How to use customer segmentation for effective online marketing

Use Customer Segmentation For Online Marketing

Properly and precisely targeting potential customers is one of the key components of online marketing. By customising your offer for the right people and show it at the right time with the right messaging can dramatically improve the results of your marketing campaigns. However, all of that is only possible when you truly understand who your customers are and what they want. Second, only understanding your customers won’t be enough — because not all prospects will share the same traits and set of preferences. You will also have to segment those different types of customer accordingly.


Once segmented, you can customise the offer and target them more precisely. Here are a few ways on how you can segment your customer database for more effective and online marketing campaigns.


1. Persona-specific campaigns
As we just mentioned, you will find that a lot of your customers will be different. They will have different requirements, needs, preferences, and will respond to different pricing, messaging, and USPs. By segmenting customers by different personas, you will be able to create customised marketing campaigns. This will also allow you to exclude customers who are not right for a particular ad campaign. For example, for a estate agent business, customers who recently purchased a house are less likely to be interested in a “buy-a-home” campaign. They may however be interested in renovating and/or renting out the house.


2. Minimising marketing costs
Segmentation also means reducing marketing expenses. For instance, as we just discussed in the previous example, by creating targeted and more narrow campaigns, an owner of an estate agents can exclude people who are less likely to respond to a particular ad. The important lesson to remember here is that customer segmentation is not just about finding new customers. It is also about omitting people who are less likely to convert and, therefore, saving money that you can use later.


3. Up-selling
Up-selling is an extremely important concept to learn for any business person. Sometimes, your first purchase to a customer may not cover the cost of acquiring that customer. You only become profitable by up-selling. If you successfully segment your recent customers from potential customers, you can target them with personalised up-selling campaigns. It is also a good idea to segment customers by their level of income. Even if you don’t have exact information, you can make an educated guess by identifying the type of devices they use, e.g., people who are using the latest iPhone models are likely to be more wealthy than others. Up-selling to people who have the means to buy more can help increase your overall revenue as well as the customer’s lifetime value.


4. Re-marketing campaigns
Re-marketing is an online marketer’s greatest weapon. With a well-targeted re-marketing effort, you can not only recover the sunk cost of your marketing campaigns, but you can also convert people into customers that you may have missed in the first attempt. The online world is full of ads and different brands. Everyone is trying to sell something. In so much noise, it is hard for consumers to decide instantly whether or not they want to buy something. That is why re-marketing plays such an important role. With re-marketing, you target the same people again with more attractive offers and laser-targeted campaigns. However, re-marketing is only possible with user segmentation. For instance, you can try to re-market to people who:


  • Landed on your website
  • Visited the landing page of a particular product
  • Added the product to their carts but then abandoned it


The key here is to craft the right message for each group of people. For example, people who added your product to their carts and later abandoned it are definitely interested in what you have to offer. Perhaps they changed their mind after seeing the final delivery cost, i.e., higher shipping costs. You can remarket them with an ad that offers additional discounts or free shipping.


5. Segmentation by traffic source
Once you acquire a reasonable amount of data, you will see that traffic coming from a certain source is spending more money than others. The key here is to identify that source — segment your user base — and put more resources into it. If visitors coming from a certain website are spending more money, you need to think of ways for increasing the number of total visitors coming from that website.


Segmentation is integral to online marketing success. Moreover, you can be very creative with it. It all depends on how much time and efforts you sink into it. In the end, the results are almost always great.