasted time.
Segments based on geography might not be relevant for selling generic tech tools, but will most certainly affect marketing for winter sporting equipment. Always use discretion when determining if data from your ideal customer profile is worth putting into a formal marketing segmentation.
You can avoid creating worthless customer segments by keeping your goals in mind.
What do you want your customers to do for your business? In addition to buying, your customer segments might also help you to:
- Reach a different market through comprehensive social media campaigns.
- Troubleshoot new features in your product.
- Maintain the right mix of new vs. returning customers.
- Grow sales in demographic markets you have found challenging to penetrate.
Define the things you want your customer segments to do for you — in addition to buying. Then make sure all the traits you are tracking are a means to that end. At a minimum, you can put any traits that are unproven into a slush pile to return to later, if needed.
Avoiding the biggest marketing mistakes
It doesn’t matter if you dream up the ideal customer, use customers you already have, or target the customer that your competitor has earned. There are some caveats to keep in mind when creating and using customer segments. Most importantly, you should be aware of the timeline and resources available to utilize these segments.
If you have a crunch campaign that needs to be executed on the fly, some segments aren't going to be able to provide much leverage. Likewise, if you've identified 50 or more possible segments to target, but have the budget to engage just a handful fully, it's important to go after the most profitable group first.
Many businesses get excited when they realize how much power customer segments have — and they should be!
A well-executed set of customer segments can show just how much growth is possible for your product or service.
It's essential, however, to pace your efforts and keep a steady strategy in mind. Common mistakes that companies make when using customer segments include:
- Focusing their marketing efforts (and dollars) at too many customer segments at once. This can lead to lack of funding for finishing each campaign in a strong and brand-worthy manner.
- Failing to track data from campaigns geared toward segments. Not knowing which customer segments converted best, for example, can lead to wasted dollars and missed opportunities.
- Not knowing at which point in the buying cycle each segment currently resides. How many touches have you made to each segment? Are you overstaying your welcome? Could you push more messaging their way?
While many businesses include the buy cycle stage as part of a segment, it's worthwhile to track where every segment currently is in the process and adjust messaging accordingly. You don’t want to annoy your customers.
Using customer segments the right way
There are quite a few ways to waste all the hard work of segmentation. Fortunately, the perks are worth the extra effort! Let’s look at what works.
Let's be honest: envy is a legitimate driver to purchasing. While most brands are inclusive with their marketing efforts, there is also something to be said for making the brand experience "exclusive." In addition to using your customer segments to market directly to them, use look-alike marketing tools to reach out to others who might respond well to being in the know. There's a reason celebrity endorsements work. Using lower-priced FOMO (fear of missing out) tactics to speak to an audience can have incredibly useful results.
Not only is it incredibly efficient to use customer testimonials, photos, and social proof as part of your communication strategy — it works! Customers adore seeing their brand stories come to life on the pages of websites, in social feeds, and even on packaging. Give your most loyal fans a way to share their love and use it to further your messaging.
Provide live support
Customers love feeling loved. Knowing there is someone on-hand at all times to tend to their needs can boost your business in unimaginable ways. Using customer segments to identify the wants of website visitors and creating a live support option that anticipates those wants can go a long way to making the sale — and keeping lifelong customers!
Building relationships that last
Whether you use your customer segments to scout out new customers or nurture those that you have had for a lifetime, it's important to circle back with each group on a regular basis to maintain that sense of connectivity.
Many brands have been successful in using significant milestones to reconnect after a time. New parents become moms of preschoolers before you know it. Those paying for college switch into retirement funding mode overnight.
By tracking the changes in your segments and acknowledging those critical "next steps," you can meet them where they are at — wherever that happens to be. If done correctly, customer segmentation can be part of a long-term marketing strategy that carries your business year after year.