Don’t Ditch Segmentation for Personalization
Why Both Are Key to a Successful Digital Marketing Strategy
May 20, 2016
As digital marketers, we are spoiled with data. Never before have marketers been able to accurately track so much information about their customers’ demographic information and behavior – geolocation, number of site visits, time spent on site, number of page views, and so much more – it’s a treasure trove of information.
So what can be done with all this info? Effective marketers use it to segment their audience, which is when you separate your customers into unique groups comprised of people sharing common characteristics. This allows you to create content that will appeal to that particular demographic, making for higher engagement and conversions. But you aren’t just limited to segments.
You can go even further with personalization – where ads are created down to the single-user level. By taking a user’s individual actions into account, you can target them with dynamic ads for specific products you know they have viewed or are interested in, making for even stronger conversions. You can even recommend products based on purchase history, or the categories or product pages they have visited.
So what’s better, focusing on personalization, or segmentation?
An effective campaign strategy will embody both – the general information provided about your customers that segmentation provides is invaluable. Personalization will help you better refine your targeting, and zero in for the conversion. These aren’t competing schools of thought (as some would have you believe), they’re complimentary tools that will help any advertiser drive a strong ROI.
GET TO KNOW YOUR CUSTOMERS WITH SEGMENTATION
To better understand your customer base, you need to organize them into segments. There are two common forms of segmentation:
Standard Segmentation: the practice of dividing a large group of consumers into smaller groups that share certain demographic characteristics; age, gender, location, role, etc.
Behavioral Segmentation: creating smaller groups based on their actions taken while online; takes into account purchasing history, time spent on site, pages viewed, etc.
By analyzing user data, you can get a better idea of who exactly your customers are. This gives you a number of insights into not only who your customers are, but how they act. Segmentation allows you to get ahead of potential customers by giving you an idea of what they will respond to, be it to a product or an offer. By knowing probable actions of an entire group of consumers, you can craft your messaging to better connect with them. Here are a couple of common examples of shoppers can you discover and segment that may be perusing your site:
Loyalty Shoppers: these are customers who belong to loyalty programs and typically like to purchase everything from one store to earn rewards. Try serving ads that offer a discount when a certain amount of money is spent.
Free Shipping Hunters: the name says it all; these types of shoppers will purchase what they need from any site offering free shipping. Offering them free shipping is a no-brainer.
These two shopper types would respond to different types of deals. The shopper looking for free shipping isn’t looking to spend a lot of money to get their discount, and while the loyalty shopper would certainly appreciate free shipping, they would be more motivated by an incentive to spend just a bit more for something they need. The key is to act on analytics to determine how to influence, encourage, and convert site visitors. Using what you know about the types of customers you are dealing with, you can predict what will work and what will not.
Overall, segmentation is a vital tool in any marketers’ arsenal and shouldn’t be ignored. It gives you the information you need to make decisions at scale, and it does it without being obtrusive to your customers. They won’t ever really know you’re dividing them up and serving them ads based on their information (which some are uncomfortable with), they’ll just know that you’re offering them content that is useful to them.
GO FURTHER WITH PERSONALIZATION
Personalization takes advantage of real time data to offer consumers relevant content that will benefit them immediately. It drills down deeper than segmentation, focusing on an individual user’s behavior to zero in on exactly what they are after. Consumers are generally receptive to this type of offer, 50% of US shoppers think retailers should offer promotions and merchandising tailored to their past purchasing behavior (just don’t be creepy about it).
The key to personalization is being able to offer dynamic content that changes to match the interests and browsing history of your customer. We recently discussed retargeting for apparel retailers, and one of the campaigns we featured is a prime example of personalization.
The Cart Sweeper: offer your customers discounts on the items they left in their shopping cart. This gives them a personalized deal based solely on their individual actions. This type of offer comes in handy too – eMarketer recently reported that three quarters of the world’s shopping carts are abandoned, so there is a lot of opportunity to make up for missed sales. By drilling down and offering a deal that is hyper-personalized to the user, you are completing a sale that otherwise would have drifted away.
There are numerous other ways of grabbing a customer’s attention – escalating offers, flash sales – but the key component is using your data to offer a deal that the individual user will personally identify with.
MAKE SEGMENTATION AND PERSONALIZATION A PRIORITY
One important thing to remember is that personalization and segmentation aren’t mutually exclusive. You can – and should – use both. You can create a segment of cart abandoners and serve them dynamic ads based on what’s in their cart, or you can segment and incentivize users who visited your site and viewed a specific product multiple times. The trick to both is access to rich, real time data that lets you adapt your strategy and creative – if you do that, you can serve content that will effectively engage your customer base.
Interested in learning more about SteelHouse? Visit us at www.steelhouse.com.