Customer Segmentation in the Digital Age
- May 14, 2019
- Posted by: Caroline Akinyi
- Categories: Segmentation, Strategies
Customer Segmentation refers to the process or practice of dividing customers into groups based on common characteristics such as age, gender, interests and spending habits, in order to enable companies to market to each group effectively and appropriately.
Segmentation allows businesses to better tailor their marketing to various audience groups. This means that they will be able to select the best communication channel for each segment which could be email, social media posts, Google Ads, or another approach, depending on the segment. Identifying the most appropriate channel for each segment will in turn help businesses establish better customer relationships, improve customer service and focus on the most profitable customers.
For a long time, traditional marketing which can also be referred to as classic marketing has used the four segmentation techniques namely:
- Demographic segmentation: This technique groups your potential market from a people’s perspective that is in terms of age, gender, sexual orientation, and income
- Geographic segmentation: This is when your potential market is defined by where they are located. It could be based on their country or city.
- Psychographic segmentation: This uses the potential customers personality traits, values, attitudes, interests and lifestyles
- Behavioural segmentation: this defines potential customers based on their purchasing habits, usage habits and spending habits which refers to how they spend their time, money and other resources, just to mention a few.
Enter the digital era where advancement in technology and access to the internet has almost completely changed this traditional model of marketing. In addition, technological innovation continues to evolve the customers’ needs and preferences. Today, the customer has a voice and the tools to access online platforms. This has made segmentation more difficult as a result of the customers’ ability to “block” all advertising and keep from being interrupted. As a result, businesses have been forced to modernize the way they target digital consumers, in order to maximize value in each segment.
Customer segmentation in the digital age can go further than ever before. Businesses can no longer use a one-size-fits-all approach to customer acquisition without taking into consideration the priorities, needs and wants of the individual customer. This is because no two customers are exactly the same and marketers can no longer make general assumptions about what makes buyers buy. Effective online customer segmentation can therefore help you stay relevant and valuable to your audience and put you ahead of your competition
Today, upcoming tech or digital marketing companies such as My Biz Marketer are developing tools, platforms and strategies that are enabling businesses to touch each potential customer in a personalized way based on a unique set of preferences that they have observed.
In order to execute a successful digital marketing campaign to the customer segment online, businesses must position themselves in the market and differentiate from other competitors. After the company has chosen a desired position and targeted campaign, it can take the steps necessary to deliver and communicate that position to target customers. The marketer must then determine which of the segments offer the best opportunities for the particular campaign.
As digital capabilities and online experiences continue to grow, customers have come to expect a seamless and consistent brand- to- consumer experience and in order to be able to provide this experience, business need competitive digital marketing strategies that necessitates analysing the next step a consumer may take.
An understanding of your customers allows you to avoid pitching irrelevant marketing content, and to target your consumers at the right time in the buying cycle.
With greater insights into customers behaviours through digital segmentation, marketers have the ability to create accurate forecasts and predictive modelling for their campaigns. The result is highly targeted and relevant campaigns, leading to higher conversions and greater customer satisfaction for your brand.