Why Segmentation is Marketing 101

Good looking adult woman working at the office. Probably waiting for lunch...The basics of marketing are to establish the benefits of the product you are trying to sell and to communicate those benefits. But a one-size-fits-all approach doesn’t cut it. Your customers and audience are as unique as your friends—each has different goals, problems, and interests. And each person will use your product in a different way, for their own reasons. So, it’s important to segment your audience by their differences and communicate benefits in a way that speaks to them as individuals.

Today there are any number of ad and email tools that help marketers segment and target different audience groups for better results. But before you dive into execution, there’s some legwork to do. Here’s my broad checklist on how to segment your audience for the best results.

  • Before you can understand the differences within your target audience, first identify what commonalities they share. Who is your audience: where do they live, what do they like to do, what brands and products do they like? Identifying the key problem that your product solves on a high-level is also important. For example, Postmates might identify their main benefit as “We enable busy people to have anything delivered on-demand,” therefore solving the problem that people don’t have time to go to the store. The target audience is people who don’t have time. (Note: I’m using Postmates solely as an example; I don’t have any insider knowledge of their marketing strategy.)
  • Next, gather information about your current and prospective customers. You can do this through surveys, collecting information at registration to build your own database, or use built-in targeting options through your email-service provider or ad platform. For example, many ESPs will offer geo-targeting based on IP address and or Wifi/GPS data. Facebook is the best platform when it comes to data, because you can target by dozens of categories and data points.
  • Once you’ve established your high-level benefit and target audience, build out segments. If we look at the “people who don’t have time” audience, there are a hundred ways to break down this very broad definition depending on the information available to you. For example, you could segment by age group, urban/suburban dwellers, high-tech/low-tech users, parents, singles, etc. Overlap is inevitable, so try not to get bogged down with creating dozens of super-minute segments. Start with the basics.
  • Last one: think about the messages that might work best for each individual group, and how they like to receive information. Come up with a hypothesis and then test and reiterate to find the combination that works best. Here’s a (very simplified) example of how you might approach the Postmates case with a Facebook ad campaign:
    1. In Facebook Campaign A, use an ad with the same message and photo “You have better things to do than run errands this weekend. Try Postmates to get what you need, delivered anytime.” (image of individual outside jogging in park)
    2. In Facebook Campaign B, change the image depending on whether the individual is single or married:
      • Single Ad Group: You have better things to do than run errands this weekend. Try Postmates to get what you need, delivered anytime. (image of singles at bar scene)
      • Married Ad Group: You have better things to do than run errands this weekend. Try Postmates to get what you need, delivered anytime. (image of couple at home having romantic dinner)

Let’s say your hypothesis is that Campaign B is more efficient. If you’re correct, you can continue to refine the image/message for better results, or segment even further. Also, you may find out that certain segments respond better on different platforms (Facebook, LinkedIn, Partner Marketing, etc.) or via different mediums (email, push notification, SMS, desktop notifications etc). Pay attention to the data and continuously test your hypotheses.

For retention-based campaigns, it’s important to segment messaging based on how your users interact with your product. For example, at Reuters TV we segmented users into super users, medium users, and low users and built email campaigns based on how often a user was watching our content. This strategy is very common with e-commerce sites. Ever gotten the “We miss you, Person! Come back and receive 15% off your next order” email? If this tactic feels like a no-brainer, it’s because it works.

The bottom line: if you’re not segmenting your marketing campaigns, you’re behind the times. It’s important to build a segmentation strategy for customer acquisition and retention, but don’t feel overwhelmed. You can start with the simplest tests to gather valuable data and become more sophisticated as you learn.

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-Posted by Elizabeth Donovan (Pace)-

Search Marketing is Still the Top Channel for Customer Acquisitions

Image source: multichannelmerchant.com

According to a recent study from Forrester and Shop.org, 85% of online retailers agree that Search engine marketing is the most effective customer acquisition tactic. The study, called The State Of Retailing Online, surveyed 81 retailers in May and June 2014.

Those surveyed also identified organic traffic, affiliate programs, and retargeting as effective tactics. Surprisingly, display may have risen from the dead as display ads now rank as the second-highest area of marketing spend behind paid search.

You can download the full report here, for a fee.

Further reading:

-Posted by Elizabeth Pace

Latest from Facebook: Testing the “buy” button

Image source: Facebook.com/business

Image source: Facebook.com/business

Facebook announced yesterday it’s testing a new “buy” button available to advertisers via ads on News Feed and Pages. This will allow consumers to make online purchases directly within Facebook, with the option for Facebook to store a user’s credit card information for future use.

The new feature brings Facebook closer to a head-to-head competition with e-commerce giant Amazon. Currently, the buy button on Facebook is limited to select small and medium-sized businesses in the US. Before this announcement, Facebook allowed for payments via third party apps.

In related news, Twitter is also edging into the e-commerce space with its purchase of CardSpring, which allows users to claim coupons or special deals via Tweets. In May, Twitter announced a partnership with Amazon that allows users to add items to their Amazon shopping cart using Twitter hashtags.

Further reading:

-Posted by Elizabeth Pace