Successful marketing campaigns are built on a data-driven understanding of customers. By applying customer segmentation analysis to customer lists, B2C enterprises can better understand where they stand in the market, who to go after, and how to reach them.
Do you really know your customer base?
From time to time, clients will tell us they already know who their customers are. And we do recognize that they are in the best position to make that claim. Our response: it's always best to base marketing strategy on facts, not assumptions.
It is important to take a step back from what is believed to be true. Customer segmentation may, at the very least, confirm what you already know, but, more likely, it will reveal new information.
Get to know your audience and their interests.
There are several different customer segmentation services available; The Ivy Group generally turns to PRIZM MyBestSegments by Nielsen.
PRIZM defines every U.S. household in terms of sixty-six demographically and behaviorally distinct types, or “segments,” to help marketers discern those consumers' likes, dislikes, lifestyles and purchase behaviors. Customer segments are based on geographic location; at the heart of Nielsen segmentation is the adage, “Birds of a feather, flock together.”
PRIZM consumer segments include demographic information (age, marital status, number of children, income, industry, etc.) alongside detailed lifestyle behaviors and media preferences. Lifestyle behaviors include choices such as cars they buy, stores they shop in, alcohol they drink, music they listen to, and activities that interest them. Media preferences indicate favorite TV shows, magazines, radio, websites, social platforms, and topics of interest.
Segment insights inform media buys, messaging, and strategy.
Segmentation focuses on not only interests but also preferred formats. For example, if nearly every media preference is a hunting, fishing, or general sporting website, we know that outdoor recreation is important to that segment. We also recognize that they consume a great deal of this kind of information online, rather than in hard copy. An effective advertising platform to reach that segment would therefore be digital ads on websites related to outdoor recreation or a Facebook advertising campaign targeted at people who "like" topics related to outdoor recreation.
Customer segmentation can also be used to draft messaging, inform an advertising and communications strategy, and guide selection of new services and products. Content, messaging, format and platform can be customized to appeal to each distinct target audience. Addressing each audience according to its expressed interests and in its most preferred format is the most effective way to grow a business.
Listen to the research.
We recently applied customer segmentation to the customer database of a company selling spas and pools. The client came to us with a plan to sell spas to families as a way to spend time together without electronic distractions. When we looked at their customer list, however, we found that the majority of their spa customers were not young families but were instead empty-nester couples.
With this revised vision of their ideal customer, an advertising campaign promoting a spa as the ultimate family fun zone was no longer relevant. To promote spas to older couples, the advertising campaign focused on a spa as a romantic retreat for empty-nesters reconnecting and relaxing. Very different from the original concept!
Want to know more about segmenting your customer base? We can help!