This article was written by Adam Ortman, Group Director of Innovation & Technology, Generator Media + Analytics


This article was posted by Toolbox.com on May 12, 2021


Segmentation is not a new concept. It is an oft-used tool that helps identify a target audience and then leverage those insights to tailor marketing campaigns, products, or services toward a particular market or consumer need.


But the current approach to segmentation often lacks the finesse necessary to capture attention at the most opportune point along the path to purchase. This gap makes it even more important for brands to understand the value of consumer data ingested into CRM and what can actually be done with this information when you “slice and dice” it in certain ways.


You can discover consumer segments that can provide much deeper value and insights about a customer base. This approach can also optimize ad spend and increase conversion rates for prospective new customers in the process.


Nothing Solves a Problem Like… First-Party Data


Many brands struggle to understand the full value of first-party data. It is the gift that keeps on giving, largely due to the simple fact that this customer information allows for better targeting through prospective channels that can then capture even more information to expand reach with even more targeted campaigns.


Besides, an increasing number of data privacy measures similar to GDPR and CCPA are likely on the horizon, along with the eventual removal of third-party cookies from the marketing toolbox. This places first-party data in the best position for targeting in the digital realm. In the end, companies that can leverage their own information most effectively across online channels will find success.


Going forward, brands will need to employ some give-and-take to establish and maintain their customer relationships to continue collecting data, such as name, email address, age, and interests. Consumers will expect value in return for this information, of course. Value can take many forms and will depend largely on your customer base, so you may need to get comfortable with trial and error to arrive at the right promotional offer to encourage this exchange.


Once you do strike a chord, do not approach data segmentation in the same way you always have. Again, it is all about segmenting this valuable information more strategically. Here is where to focus your efforts:


1. Apply the 80/20 Rule

The golden 80/20 rule is an essential component of any slicing-and-dicing initiative. Think of it as your first slice, where you identify the top 20% of customers who generally make up 80% of your sales.


With that data in hand, marketing engines (e.g., Microsoft, Google, Facebook, etc.) can then use machine learning models to find lookalikes who match this 20% in certain benchmark characteristics like demographics, interests, online behavior, social activity, and so on. This approach should also fit in nicely with Google’s new federated learning of cohorts (FLoC) targeting structure it is rolling out as an alternative to third-party cookies.


These lookalikes should act similarly to your highest-performing customers, making them much more likely to respond to your marketing campaigns and ideally expanding your customer base.


2. Empower Your Champions

Most brands have a set of customers who can best be described as market mavens. These supporters champion a brand by introducing its products or services to not only friends and family but also across social channels. Ultimately, these are your loyalists and biggest fans.


The only problem? Brand loyalists can be an elusive beast in the wilds of today’s marketplace. And considering they are not always tied directly to large volumes of sales themselves, companies can overlook them in their targeting efforts. That is a big mistake because they impact a fairly sizeable number of sales beyond their specific CRM records.


Marketing initiatives focused on these influencers almost always involve rewards for their brand-building behavior. Exclusive sales, discounts, freebies, and advanced access are just a few incentives you might consider offering. If you are still struggling to identify these champions, try using referral-based programs or “how did you hear of us” surveys.


3. Use Discretion with One-and-Doners

A “one and done” customer is just as it sounds: someone who has made a single purchase and never returned for another. Many companies will try to optimize their ad spend by employing a little audience suppression, omitting this sector from marketing campaigns.


This tactic is justifiable, especially when working with tighter budgets. But these individuals can help you learn more about brand perceptions and experiences. For example, understanding why these consumers were initially drawn to a product yet opted not to return can provide relevant insights into keeping consumers engaged beyond introductory purchases.


Getting this information can be as simple as requesting feedback or sending out a survey. You might also choose to test or fine-tune messaging by providing these customers with a promotional offer or isolating them specifically within a remarketing campaign.


4. Hop on Your Cross-channel Froggers

Cross-channel froggers are those individuals who purchase from a single brand through a variety of channels. Today, it is on Amazon. Tomorrow, it might be through your website or down the road at a local store.


What should make this group of interest to your brand is the additional insights it can offer into purchase behavior. Sure, several of these consumers may very well fall within your 20-percenters, but not all of them will.


And that is why segmenting your CRM is necessary. It can help you isolate and capitalize on the most efficient and profitable channels for marketing campaigns. This process also reduces the friction between people interacting with your brand and actually purchasing your product or service, making overall brand interactions far more seamless.


Consumer data has always been valuable, but it is quickly becoming priceless for brands working to reach the right customers at the right time on the right channels and with the right messaging. It is a tall order, but it is much easier when you slice and dice your CRM with the skill of a culinary ninja.