In a post GDPR world, customer segmentation and data analytics companies are on everyone’s lips. The importance of clean data and accurate targeting is essential today, and you need to ensure your customers are correctly segmented to appeal further. It’s important to note that not all customers are the same, so your messages should not be either. A one-size-fits-all strategy simply does not work anymore, which is why you need to speak to your provider and look to see whether they offer data management services (luckily, WDM does…).
What is customer segmentation?
Essentially, customer segmentation models refer to a method of arranging your consumers into smaller groups. These groups can be identified by particular characteristics – such as buying habits, previous purchases. Alternatively, you could simply segment them by age and location. After you have done so, you can produce your target marketing strategies, crafting relevant messages for each group. In simple terms, an 18-year-old woman is not going to be interested in the same products as a 50-year-old male. Therefore, data segmentation is essential for personalised marketing.
However, it’s not just your message that is critical, it’s also how you communicate that message. For instance, some of your consumers may prefer a direct approach, through the use of direct mail marketing. Therefore, you might need to look into the services of a mailing house. Better yet, look for mailing companies that offer mail and print services, alongside data cleansing, account management and even design. A mailing house (like WDM) may also offer storage if you are sending your marketing out in stages, so you must check all requirements beforehand. You can read even more on how to choose a mailing house with our extensive guide.
How do I start?
Firstly, you need to determine the reason for segmentation. If you have a very niche target market, all with similar characteristics, it may not be necessary. However, if you do boast a large customer base of varying ages and traits – customer segmentation models are essential. You will need to organise your list of current consumers (GDPR compliant, of course) and know what you are working with. Alternatively, you can speak to a mailing house and discuss their data management and cleansing services. More often than not, they feature specialised software that can take the hassle out of your hands. If you have your own database, you can:
- Use all data you have from purchases, such as amount and specific products
- Utilise the segmentation tools available to help customers
- Place your customers in groups, such as age and location for personalised marketing
- Obtain any additional information from speaking to customers directly, perhaps include a survey on your website
When it comes to customer segmentation models, you can follow these simple steps.
If you want to create target marketing strategies, you can do so easily by dividing your customers based on demographic data. For instance, this can include their age, occupations, education, income, gender, marital status and whether they have children. Doing so means you can already begin personalising your direct mail marketing and creating accurate messages.
Create segments that relate to particular areas where your company operates. You can also further segment your consumers on the specific location, such as rural village, urban neighbourhood and even climate.
If you have the information to hand, you should be dividing your group depending on the products they buy, how often and even how they purchase. For example, do they browse your website on their phone; perhaps an exclusive mobile offer will ensure they return. Similarly, if you have information on their past purchases, you can provide vouchers and discounts for similar models – taking inspiration from the Tesco Clubcard scheme.
How do I use the segments
Once you have the segments, you can begin personalising your marketing. Ultimately, doing so will help you stand out from the crowd of your competitors. Those who shout the loudest…
You need to prioritise and place value on your customers. Generally, around 80% of your company sales come from only 20% of your customers. Therefore, you need to identify where you are making your money. Good customer segmentation models identify those few, so you can adjust and refocus your marketing efforts for their needs. As mentioned above, many mailing companies can provide this service, ensuring you meet the needs of your most prized consumers.
When you understand your most important market segments, you can begin to personalise. You must edit your language and message to appeal directly to their wants and needs. This can greatly reduce your budget, particularly if you are sending out bulk direct mail marketing in the hope that someone responds.
For those opting for direct mail marketing, you can use different formats for appealing to customers. For instance, those that you have identified as more engaging, you could utilise the power of dimensional mail. Ask the consumer to build a specific product, thus advertising your message and encouraging them to share. However, if you are simply looking to build awareness of your brand, a personalised letter or even a small brochure may be a more suitable option.
Once you know who is buying your products, you can begin to improve your offerings and make changes to better appeal. These changes should, subsequently, make the products more useful and also serve to enhance your communications with consumers. In turn, you’ll gain an edge over your competitors and begin to expand your database. You can even go further to tailor a whole customer experience as part of your target marketing strategies.
Ultimately, the key is to create an accurate picture of the individual you are hoping to attract. Not all two people are the same, and your marketing campaign needs to reflect this. As you begin to analyse your customer base, it will soon become clear that there are groups with specific requirements and a higher priority. If you would like to discuss our direct mail services – including customer segmentation – you can get in touch with our team today.