Marketing Segmentation has changed. What used to be a simple task of filtering your database by a standard set of criteria has evolved. Smart marketers now use technology coupled with data to target their audience. Why? To target based on needs, behaviour and propensity to buy.
Executed properly, market segmentation and micro segmentation is a powerful way to create a strong competitive advantage which will impact both your marketing results and your revenue.
Ask any marketing manager what segmentation is and they will most likely tell you it’s “the process of dividing an overall market into key customer subsets, or segments, whose members share similar characteristics or needs – for improved targeting.”
Simple. Right? Yes and no.
Used as the basis of your strategic marketing planning, segmentation makes your marketing more effective. This is because it enables you to send marketing messages that are relevant and needed. Then, by adding marketing automation, your messages are sent at exactly the right time.
However, not all marketing segmentation is in-depth enough to deliver results. Many marketers only target by sector or job role – this tends to be the case in most of the businesses that I meet. This is usually the result of not investing time to keep databases up-to-date. It can also be due to the lack of a CRM system that is structured in a way that enables marketers to target based on different parameters.
But marketing can be far more effective if you gather more data for deeper segmentation. Here are the reasons why, if you have not already, you need to review your approach to both managing your data and segmentation.
Reason 1: Improved ROI
Targeting high value customers and prospects enables you to focus your marketing spend and sales efforts on high propensity-to-buy accounts, maximizing your ROI.
We all know that some customers spend more than others. It seems very logical to rank accounts and prospects based on best to worst revenue potential. However, there’s no need to overcomplicate things. Start with a simple “High Value” or “Low Value” indicator, then target the high value accounts and prospects fist.
High value can be determined by a number of factors. This is a great task for the sales team to undertake and SBI has a very useful account segmentation tool that you can use. The more information you can provide to your marketing team, the more support they can give you with lead generation and account-based marketing tactics to help you meet revenue targets.
Reason 2: GDPR
The enforcement of GDPR earlier in the year means that you require lawful grounds for processing data. If you rely on consent as the basis for contacting your prospects list, granular consent is a great way to grow your opt-in lists.
Granular simply means a more specific topic. Instead of asking people to opt-in to your mailing list, give them the opportunity to opt-in to various topics, like we do on the KG Moore opt-in list. Having separate topics makes it easier for people to choose what they feel is of interest to them.
GDPR also requires you to show when someone gave consent. By having a granular opt-in, it makes it easier to be perfectly clear about what someone was choosing to receive. If you still need help with ensuring your marketing is GDPR compliant, download our #SmartMarketing GDPR Action Plan.
Reason 3: Relevance
If you sell a product or service that is highly specialised, your messaging is automatically very relevant to your audience. For example, If you sell dentistry equipment, you will spend your time selling to dentists.
However, for most businesses, there are a number of markets you can sell into. But should you? How do you make the message relevant to everyone? How might their needs vary?
Let’s use KG Moore as an example. We help companies develop a marketing strategy. Any business could use our services. We could target everyone.
But we don’t.
We target businesses that want to make the next leap in growth. They already know they need a marketing strategy to support their revenue objectives, so we don’t have to explain why it’s important. They will have budget for marketing. They will also have certain needs that fit well with our services.
There are a few more factors we use in our targeting, but we’ll hold those close to our chest. I think you get the point we are making 🙂
Reason 4: More Leads
Everyone wants to know how to generate more leads. There are plenty of tactics that you can use to drive more traffic and get the phone ringing. But don’t forget the basics – the data you collect in any lead form or inbound call.
The better your data collection, the better your segmentation. This gives you the ability to create better marketing, released at the right time – resulting in more lead generation.
Once you get the basics working well, you can then move into micro segmentation which drives even greater results. We’ll explain micro segmentation in another blog but, for now, take the time to review how you capture data into your CRM. Then, review how you segment and target.
I guarantee you’ll find some obvious improvements you can make.
If you require any support with your marketing or guidance on how to improve your marketing results, get in touch. Tell us your marketing challenges.
- 20 Questions Every Marketer Should Be Prepared to Answer During a Marketing Budget Review - 10th January 2019
- How to Improve Marketing Performance in 2019 - 27th November 2018
- Why Buyer Personas are important - 14th November 2018
- 4 Reasons to Review your Marketing Segmentation - 7th September 2018
- 6 Lawful bases for processing data under GDPR - 9th April 2018
- 10 Steps for GDPR Compliance for Marketing - 19th March 2018
- How to determine a marketing budget - 22nd February 2018
- Four Opt in types for email marketing lists - 7th February 2018
- Countdown to GDPR - 11th October 2017
- 5 reasons why marketers need to get out from behind their desks - 20th June 2017