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Segmentation Mistakes That Are Costing You Customers

November 29, 2017
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For most business marketers, segmenting their customers is a no brainer.  It’s common knowledge that segmented campaigns perform better than non-segmented campaigns, improving everything from click-through rates to abuse reports and unsubscribes.

Additionally, customers have come to expect targeted emails from retailers.  According to According to an Accenture study, 74 percent of customers now expect content to be personalized to them.

To put things more simply, you can’t afford to send irrelevant content to your customers.  Just one irrelevant email can result in an unsubscribe or a lost customer for good.

Not sure if your targeting is on point?  Here are a few segmentation mistakes that could cost you customers and sales:

First, What is Segmentation?

For those who aren’t aware of what we mean by segmentation, it simply refers to grouping your customers based on data. 

For example, we could segment based on demographic data and target women in their mid-40s.  Or, we might segment based on a customer’s purchase history and send special promotions to customers based on their most recent purchases.

While it may sound simple, these are just your basic segmentation techniques.  In practice, digital marketers can create complex segments that target extremely specific groups.

In the next section, we’ll take a closer look at some common segmentation mistakes that marketers make and how you can fix them to boost customer loyalty and revenue.

Mistake #1:  Segmenting Without Developing a Strategy

Just because you can create certain segments doesn’t necessarily mean that you should.  While discovering new segments to target can be exciting, they may not always be worth your time or money.

Before you get started with customer segmentation, it’s crucial that you consider your business goals first.  Is your goal to increase email signups?  Re-engage existing customers?  Boost average order value?

Once you have a clear goal in mind, the next step is to identify which segments will help you reach this goal.  Then, pay close attention to how your audience responds and adjust your campaigns as needed.

Mistake #2:  Using Bad Data

Your database may be large, but is it accurate?  The moment you acquire customer data, it begins to decay, and acting upon this outdated data could hurt your marketing performance.

Let’s say that you build a segment consisting of men living in San Francisco, making $80k - $100K.  What if 20 percent of customers in this segment moved locations or received a promotion since you last acquired this data?  That’s 20 percent of your marketing efforts wasted.

Acting on bad data is not just a waste of your marketing efforts, but it can also lower email open rates and hurt your deliverability.  Customers who receive irrelevant messages are more likely to mark your content as SPAM, which sends a clear message to ISP providers.

To ensure that you’re getting the most out of your segments, you need to regularly clean your database and update inaccurate information.  Here are a few ways to keep your data squeaky clean:

  • Identify and delete duplicate contacts.
  • Rather than let customers fill in the blanks, use drop-down menus on form fills.
  • Give customers the chance to update their information before they opt out of your email newsletter.
  • Delete, blacklist, or suspend junk email addresses.
  • Send surveys to customers with an incentive in exchange for updated information.

Mistake #3: Neglecting Attitudinal Data

Segmenting by demographics and geographical data is a good start for small business owners. 

However, it isn’t enough if you want to meet your customers’ needs and remain competitive.  If you truly want to get the right people reading your content and buying your products, then you must leverage attitudinal data as well. 

As we explain more deeply in a previous blog post, attitudinal targeting adds onto segmentation types such as demographics and geographical data, allowing marketers to target consumers by their attitudes and behaviors as well. 

For example, rather than targeting 30-something women living in Charleston, SC, we could zero-in on this segment and target those who are also interested in healthy eating and fitness.  If we were a health food company based in the Charleston, SC area, this would help keep ad spend low and our ROI high.

Don’t be scared to take advantage of advanced targeting capabilities!  With the right marketing tools and strategies, you can use robust targeting to drive enormous growth for your business.

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Mistake #4: Failing to Understand the Buying Cycle

Today, audiences are hanging out across multiple channels and devices.  To maximize the impact of your message and provide them with an exceptional digital experience, it’s important that you reach them at the right time and place.

Most business owners realize the importance of segmenting their email list, but it’s time to go beyond that.  Some of your customers may want to be reached through email, but what about those who prefer to be reached through social media?

Find your target audience on Facebook and use their platform’s sophisticated targeting capabilities to your advantage.  With their Lookalike Audiences feature, you can find new leads who resemble your current customers, making them more likely to convert.

Why limit your segmentation strategies to one platform?  By segmenting on Facebook, you can leverage the massive amount of data they have and use it to convert more customers!

Mistake #5:  Prioritizing New Leads Over Existing Customers

To boost sales, marketers often focus on attracting as many new customers to their store as they can.  In the process, they completely forget to grab the low-hanging fruit—their existing customers!

Your existing customers are much more profitable than new customers, making them an easy segment to target.  With the right segmentation strategies, you can delight your customers with targeted product offers and messages designed to drive more revenue to your store.  Sounds like a win-win, right?

But how should you segment your existing customers?  Oh, let us count the ways:

  • Segment your customers by purchase frequency and send your most loyal customers (AKA, frequent purchasers) special offers to reward them for their loyalty.
  • Which customers purchased from you last holiday season? Find them and send them holiday offers to re-engage them once more.
  • Identify new customers and send them special welcome emails and offers to build your relationship with them.
  • Segment by purchase history and send existing customers products based on recent purchases.

As you can see, there are plenty of ways to segment your existing customers and make an easy sale.  With a marketing automation platform, it’s super easy to take advantage of your most lucrative customer segments and make smarter use of your marketing budget.

Conclusion

Each one of your customers has unique behaviors and traits.  It simply doesn’t make sense to send them all the same content!

Don’t wait to start fixing any mistakes you might be making with your customer segments.  Your audience needs to know that you understand them better than anyone else and that you can meet their high demands.

One last tip—if you find yourself struggling to segment your audiences, consider building customer personas and journey maps.  Both are extremely helpful for identifying who your customers are and which types of content are likely to influence them along their path to purchase!

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