A properly executed customer segmentation strategy can help deliver more relevant marketing communication to our customers, create more meaningful website experiences and drive more value to the business. By grouping customers into buckets based on common attributes, we can deliver a more relevant offering to our customers, resulting in increasing response rates, higher customer satisfaction and stronger brand loyalty. Below are some considerations I keep in mind when executing on segment based website and email analytics projects.
Define Goals Like all projects, segmentation begins with defining your goals and determining what exactly you are trying to improve.
- What are my objectives for segmenting these customers?
- What customer interactions am I trying to improve?
Choose Key Performance Indicators (KPIs)
- Which KPIs will I use to measure success?
Map KPIs to Business Goals
- Which KPIs will best measure our success in reaching each goal?
Choose Segments By ranking our initial list of targeted goals and customer interactions, based on their level of value, we can get a better idea of the types of segments to focus on. Also, attempting to determine how manageable and usable the segments are, before you build them, will help save time later.
- Which behaviors drive the most value to my website?
- How many segments make sense?
- How manageable will these segments be over time?
- How useable and useful are these segments as part of ongoing marketing strategies?
Identify Resources Setting expectations early, and determining the types of data needed for each segment ahead of time, could help streamline frustration later. Segmentation can occur across various dimensions such as website behavior, demographic, psychographic, purchase behavior and history. Some website behavior data (i.e. visitor type, responsiveness to marketing campaigns, transaction data) you can probably get via your web analytics tool. If anything else, what other types of data do you want, or do you expect to get, today? In 6 to 12 months?
- What information do I have/ need/ want?
- What resources will I need to get the initial data/ maintain segments integrity?
Build & Validate Like any web marketing project, building and validating data/ segment integrity will be key. Also key, will be making sure each segment is unique and there is no customer overlap at any given time.
- What methods will I use to validate segment accuracy?
- How can I ensure there is no customer overlap among segments?
- How will I monitor segment integrity as over time?
Prioritize Some segments may have high potential for quick wins, but if they are too complicated to build and/or are relatively small, it’s probably a good idea to set them aside to use later for one-off projects. Prioritize the remaining segments based on the level of maintenance and size relative to the level of importance to the business and potential opportunity (i.e expected lift in conversion rate and ROI).
- How much time will be required to build/ maintain each segment?
- What is the expected lift in KPIs? Potential opportunity/ROI?
Develop & Execute Campaigns You could leverage your segments via an email program based on visitor type or
product preferences or use the segments to offer a personalized website experience…there are tons of ways to leverage your segments…it’s all dependent on your end goals.
- What tactics have I chosen leverage these segments?
- Which strategies will be one-off and which ongoing?
Optimize Finally, as we optimize our segmentation projects over time, they’ll become an increasingly valuable method
of gaining insight into key business drivers, and a key component of the business strategy.
- How easy/difficult will it be to change my segments?
- How will I optimize my segments and my campaigns?