It’s funny how after years of innovation and digitisation, one of marketing’s most powerful tools may be the oldest trick in its book.
Segmentation and targeting has been around for decades. But it’s only in the last few years that data and technology have come together to make it what it is today.
Intelligent, proactive, and highly conducive to testing, effective segmentation in the digital age is crucial to marketing success.
That being said, it’s important to remember that the success of any segmentation tactic comes down to your ability to tie all your data back to real people. Connect to, understand and then activate your offline data across all your digital channels, and there’s very little you won’t be able to accomplish.
The technology exists, the data exists, and the willingness to deliver more targeted marketing exists – smart segmentation isn’t just a tactic. It’s a people-based marketer’s imperative.
Segmenting Based on Offline Purchasing Behaviour
For all the noise and interest generated by eCommerce and digital marketing, the vast majority of retail purchases still happen in store. Which means the vast majority of useful behavioural data on your customers is stored offline.
So a smart move for a segmentation-curious marketer is to tap into the wealth of in-store purchasing data you have stored offline.
Why segment based on offline purchase behaviour?
Even though most of your efforts to identify, attract, and persuade your prospects happen online, the proof of that pudding lives offline. By tapping into your offline transactional data, you can create segmentations based on the products that were actually sold the most.
That means being able to connect the dots between your online activities and their offline impact. For starters, this makes for highly specific targeting opportunities in the context of other tactics like audience suppression and look-alike modelling.
But on a more macro level, this gives you the ability to spot buying patterns in the data and inform the rest of your marketing.
Another valuable use of offline data is to connect your call centre data with your digital ad units to either suppress certain segments or give them special offers.
Who should use this tactic?
Brands in nearly every industry are using data onboarding to activate their offline transactional data.
One particularly interesting use case is in the automotive industry where offline data about car purchases can be used to then inform the targeting activities of insurance products.
Segment-Based Cross-Selling and Upselling
Smart cross-selling and upselling are essential to effective digital marketing.
But when the only context you have to consider is the product page someone’s on, your ability to make a relevant recommendation is limited. So when you throw into the mix their purchase history and behaviour data, you can start to make more relevant recommendations based on the segment they belong to.
Why use segment-based cross-selling and upselling?
For one thing, a segment-based view of recommendations would inform your strategies across channels. That is, if someone bought a product on your website, it isn’t enough to make the right recommendation on your website.
The smart thing to do is to advertise the complimentary product to them through your search, mobile, social, and display channels too.
Even better, you can understand how customers use different channels and tailor your messaging to match. For instance, if they use mobile to browse, then you can run brand recognition campaigns on mobile and more specific product recommendations when they’re back on their desktops.
Another benefit of segment-based recommendations is that the feedback loop created by testing offers and measuring responses can then be used to inform the rest of your segmentation tactics.
Who should use this tactic?
One great example of smart segment-based upselling can be found being used
by large banks. Here, customers who’ve recently bought a credit card are targeted with offers on insurance products depending on the kinds of purchases they’ve made most recently.
Reactivation is all about identifying the customers who haven’t engaged with you in a while and targeting them with unique, relevant offers.
Instead of ignoring this segment like a foregone conclusion, it makes sense to gauge when the right time to re-engage is and find out what offers really work.
Why use reactivation?
It makes a lot of sense to treat dormant customers like a separate segment.
On the one hand, they are former customers so they’re likelier to reconvert. But on the other, getting them to convert again can be even harder than pursuing net new customers.
Who should use this tactic?
A number of smart marketers are using reactivation tactics in interesting ways. In subscription-based businesses like magazines and publishing, it’s been proven that it’s a lot easier to get people to re-engage with content, than it is to engage new prospects.
Another great case for reactivation is in niche holiday resorts where customers may not come back for several years at a time. A smart reactivation strategy here can be the difference between repeat, high-value business and a forgotten story in a Facebook album.
Rethinking Segmentation For Smarter Marketing
While segmentation may be familiar to many, in recent years it has changed.
Now, thanks to innovations in data and technology we’re better able to segment intelligently, using the tactics above plus others such as audience suppression, look-alike modelling, targeting based on online activity and more to better reach the right people, with the right relevant messages, at the right times.