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The Unparalleled Power of Segmentation

Before beginning any marketing campaign, there are three crucial questions you need to ask yourself in order to achieve success. Over the course of my next three articles, I’ll reveal what those questions are, how to answer them, and how to apply those answers to create a winning campaign that is proven to work.

The First Question

The first question is so basic, so simple, and so important that it’s a wonder so many marketers miss it completely.

Who is your customer?

That seems simple enough, right? Your customers might be 18 to 35-year old men and women who live in urban areas and are college educated. You probably have a general idea of how to sell to them and what they tend to buy.

But let’s dig a little deeper…

Who is your customer based on data?

Instead of marketing to a general buyer persona you think you know, you should be creating highly-targeted marketing communications based on complex customer profiles that reveal…

  • Exactly who your customer is
  • What they are likely to buy next
  • Why they buy what they buy

This means going beyond age ranges and basic demographics, and segmenting your customers into groups based on things like education level, income, location, gender, whether or not they have kids, and what brands and products they love.

Why You Should Segment Your Database

Before you can build an effective marketing campaign, you have to know whom you’re trying to reach, what you’re going to say to them, and what you have to offer them.

When you know exactly whom you’re talking to, you’ll also discover how to speak to them most effectively through your marketing messages. You’ll be able to make irresistible offers for specific customer segments based on hard data, not hunches.

Know How to Talk to Your Customer

We don’t all buy the same products from the same places. Why? It is because we don’t all respond to marketing messages in the exact same way.

Think of the last purchase you made, where you really felt “Wow! I have to have that!” Chances are good that the marketer for that product did their homework. They not only knew what you wanted to buy and when; they knew how to communicate with you to make you feel excited and motivated to buy.

Have you seen that State Farm commercial where the wife ‘catches’ the husband on the phone with a State Farm agent? It’s the middle of the night, and the wife hears her husband on the phone with someone. She assumes her husband is talking to his mistress, and becomes angry. The joke is that her husband is actually on the phone with a State Farm agent, discussing a boring insurance claim.

I find this commercial so annoying! I find it demeaning to women because I deplore the stereotype of the suspicious, insecure, jealous wife. If they were trying to effectively communicate with women in my demographic, State Farm marketers truly missed the mark.

How can you make sure that doesn’t happen with your marketing campaign?

Simple. Speak to your customers how they want to be spoken to by using data. Data allows you to segment your customers, discover their wants and needs, and find more effective ways to communicate with them in a way that resonates with them – not just in a way that you think is cute or funny.

Massa & Co. Image of customer segmenation

Don’t Be Like State Farm

Here’s how to use segmentation to avoid a State Farm-style marketing mishap.

Let’s say you’re developing an email campaign to sell sofas for your furniture store. You’re targeting women between the ages of 45 and 55 years old.

  • Segment your customers into two groups: those who have already purchased a sofa from you in the past five years, and those who haven’t.
  • Consider the point of view of both customer segments. If someone has recently bought a sofa, are they going to be interested in receiving a marketing email showing them a sofa? Probably not!
  • Develop data based email campaigns that speak to each segment’s needs and wants. For those who haven’t bought a sofa, an email with a picture of a new sofa will be effective and if you know the style of furniture each customer usually buys from you – change the image in the email to match each customer’s style. For those who have already bought a sofa, an email with a picture of what they’re likely to buy next will be effective.

How do you know what they’re likely to buy next? Your database can tell you that too. Query for the item most purchased AFTER a customer buys a sofa. That’s not hard, is it? Look at trends in your data!

Segmentation allows you to communicate with your customers in a more personal way. It helps you develop marketing campaigns that solve real problems and address the immediate needs of each segment.

When a customer feels like you GET them, they trust you. When they trust you, they feel more comfortable shopping. When they trust you and feel comfortable with you, they’re much more likely to pursue an emotional purchase, where they feel like they just have to buy.

But remember, it all starts with a simple question: Who is your customer?

Food for Thought: Sally’s Chocolate Pie

chocolate meringue pieThis recipe for chocolate pie will make your brains fall out. There are a lot of different ingredients, and it’s important to combine them in the right order, at the right temperature, and at the right time. If you do, you’ll be able to get the pie shell, the filling, and the meringue topping just right.

It reminds me of customer segmentation. Your customer base isn’t a giant blob that can just be thrown in the marketing ‘oven’ and expected to come out perfectly. Instead, your customer base is made up of distinct customer segments or ‘ingredients,’ each of which has a different flavor, texture, and function in your overall marketing strategy.

Before you can bake the perfect marketing pie, you need a clear understanding of which ingredients you’re working with, and how each ingredient needs to be handled in order to achieve the best outcome.

Here is the recipe for chocolate pie success:

1 C sugar
2T cocoa
2 T flour
Dash of salt

Then add:
3 egg yolks
1 1/3 C milk
½ stick of butter

Add all of this to a sauce pan and cook slowly until thickened. Remove from heat and stir in 1t vanilla extract. Set this aside to cool, then pour into a baked pie shell.

To make the meringue, beat 3 room-temperature egg whites until foamy then add a dash of Cream of Tartar. Keep beating egg whites until they begin to form, then add 6Tbsp of sugar, one Tbsp at a time.

Spread the meringue on top of the cooled pie then bake at 400 degrees for 8-10 minutes. Enjoy!

In Part 2 of this series, I’ll reveal the second crucial question to ask yourself before beginning a new marketing campaign. In the meantime, if you need help figuring out who your customer is and how best to communicate with them, contact Bonnie at (312) 463-1050 or by clicking here now.

Bonnie Massa is Founder and President of Chicago-based Massa & Company, Inc. She works with companies and nonprofits to make the best use of their information about customers, partners, donors and sponsors. With more than 40 years of experience in marketing and predictive analytics, Bonnie is passionate about helping clients make informed, data-driven decisions to increase the value of their customer base. She strongly believes that making pasta and ice cream from scratch are worth the effort, and she spends much of her free time testing and re-testing that theory.

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