10 Steps to Effective Customer Segmentation

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?

Measure Results

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?

My web analytics RSS feeds

I just organized my web analytics and excel RSS feeds into two bundles in Google Reader. Feel free to subscribe to my web analytics bundle here. I’ll be adding these w/links to my blogroll soon! If you blog about either of these topics, and you don’t see your site on my shared feeds list, please leave me a comment with the link… i’d love to add you to my reading list.

Humanizing Social Media

So 21 Slides, sponsored by ZAAZ ended up being really fun! I presented for about 5 minutes, on how companies are successfully using social media to humanize their brands.

Below are the five elements of social media, which I think are key to changing the customer interaction model and maximizing customer experience, along with a few of examples of brands that are doing it right. Feel free to take a look at the slides here, for more details on how these brands are leveraging social media.

1.) Brand Ambassadorship

Intuit: Ask the Expert –> Fuji Fims: Every Picture Matters –> Panasonic: Living in HD

2.) Customer Loyalty
Sprint: Suggestions –> Panasonic: Living in HD –> Volkswagen: Facebook

3.) Customer Driven Innovation
Starbucks: Ideas in Action Blog –> Sprint: Suggestions –> Intuit: We Hear You –> Tropicana: Product Packaging

4.) Real-Time Engagement
Home Depot: Twitter

5.) Competitive Differentiation
Starbucks: Ideas in Action Blog

What do you think is key to humanizing social media?! Please share!

My “21 Slides” social media submission

I did it! Just submitted my social media presentation idea for the ZAAZ sponsored 21 Slides event next month! It’s the first event of it’s kind, and i’m excited to attend.

Regardless of whether or not it makes it to the top 8, writing up the submission was an eye opener… I need to work on my writing skills! Apparently I’ve spent too many years with my head buried in the spreadsheets. As well, this was a great reminder that I need to write up a post about my Volkswagen story! Blogging is fun… exciting day =)

Here’s what I sent them…

____________________________________

Title:
Humanizing Social Media: a few stories

Description:
Social media is the place where stories are shared and experiences are formed. Only when brands provide return on emotion to their customers, can they fully benefit from social media. People want to know that they’re being heard. By acknowledging their contributions, and teaming up with their most loyal customers, brands can begin to build stronger relationships with their fans. I’d like to share some collected examples of how companies are using social media to build deep and long lasting relationships with their enthusiasts. Some you’ve heard of, others will surely be new.

As well, I’d like to share a personal story of how Volkswagen reached out to me, to say “thank you.”

Key Audience Takeaways:
To gain a better understanding of how companies are successfully humanizing their brands by building meaningful relationships with their most loyal fans.

Presentation Delivery:

PPT w/ video elements

Social Media Element:
Brand commitment

Spicing it up:
TBD …but I think my VW story is pretty good =)

____________________________________

Thoughts? ?? Is anyone out there =)

16 Bite-Sized Web Analytics Tips

Our jobs can be tough! Here are some bite sized web analytics tips to keep in mind when the days get rough =)

  1. Success is based on how many improvements you help make happen, not by the number of reports you send out.
  2. Your website is constantly evolving, so should your dashboards.
  3. Be an avid web user. Your customers are visiting websites outside of your industry… so should you.
  4. Know web design, usability and marketing, not just numbers.
  5. Remember, the most valuable customer may not be the one who spends the most.
  6. Context is king. Numbers can be deceiving without it, and patterns tough to spot.
  7. Your mission is to understand customers.
  8. A good picture/chart is worth a thousand words (or data points)!
  9. Web data can be messy and reconciliation is hard.
  10. For everyone’s sake, declutter your reports.
  11. Don’t get left behind. Stay current with what your peers are doing in analytics.
  12. Spreadsheets aren’t going anywhere. You can do much more with them than you think.
  13. Your reports don’t create value, you do!
  14. Famous words: Not everything that can be measured should be.
  15. More famous words: You can’t improve what you don’t measure.
  16. And finally my favorite quote: It’s not how good you are, it’s how good you want to be.

Hello world!

This post by my favorite web analytics blogger, has inspired me to start blogging. More to come about who I am later =)